| Case | Facts |
|---|---|
| Client | Private owner |
| Assets | 15 properties across several Emirates |
| Structure | RAK ICC Family Foundation |
| Tax status | Fiscally transparent, granted by the FTA on application |
| Year | 2026 |
What is a UAE Family Foundation?
A foundation combines features of a company and a trust. Like a company, it is a legal entity that holds assets in its own name and does not expire. Like a trust, it has a founder, beneficiaries, council members and a guardian — and it executes the founder’s succession rules. Foundations register in RAK ICC, DIFC and ADGM; RAK ICC delivers the same instrument at the lowest cost of the three.
What does the founder’s confidentiality mean in practice?
The founder’s identity does not appear in the constitutive documents. He holds control through the foundation’s internal rules, not through a public register entry.
Why does the tax status matter?
Hold the same properties through a regular company, and rental income falls under 9% corporate tax — and in some cases VAT on top. A Family Foundation can apply to the FTA to be treated as fiscally transparent: taxed as if the assets were held by the individuals, not by an entity. The FTA grants the status when the foundation holds one family’s assets and serves only that family’s interests. In this case it was granted, and the client lets the properties without corporate tax on the rental income.
What else can go into a foundation?
Beyond property: companies, foreign-registered assets such as yachts, and other holdings at the founder’s discretion. Succession conditions are set by the founder — who receives what, when, and under which conditions — and they execute under the law of the registering jurisdiction.
When is a foundation the wrong tool?
For operating business — a foundation holds and transfers, it does not trade. And fiscal transparency is conditional, not automatic: assets or beneficiaries outside one family break the qualifying conditions, and the FTA’s decision follows an application, not the registration itself.
Reviewed by
Faisal Sikander
Head of Accounting & Tax
Head of Accounting & Tax at Emirabiz. ACCA-qualified, 12+ years in accounting practice — bookkeeping, VAT and UAE corporate tax filings for client companies. Affiliate member of the Emirates Association for Accountants & Auditors (No. 5022).
Written by Andrey Ovchinnikov ·Published August 25, 2026 ·Last updated August 25, 2026