The Essentials
RAK ICC Foundations are independent legal entities under the Ras Al Khaimah International Corporate Centre, designed to provide asset protection, succession planning, and long-term wealth management. With clear governance, perpetual existence, and robust legal safeguards, Foundations in RAK ICC allow founders to separate personal assets, define beneficiaries, and even pursue philanthropic goals, making them a powerful tool for preserving and growing wealth across generations in the UAE.
Wealth is more than what you hold today – it’s the legacy you leave tomorrow. RAK ICC Foundations, established under the Ras Al Khaimah International Corporate Centre, offer a smart, secure, and flexible way to protect assets, plan succession, and support causes that matter. By functioning as independent legal entities with clear governance and perpetual existence, these Foundations give founders the power to preserve their legacy, safeguard their family’s future, and make a lasting impact in the UAE.
What is a RAK ICC Foundation?
A RAK ICC Foundation is a civil law-based, self-owning legal entity distinct from the founder’s personal estate. Unlike traditional trusts in common law jurisdictions, Foundations are independent legal persons with no shareholders or ownership rights. The assets contributed to a Foundation belong solely to it, providing a clear segregation of wealth between the founder and the Foundation.
Functionally, Foundations in RAK ICC is similar to a corporation in terms of governance and legal recognition but offers unique flexibility for asset protection, succession planning, and philanthropic activities.
Governance Structure of Foundations in RAK ICC
The governance of a RAK ICC Foundation is structured to ensure compliance with the founder’s objectives while enabling independent management:
- Founder: The creator of the Foundation, either an individual or corporate entity, who contributes assets and defines the Foundation’s purpose.
- Council: The operational body responsible for day-to-day management, requiring at least two members.
- Guardian (optional): Provides oversight to ensure the Council operates in alignment with the founder’s intentions. The Guardian cannot be a Council member and may be the founder or an independent appointee.
- Qualified Recipients: Beneficiaries entitled to receive benefits or distributions from the Foundation.
- Designee: In scenarios without beneficiaries, the Foundation’s assets revert to a designated party or authority as specified in the Charter.
Key Purposes and Benefits of Foundations in RAK ICC
1. Asset Protection
Foundations in RAK ICC are particularly effective in shielding assets from forced inheritance laws, creditor claims, and other external risks. By placing assets within the Foundation, founders create a legal barrier protecting family wealth, business holdings, or philanthropic funds.
2. Succession and Estate Planning
Founders can define the distribution of assets across generations through the Foundation’s Charter and by-laws, significantly reducing potential disputes among heirs. This makes Foundations ideal for families or corporate entities seeking long-term wealth continuity.
3. Perpetual Asset Management
Unlike some trusts, which have a limited duration, Foundations in RAK ICC have an unlimited lifespan, allowing assets to be managed and preserved indefinitely. This feature is especially beneficial for multi-generational planning.
4. Philanthropic Activities
Foundations can be structured for charitable purposes, enabling founders to support causes of personal or societal significance while maintaining governance, accountability, and transparency.
Legal and Accounting Requirements
Foundations in RAK ICC are subject to a clear but flexible regulatory framework:
- Governance Documents: Foundations operate under a Charter, defining legal identity, and By-laws, outlining operational rules.
- Accounting: Proper accounting records must be maintained. While annual audits are not mandatory, they are recommended for transparency and compliance.
- Legal Framework: Founders can choose the applicable law and dispute resolution mechanism, including courts in DIFC or ADGM, depending on preference.
- Privacy: RAK ICC maintains confidentiality by restricting access to detailed records, ensuring privacy for founders and beneficiaries.
Foundations in RAK ICC: Recent Enhancements and Protections (2025 Amendments)
The 2025 regulatory updates have strengthened the legal certainty and protection of RAK ICC Foundations:
- Firewall Provisions: Safeguard Foundations from conflicting foreign judgments.
- Three-Year Statute of Limitations: Limits challenges to Foundation establishment or asset transfers to three years, enhancing predictability.
- Cause of Action and Duress Protections: Assets transferred under coercion or creditor fraud are only affected to the extent necessary to resolve claims.
- Enhanced Arbitration Framework: Disputes can now be resolved through arbitration with powers comparable to courts, ensuring confidentiality and enforceability.
- Clarifications on Private Trustee Foundations: Defines responsibilities for assets held in trust by Foundations, providing regulatory clarity.
Registration and Setup Process
- Application Submission: Includes the Foundation application signed by founders, Charter, By-laws, and Guardian’s consent if applicable.
- Documentation: Certified ID, proof of residence, Ultimate Beneficial Owner (UBO), and Source of Wealth declarations.
- Approval: Typically granted within three business days.
- Post-Registration Compliance: Open bank accounts, maintain records in line with anti-money laundering regulations, and submit annual returns.
How MS Can Assist with RAK ICC Foundation Setup?
MS provides comprehensive advisory and implementation services for RAK ICC Foundations, helping you structure Foundation to meet asset protection, succession, and philanthropic goals. We manage the entire setup process, including drafting the Charter and By-laws, facilitating Council and Guardian appointments, handling all registration formalities with RAK ICC, and ensuring ongoing compliance. With our guidance, you can establish a robust, secure, and well-governed Foundation tailored to their long-term objectives.