UAE Trends and Developments Contributed by: Ildar Yuvakaev, Ruslan Akhmetov, Svetlana Koronova and Sofia Simonova, Consigliere Group
Introduction Over the past five years, many high-net-worth indi - viduals have shifted their centre of life interests from the traditionally preferred United Kingdom and Euro - pean Union jurisdictions to the United Arab Emirates. Private-wealth planning is increasingly structured through vehicles established in the Dubai Interna - tional Financial Centre (DIFC), Abu Dhabi Global Mar - ket (ADGM), Ras Al Khaimah International Corporate Centre (RAK ICC) and other free zones in the UAE. These jurisdictions offer statutory regimes for trusts, foundations and holding vehicles, drawing on civil law concepts and common law techniques, consolidating family assets within a single framework while simpli - fying succession planning – particularly when paired with wills registered in the DIFC, Abu Dhabi Judicial Department (ADJD) or ADGM to manage exposure to foreign succession rules. At the same time, how families use these structures is shifting beyond tax efficiency towards full invest - ment and family wealth management. Foundation and trust constitutions increasingly centre on family policies, investment strategy and decision-making protocols, with councils, boards and guardians act - ing as the main forum for long-term investment over - sight rather than a technical formality. Many vehicles now function as genuine investment platforms, with professional portfolio managers handling allocation decisions within parameters the family sets. This is giving rise to UAE-based institutions that behave like permanent family structures – durable architecture for managing capital and succession over time – rather than simple wrappers for asset protection. Private (Family) Foundations One of the strongest drivers behind the transfer and placement of family wealth into UAE structures is the explicit recognition of family wealth vehicles in the UAE Corporate Tax Law, Federal Decree Law No 47 of 2022. Article 17 allows qualifying “Family Foundations” to elect treatment as unincorporated partnerships, so that income is taxed at beneficiary level rather than at the foundation itself, turning the foundation into a fiscally transparent vehicle instead of a taxable entity. Where the statutory conditions on purpose, activities and ownership are met, founda - tions and their wholly owned entities can hold shares
in operating companies, UAE and foreign real estate, and global investment portfolios in a tax-efficient man - ner, underpinned by increasingly detailed Federal Tax Authority guidance on family foundation taxation and multi-tier structures. At the same time, foundations established in the DIFC (DIFC Foundations Law No 3 of 2018), ADGM (ADGM Foundations Regulations 2017) and RAK ICC (RAK ICC Foundations Regulations 2019) are emerging as the region’s preferred private wealth wrappers. Each regime provides local legal personality and dedicated foundation rules, including firewall provisions that pro - tect the structure and its assets against claims based on foreign heirship or matrimonial law; in this con - text, the ADGM goes further by expressly disregarding incompatible foreign heirship rights and related judg - ments, subject to its own public policy limits. In prac - tice, this means that foreign succession claims may not displace the foundation’s internal rules, although local public policy and enforcement issues can still limit the effect of those protections in specific cases. Trusts In parallel, the DIFC and ADGM have built sophisti - cated trust regimes for private wealth and succession planning, while the RAK ICC has opted to deliver trust like functionality through its foundation framework. The key difference is that a trust is a fiduciary rela - tionship in which trustees hold and manage assets for beneficiaries, whereas a foundation is a separate legal person that owns the assets itself and is governed by its charter and council. DIFC Trust Law No 4 of 2018 modernised the earlier 2005 statute by codifying trus - tee duties of loyalty, prudence and proper purpose, within a broader regime in which many institutional trustees are regulated by the Dubai Financial Services Authority (DFSA). ADGM’s Trusts (Special Provisions) Regulations 2016 provide similarly detailed rules for express trusts used in family wealth and estate plan - ning structures and emphasise that foreign forced heirship rules do not affect the validity of an ADGM trust or dispositions to it, subject only to ADGM public policy limits. Both centres therefore offer common law style trusts that are generally treated as fiscally trans - parent under the UAE Corporate Tax Law, with income attributed to settlors or beneficiaries in line with Article
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