Introduction

RAK International Corporate Centre (RAK ICC) Foundations offer a robust and versatile legal structure designed to manage and protect assets efficiently. As a corporate body with a distinct legal personality separate from its founder(s), the RAK ICC Foundation operates through its council to administer its assets and achieve its objectives. These foundations provide enhanced succession planning and asset protection, along with a strong governance structure and the benefits of perpetual existence. This article delves into the uses, structure, and advantages of RAK ICC Foundations.

This blog is related to our UAE Business Setup Guide:Freezone and Mainland

Uses of RAK ICC Foundations

Enhanced Succession Planning and Asset Protection

 RAK ICC Foundations provide a clear and legally sound framework for succession planning, ensuring that assets are protected and managed according to the founder’s wishes beyond their lifetime.

Robust Governance Structure

The governance structure of RAK ICC Foundations includes a council that oversees the administration of assets, ensuring they are managed effectively and following the foundation’s objectives.

Guardian Oversight

A guardian may be appointed to supervise the council and ensure compliance with the foundation’s charter and by-laws, adding an extra layer of oversight and accountability.

Distinct Legal Personality

The foundation’s separate legal personality allows for the separation of liability while maintaining control over assets, similar to a company structure.

Perpetual Existence

RAK ICC Foundations are designed to continue in perpetuity, providing long-term stability and certainty for asset management and succession planning.

Holding and Managing Assets

The foundation can hold various assets, including shares in RAK ICC companies and operating companies, and manage these assets for the benefit of the qualified recipients.

Family Philanthropic Purposes

Foundations can be used for family philanthropic endeavours, allowing for the structured and effective administration of charitable activities.

Overview of RAK ICC Foundations

Governing Law

RAK ICC Foundations are regulated under the RAK ICC Foundations Regulations 2019.

Governing Jurisdiction

Founders have the choice of common law jurisdictions between the Courts of the Abu Dhabi Global Market (ADGM) or the Courts of the Dubai International Financial Centre (DIFC).

Language

 English is the official language of RAK ICC Foundations.

Incorporation Process

• • • Founder: Can be an individual or a corporate body.
    • Council Members: Must include a minimum of two members who can be individuals or corporate bodies.
    • Registered Agent: A UAE-registered office is required.
    • Guardian: Required for foundations with charitable or specified non-charitable objects.
    • Application Form: Signed by the founder and submitted to the Registrar along with the foundation’s Charter and By-Laws.

Minimum Capital

 The minimum capital requirement is USD 100 (or its equivalent in any other currency). Additional property can be contributed to the foundation by a contributor.

Control Mechanisms

The foundation is governed by its council members according to its by-laws, which is a private document. The council must include at least two members, and a guardian (if appointed) ensures compliance with the by-laws.

Right to Information

The Registrar maintains a Foundations Register with basic details of each foundation. All other information remains private unless disclosure is required by relevant authorities.

Migration

 Foundations can migrate into or from the RAK ICC subject to certain conditions.

Annual Accounts

 The registered agent must maintain accounting records at the registered office. These records are not subject to public disclosure.

Possible RAK ICC Foundation Structure

A typical RAK ICC Foundation structure includes various roles and assets, ensuring comprehensive management and control:

Guardian

 Ensures the foundation operates according to its charter and by-laws, providing oversight to the council members.

Council Members

 Administer the foundation’s assets and carry out its objectives. Council members can include the founder, family members, trusted advisors, or professional advisers.

Foundation

 Acts as the central entity holding various assets and managing them according to the founder’s objectives.

Assets Held by the Foundation

• • • Real Estate
    • Bank Accounts and Other Financial Assets
    • Account Portfolios
    • Personal Chattels
    • Investment Bonds
    • RAK ICC Company Shares
    • Operating Companies

Founder

The individual or entity that establishes the foundation and sets its objectives and governance structure.

Qualified Recipients

 Beneficiaries designated by the founder to receive benefits from the foundation’s assets.

Advantages of RAK ICC Foundations

Internationally Compliant Registry

RAK ICC Foundations are part of an internationally recognized and compliant registry, ensuring adherence to global standards.

Robust Governance Structure

The governance framework ensures effective oversight and management of foundation assets.

Attractive Tax Regime

The UAE offers a favourable tax environment, enhancing the appeal of RAK ICC Foundations.

No Requirement to File or Audit Accounts

While foundations must comply with RAK ICC AML requirements, there is no obligation to publicly file or audit accounts.

Migration Flexibility

Foundations can relocate to or from the RAK ICC, providing flexibility in their administration.

Low Registration and Administrative Costs

Setting up and maintaining an RAK ICC Foundation is cost-effective, making it accessible to a wide range of founders.

Governance and Perpetual Existence

The perpetual nature of RAK ICC Foundations ensures long-term stability and governance.

Flexibility with Beneficiary Classes

RAK ICC Foundations offer flexibility in defining and managing beneficiary classes, accommodating diverse needs and objectives.

Conclusion

RAK ICC Foundations presents a highly advantageous and flexible structure for asset management, succession planning, and philanthropic activities. With their robust governance framework, distinct legal personality, and favourable regulatory environment, these foundations are well-suited to meet the needs of high-net-worth individuals, families, and corporate entities. The ability to migrate, low setup costs, and perpetual existence further enhance the attractiveness of RAK ICC Foundations as a premier choice for sophisticated financial planning and asset protection.

The possible structure of a RAK ICC Foundation, involving a guardian, council members, and a range of assets, ensures comprehensive management and control, tailored to the founder’s objectives. By leveraging the benefits and robust features of RAK ICC Foundations, founders can achieve effective and secure asset management, ensuring their legacy and philanthropic goals are met with precision and care.