In the first part of our series about the UAE Family Foundations, we explored some of its benefits, namely the asset protection, preservation of family wealth and succession planning. Today, we continue by looking at its other benefits of governance and control, and privacy. In the third, final part of this series, we will conclude by examining its tax efficiency which makes from the UAE one of the most tax-efficient frameworks in the world for passive family wealth structures.
As mentioned, the family foundation is a specialized legal vehicle entity for holding family wealth.
Governance and Control
Unlike trusts, where the settlor must generally give up control, a foundation allows the founder to retain an influence, e.g. as a foundation council member or through the reserved powers. This balance between control and independence is one of the reasons why foundations have become the preferred asset protection vehicle for wealthy families.
Tax Efficiency and Privacy
UAE Family Foundations offer significant tax efficiency and privacy. Under current UAE tax laws, “Qualifying Family Foundations” can be treated as tax-transparent, meaning they may pay 0% corporate tax on passive income from investments and real estate. Income flows through to beneficiaries to pay tax, and for the UAE tax resident natural persons, such passive income, including dividends, capital gains, interest, and real estate income, remain exempt from taxation at the individual level.
Beyond taxes, the internal details of a foundation, such as the names of the beneficiaries, are kept strictly confidential and are not part of the public record. This allows families to manage their global affairs with a level of discretion that a standard commercial company cannot provide.
Interested in setting up your Family Foundation and don’t know where to start? You are at the right place; our team of experienced experts will provide you with a truly personal service to suit your specific needs. Call us at +971 521 521 330 or email us at office@alphaprimedwc.ae. We look forward to helping you to protect and preserve your wealth for the next generations.
