ADGM Foundations and Trusts Formation

ADGM Foundations

Individuals and entities interested in a trust and foundation setup in UAE prefer ADGM due to the following reasons:

Favorable tax environment
High levels of confidentiality
Advanced infrastructure
A flexible legal framework

Want to plan your wealth distribution and asset protection in UAE? Consider Abu Dhabi Global Market (ADGM) because it provides a flexible and business-friendly environment for these activities. So, you must consider ADGM foundation and trust formation to extract most benefits of the location.

With such a pro-business location and world-class facilities, who would not want ADGM as the jurisdiction for setting up their trust or foundation?

ADGM has separate laws governing trusts and foundations:

A Trust Law
A Foundations Regime

These regulations govern their establishment, operation, and management in ADGM. Besides the governing law, independent consulting firm like FAME can help you with ADGM foundation and trust setup.

Worried about the distribution of your assets, wealth, and family business?

Connect with FAME for expertise on ADGM foundation and trust setup.

Perks of ADGM Foundation and Trust Formation

ADGM foundation and trust formation can give you several benefits. These benefits include the following:

Economy

ADGM is one of the biggest international financial centres in the world. You can find a range of businesses in different industry sectors in this free zone. Also, it gives you access to a vibrant community of skilled and experienced professionals. It follows the English common law for legal proceedings and has an advanced regulatory framework. Its world-class business environment, innovation-led culture, and economic diversification attract many investors and entrepreneurs.

Common Points

Besides the ecosystem, many positive points exist to enable trust and foundation setup per their respective laws.

100% foreign ownership is possible in trusts and foundations in ADGM. The founder/trustee and other officers can be citizens and residents of any country.
There are no income, corporate, or capital gains taxes on trusts and foundations in ADGM. Thus, you can enjoy tax benefits and reduce operational and compliance costs.
You can also enjoy benefits of several double taxation treaties of UAE with other countries.
There is no register of trusts on ADGM. Public disclosure of the founder, beneficiaries, and the Council is not essential. Thus, no records on trusts or foundations exist, giving you confidentiality and privacy.
Trusts and foundations can repatriate their capital and profits.
You do not need a physical office as your registered address. A virtual office is enough to manage the operations. For address purposes, you can use the office address of your corporate service provider.
You need not be physically present in UAE for the trust or foundation establishment. Remote, digital registration is possible, adding to the ease.
Migration of your ADGM trust and foundation is possible. You can re-domicile them in and out of the free zone.
Negligible annual reporting requirements exist for ADGM trusts and foundations. You do not need to file annual accounts, returns, or audits.

Foundations

Besides these common benefits of trusts and foundations in ADGM, some unique points exist for ADGM foundations. These include the following:

ADGM foundation has an independent legal personality. So, your assets and beneficiaries’ entitlements are safe from forced heirship rules, bankruptcy claims, or divorce-related personal claims.
You have the flexibility to make changes in the governance structure of your ADGM foundation.
The initial commitment of US$ 100 in assets is compulsory to start a foundation. Thus, starting a foundation in ADGM is low-cost.
Individuals and body corporates can both take up any role in a foundation.
If you are a foundation for a specific purpose, you do not need to appoint a beneficiary.
The assets of an ADGM foundation can be within the UAE or in any country. These can be of any form – investments in listed stocks, real estate, shares in companies, bonds and commodities, and alternative assets.

Prerequisites to Fulfil Before a Trust or Foundation Setup in ADGM

To access these benefits in ADGM, you need to have specific features. The following are the prerequisites to fulfil before establishing a trust or a foundation in ADGM:

Trusts

You can create a charitable trust or a non-charitable trust in ADGM. The latter must be lawful and align with the public policy in ADGM.
The trustee and enforcer in a trust (created for non-charitable purposes) cannot be the same person.
The enforcer must not derive benefits from the trust directly, through another person, or through a transaction relating to trust property.
You must report the names of all the officers of your trust to the Registrar. There is no public disclosure of the same.

Foundations

You must have:
– One founder
– At least two council members
– Any number of beneficiaries
You have the option to appoint a guardian during the lifetime of the founder. On the founder’s death, the guardian appointment is mandatory.
You must appoint a company service provider to handle your registration and secretarial activities. They will represent you for any communication with the ADGM Registration Authority.
The name of a foundation in ADGM must end with the word ‘foundation’. Otherwise, the general naming rules apply.
One of the signatories of the foundation must be a resident of UAE.
You must disclose the details of your founder and other officers to the Registrar. But the details are not available for public disclosure.
The founder can be the sole beneficiary, but only during their lifetime.

The Procedure of ADGM Foundation and Trust Formation

The processes of setting up a trust and foundation are different since the structures vary.

Trusts

The procedure of ADGM trust formation includes the following steps:

Step 1: Decide the structure and goals

The first step of trust setup in ADGM is defining the goals behind establishing a trust. It can be due to charity, estate planning, or asset protection purposes. Whatever your objectives of a trust are, it helps you select an appropriate structure.

Step 2: Manage the trust structuring

Now is the time to create the trust deed. You must mention the terms of the trust like the following details:

Participants in the trust
Functions and responsibilities of all participants
Involved assets
Beneficiaries’ rights
Trustees’ powers
Existence and termination conditions of the trust

It is also the right time to select your ADGM trust’s trustees. You can appoint individuals or entities as trustees. You must identify the beneficiaries also. Moreover, transfer the relevant assets like shares, property, bank accounts, or others to your trust.

Step 3: Register, manage, and administer the trust

In the third step of ADGM trust formation, you must register it with the ADGM authority. After registration, you can administer and manage its operations per the law.

Foundations

The procedure of ADGM foundation formation includes the following steps:

Step 1: Decide the purpose

In the first step of foundation formation in ADGM, decide the purpose of your foundation. Besides the reason, you must also think about the name of your foundation. You must appoint council members, guardians, and beneficiaries for your foundation.

Step 2: Complete the application form

The second step of ADGM foundation setup involves filling out the application form. You must put in the details of all the officers of the foundation. Also, prepare the following documents:

Foundation charter
ID proof of officers
Evidence of appointment of all officers
Registered office address in ADGM
If there are no beneficiaries, then details of the designee
Declarations related to the founder, guardian, or councillor

Submit all these documents, along with the online application form, to the ADGM authority.

Step 3: Registration

Your registration is complete after the authority approves all your documents and application. You can now proceed with the operations and visa and bank account procedures.

FAME’s Services in ADGM Foundation and Trust Formation

FAME is a leading foundation and trust formation services provider in the UAE and other jurisdictions. One of our primary offerings to clients is support in ADGM foundation and trust setup. These services are extended to other UAE’s free zones like DIFC and RAK ICC, and many other international jurisdictions.

When considering your request to set up a trust or foundation in UAE, we take care of your unique requirements. We help you with documentation, creating agreements, and forming the structure for smooth execution. Be it communication with relevant authorities or addressing potential risks, you’ll never have to worry about them. We also help you select council members, trustees, beneficiaries, nominees, etc.

Need a perfect solution for legacy planning and financial structuring?

FAME’s ADGM foundation and trust formation is your sure-shot option.