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ADGM AML Compliance in 2025: How AI and SupTech Are Transforming Financial Oversight?

ADGM AML Compliance in 2025

The Essentials

The Abu Dhabi Global Market (ADGM) is redefining AML supervision through AI, advanced analytics, and supervisory technology (SupTech), shifting from reactive compliance to a proactive, intelligence-driven model. This transformation extends to virtual assets, staking frameworks, and cybersecurity integration, ensuring innovation is paired with robust oversight. The FSRA’s functional and data-driven approach strengthens ADGM AML compliance, enabling early detection of illicit financial activity, enhancing reporting accuracy, and supporting regulated entities in navigating evolving risks. Firms can leverage expert guidance and MLRO services to maintain operational integrity and align with ADGM’s forward-looking regulatory standards.


As finance becomes increasingly digital and borderless, regulators face the challenge of keeping pace with innovation while safeguarding integrity. The Abu Dhabi Global Market (ADGM) has emerged as a pioneer in this space, transforming ADGM AML compliance through artificial intelligence, advanced analytics, and supervisory technology (SupTech).

By leveraging real-time transaction monitoring, predictive modeling, and machine-learning-based risk assessment, ADGM’s Financial Services Regulatory Authority (FSRA) has shifted from traditional, reactive compliance to a proactive and intelligence-driven regulatory model. This transformation extends beyond conventional finance, encompassing virtual assets, staking frameworks, and cybersecurity integration, ensuring that innovation is matched with robust oversight.

A Digital Transformation in ADGM AML Compliance

ADGM’s adoption of AI-enabled tools, analytics, and supervisory technology (SupTech) has redefined AML supervision. The FSRA employs real-time transaction monitoring, predictive modeling, and machine-learning-based risk scoring, enabling the early identification of illicit financial behavior. These systems reduce false positives, automate compliance reporting, and enhance operational efficiency for institutions operating in the jurisdiction.

By embedding data analytics across regulated entities, ADGM has created an interconnected monitoring network capable of identifying patterns across both traditional and digital financial channels. This approach signals a shift from reactive compliance to proactive detection, aligning with the UAE’s broader agenda of reinforcing its reputation as a clean, innovation-driven financial hub.

Virtual Asset Oversight: A Functional Approach

The FSRA’s Virtual Asset Regulations and accompanying “Guiding Principles” emphasize responsible digital asset innovation while maintaining stringent ADGM AML compliance. A key principle requires firms to avoid any virtual asset transaction where a counterparty’s identity cannot be fully verified, directly addressing anonymity risks inherent in blockchain-based operations.

ADGM’s functional regulatory approach focuses on the economic activity performed, rather than simply the technological form or token classification. This ensures that firms offering novel virtual asset services remain within the regulatory scope, providing visibility over emerging business models and associated AML risks.

The 2025 Virtual Asset Staking Framework

In Consultation Paper No. 10 of 2025, the FSRA introduced a tailored regulatory perimeter for virtual asset staking, clarifying ADGM AML compliance triggers:

  • Regulatory activation: Oversight applies when authorised persons hold or control assets for staking on behalf of clients.
  • Custodial obligations: Custodians must obtain client consent for staking, and discretionary staking requires a Financial Services Permission (FSP) to manage assets.
  • Exemptions: Solo staking, where individuals stake their own assets without intermediation, remains outside regulatory scope.
  • Focus: Activities like liquidity mining or yield farming remain unregulated, narrowing AML oversight to staking within proof-of-stake blockchains.

This functional delineation ensures that AML controls target risk-bearing intermediaries rather than individual users, making compliance proportional to exposure.

ADGM AML Compliance: Integration of SupTech and Cyber Oversight

ADGM’s 2025 Cyber Risk Management Framework integrates AML supervision with cybersecurity resilience, reinforcing ADGM AML compliance across regulated entities.. Regulated entities are required to implement real-time data integrity checks, encrypted KYC processes, and adaptive incident reporting. These measures help defend against crypto-related cyber crimes such as ransomware payments or blockchain bridge exploits that can facilitate money laundering.

SupTech platforms consolidate blockchain transaction data with cross-border intelligence, enabling pattern recognition and jurisdictional collaboration. This harmonized data ecosystem ensures traceability across fiat and virtual asset conduits, a critical capability for detecting layering and obfuscation tactics common in crypto laundering schemes.

Strategic Implications for Regulated Firms

The convergence of technology and virtual asset regulation in ADGM presents both opportunities and compliance responsibilities:

  • Enhanced reporting accuracy: AI-driven AML screening aligns internal risk models with FSRA analytics.
  • Cross-sector collaboration: Firms are encouraged to participate in ADGM’s Financial Crime Prevention program to ensure transparency and intelligence sharing.
  • Future-proofing business models: Early compliance with staking and virtual asset obligations positions firms for leadership in the rapidly evolving digital finance ecosystem.

How MS Can Help in ADGM AML Compliance?

At MS, we help ADGM-regulated entities strengthen their AML frameworks and provide outsourced MLRO solutions to meet evolving supervisory expectations with confidence.

Our team works closely with firms to design and implement robust AML policies, establish risk-based controls, and align compliance systems with ADGM’s AI-driven supervisory standards. Through our MLRO services, we ensure your organisation has experienced leadership in overseeing compliance, managing reporting obligations, and responding efficiently to FSRA assessments.

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Foundation Setup in RAK ICC: Key Amendments in 2025 Strengthening Governance and Asset Protection 

The Essentials 

Foundation setup in RAK ICC provides a secure and flexible framework for wealth preservation and legacy planning. The 2025 amendments enhance governance, asset protection, creditor safeguards, and dispute resolution, reinforcing RAK ICC foundations as a trusted vehicle for long-term family and investor planning. With MS’s end-to-end advisory and implementation services, clients can establish well-structured, compliant, and future-ready foundations that align with their strategic wealth, succession, and philanthropic goals. 

Preserving wealth across generations demands foresight, structure, and legal certainty. Foundations have become an indispensable tool for families and investors aiming to safeguard assets, manage succession, and retain control over long-term wealth strategies. 

The Ras Al Khaimah International Corporate Centre (RAK ICC) offers a sophisticated and secure foundation framework in the UAE. With robust governance standards, comprehensive asset protection measures, and flexible structuring options, RAK ICC foundations empower founders and families to implement strategic legacy and wealth planning while ensuring stability and continuity across generations. 

In July 2025, RAK ICC introduced significant amendments to its Foundations Regulations, effective from 31 July 2025, under the RAK ICC Foundations Regulations 2019, Amendments 2025. 

These reforms further enhance legal certainty, shield assets from external interference, and streamline dispute resolution. By combining strong governance, robust protection, and international enforceability, Foundation setup in RAK ICC remain one of the most secure and flexible vehicles for cross-border wealth planning, setting a new benchmark for legacy and family governance in the UAE. 

Key 2025 Amendments for Foundation Setup in RAK ICC 

The 2025 reforms strengthen the legal, governance, and dispute-resolution framework for foundations, focusing on international enforceability, creditor protection, and arbitration. Key highlights include: 

1. Firewall Provisions 
Foundations are now shielded from enforcement of any foreign judgment or legal action inconsistent with RAK ICC law. This effectively bars recognition of foreign rulings that contradict UAE legal principles or interfere with foundation assets. 

2. Three-Year Statute of Limitations 
A new three-year limitation period applies to any legal action challenging a foundation’s establishment or the transfer of assets into it, enhancing certainty and protecting assets from late-stage claims.  

3. Creditor Claim Restrictions 
Fraudulent transfer claims are only valid where the founder intended to defraud creditors and the transfer rendered the founder insolvent. Any liability is limited to the specific asset involved protecting other foundation holdings from exposure.  

4. Duress Protections  
Actions taken under foreign coercion or legal pressure are invalid. Foundation officers are instructed to disregard non-UAE orders to maintain autonomous decision-making.  

5. Reinforced Arbitration System 
Disputes may now be privately arbitrated with tribunals granted powers equivalent to the RAK or DIFC/ADGM courts. This strengthens confidentiality and simplifies cross-border dispute resolution.  

6. Private Trustee Foundations (PTFs) 
The amendments clearly separate trust assets from foundation property, confirming fiduciary integrity and asset segregation where a foundation holds trust property. 

Foundation Setup in RAK ICC: Strengthening Governance and Asset Protection for Generational Wealth 

The 2025 amendments underscore RAK ICC’s commitment to providing a robust, secure, and internationally aligned foundation regime. By enhancing governance, reinforcing asset protection, and streamlining dispute resolution, these reforms ensure that foundation setup in RAK ICC continues to serve as a trusted vehicle for legacy preservation and strategic wealth planning. For families, founders, and investors seeking long-term certainty and control over their assets, RAK ICC foundations offer a stable, flexible, and future-ready solution in the evolving landscape of UAE wealth management. 

How MS Supports Foundation Setup in RAK ICC? 

MS offers end-to-end advisory and implementation services for Foundation setup in RAK ICC, guiding clients in structuring their foundations to achieve asset protection, succession planning, and philanthropic objectives. We oversee the full setup process, including drafting the Charter and By-laws, coordinating Council and Guardian appointments, completing all registration formalities with RAK ICC, and ensuring ongoing regulatory compliance. With MS’s expertise, you can establish a secure, well-governed, and future-ready foundation aligned with your long-term wealth and legacy goals. appointments, completing all registration formalities with RAK ICC, and ensuring ongoing regulatory compliance.  

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Why Investors Prefer Holding Real Estate Through a DIFC Foundation? Read Here! 

The Essentials 

Dubai’s real estate market continues to emerge as one of the world’s most dynamic and attractive investment destinations, offering strong capital appreciation, reliable returns, and unmatched lifestyle benefits. Holding real estate through a DIFC Foundation provides a structured and flexible solution, combining legal protection, confidentiality, tax efficiency, and streamlined succession planning. This approach enables investors and families to safeguard their property portfolios, optimize asset management, and create a framework for long-term wealth preservation that can extend across multiple generations. 

Dubai’s real estate market is a gateway to global investment opportunities. It’s a global hotspot delivering strong returns, a world-class lifestyle, and unmatched opportunities for growth. While other markets face uncertainty, Dubai stands out as a resilient and attractive destination for investors seeking both capital appreciation and strategic asset management. 

Owning property here is only part of the equation. A DIFC Foundation transforms real estate ownership into a smart, structured approach, combining legal protection, privacy, tax efficiency, and succession planning. For investors and families alike, it’s a way to secure, manage, and grow property assets while building a legacy that lasts for generations. 

Legal Benefits of Holding Real Estate Through a DIFC Foundation 

1. Ownership in Designated Areas 

DIFC Foundations are permitted to own real estate in areas of Dubai designated for foreign ownership by the Ruler of Dubai. This includes popular locations such as Downtown Dubai, Palm Jumeirah, and Dubai Marina.  

2. Asset Protection 

The foundation’s independent legal personality provides a layer of protection against personal liabilities and potential creditors. Assets held within the foundation are distinct from the founder’s personal estate, offering enhanced security.  

3. Succession Planning and Multigenerational Wealth Transfer 

DIFC Foundations facilitate seamless succession planning, ensuring that real estate assets are passed on according to the founder’s wishes. The structure supports multigenerational wealth transfer, preserving family legacy and values.  

4. Privacy and Confidentiality 

Unlike traditional property ownership structures, DIFC Foundations offer confidentiality regarding beneficiaries and asset details. This privacy is particularly beneficial for families and individuals valuing discretion.  

5. Legal Certainty Under Common Law 

Operating within the DIFC’s common law framework provides legal certainty and predictability. The DIFC Courts offer an independent judiciary for resolving disputes, ensuring fair and transparent legal proceedings. 

Tax Considerations for Holding Real Estate Through a DIFC Foundation 

Holding property through a DIFC Foundation allows investors to benefit from the UAE’s favorable tax framework: 

  • No Personal Income Tax: Rental income or capital gains from property ownership are not subject to personal income tax, enhancing the appeal of using a DIFC Foundation for real estate investment. 
  • Corporate Tax Exemptions: Holding real estate through a DIFC Foundation for investment or family wealth purposes may qualify for exemptions from the 9% corporate tax, provided the activities are non-commercial. This can make long-term property ownership more cost-efficient. 
  • No Withholding Tax: Distributions from the foundation, such as rental proceeds or profits from property sales, are generally free from withholding tax, enabling smooth and efficient management of real estate assets. 

How Much It Costs to Secure Dubai Real Estate through a DIFC Foundation? 

Holding real estate through a DIFC Foundation offers investors a secure, cost-efficient, and flexible solution for property ownership in Dubai. Beyond simply owning assets, this structure provides legal protection, streamlined succession planning, and corporate governance, making it ideal for individuals and families looking to manage property portfolios strategically and safeguard their investments across generations. 

  • Registration Fee – $0 (No initial setup cost, making it highly accessible)  
  • Annual Operating License Fee – $350 (Payable upon registration and annually thereafter)  
  • Data Protection Notification – $750  
  • Data Protection Renewal – $250 (Yearly)  
  • Confirmation Statement – $300 (Yearly)  
  • Knowledge and Innovation Fee – $5.45 (A standard regulatory charge applicable to all DIFC entities) 

Given its low setup and ongoing costs, combined with strong legal safeguards and recognized governance, maintaining real estate through a DIFC Foundation is a compelling vehicle for property ownership in Dubai. It not only ensures asset protection and continuity for property investments but also provides a strategic framework for managing, transferring, and growing real estate assets efficiently over the long term. 

Build, Protect, and Grow: MS Guides Your DIFC Foundation Journey 

Establishing a DIFC Foundation demands precision, expertise, and a thorough understanding of regulatory requirements, and that’s where MS excels. As a leading corporate service provider in DIFC, we specialize in DIFC foundation setup, regulatory compliance, and ongoing governance, ensuring your structure is designed for long-term success. 

Leveraging years of experience and deep corporate structuring knowledge, our team streamlines the entire process of securing real estate through a DIFC Foundation. Whether your goal is succession planning, asset protection, or strategic business structuring, MS delivers tailored solutions aligned with your unique objectives. 

Build your legacy with confidence. Partner with MS for a smooth, efficient, and expertly managed DIFC Foundation setup. Connect with our team today! 

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How Businesses Can Prepare for the Rollout of eInvoicing Framework in the UAE in 2026?

How Businesses Can Prepare for the Rollout of eInvoicing Framework in the UAE in 2026?

The Essentials

On 29 September 2025, the UAE Ministry of Finance issued Ministerial Decisions 243 and 244, introducing a comprehensive e-invoicing framework for all commercial transactions, including those involving nonresidents. Exemptions apply to certain government activities, international airline services, goods transport (for 24 months), and VAT-exempt or zero-rated financial services. A pilot program begins on 1 July 2026, with mandatory adoption from 1 January 2027 for businesses with revenues of AED 50 million or more, followed by phased deadlines for smaller businesses and government entities. UAE businesses should take proactive steps to ensure compliance.

With the UAE’s e-invoicing rollout gaining momentum, businesses are shifting their focus from simply knowing “what” and “when” to mastering “how” and “why.” E-invoicing is evolving beyond a regulatory obligation to become a strategic tool driving operational efficiency, enabling smarter, data-driven decisions, and proactively mitigating compliance and financial risks.

On 29 September 2025, the UAE Ministry of Finance issued Ministerial Decisions 243 and 244, establishing the framework for eInvoicing framework in the UAE applicable to all commercial transactions, including those involving nonresidents. With the new decision, certain transactions are excluded, such as sovereign government activities, specific international airline services, goods transport (exempt for 24 months), VAT-exempt or zero-rated financial services, and other transactions designated by the Minister of Finance.

Operational Readiness for eInvoicing Framework in the UAE: Beyond ASP Appointment

While appointing an Accredited Service Provider (ASP) is a legal requirement, true readiness requires a holistic approach. Businesses must align systems, data, and processes to meet the phased rollout schedule:

  • Pilot and Voluntary Adoption: Begins 1 July 2026, allowing businesses to test systems and familiarize themselves with the e-invoicing framework.
  • Phase 1: Mandatory from 1 January 2027 for businesses with annual revenue of AED 50 million or more. ASP appointment must be completed by 31 July 2026.
  • Phase 2: Covers remaining businesses in two waves – mandatory adoption from 1 July 2027 and 1 October 2027. Turnover thresholds consider all revenue streams: B2B, B2G, and B2C.

Operational readiness involves:

  • ERP and Accounting System Upgrades: Ensure compatibility with XML/PINT AE standards for e-invoice generation.
  • Master Data Validation: Confirm accuracy of product, customer, and tax details.
  • Workflow Integration: Embed eInvoicing framework in the UAE in daily processes to prevent bottlenecks or delayed submissions.
  • Monitoring and Controls: Establish ongoing checks to identify errors or exceptions, mitigating penalties and compliance risks.

eInvoicing Framework in the UAE: Strategic Opportunities Beyond Compliance

  • Enhanced Governance and Audit Readiness
    Real-time reporting, structured data, and secure local storage increase transparency and simplify audits for the Federal Tax Authority (FTA).
  • Operational Efficiency
    Automation reduces manual processing, accelerates invoice cycles, and frees finance teams to focus on strategic initiatives.
  • Data Accuracy and Analytics
    E-invoicing creates structured, reliable data that can drive forecasting, cash flow analysis, and pricing strategies.
  • Competitive Differentiation
    Early adopters signal modern, tech-savvy operations, enhancing credibility with regulators, investors, and partners.

Risk Mitigation: Common Pitfalls to Address

Non-compliance to eInvoicing framework in the UAE  carries financial penalties and operational disruption. Strategic planning can mitigate these risks:

  • Late or Incorrect Invoice Issuance: Automated validation ensures invoices are submitted within 14 days of transaction or payment receipt.
  • System Integration Gaps: Conduct end-to-end testing to align ERP, accounting, and ASP systems before mandated dates.
  • Data Inconsistencies: Standardize master data and reconcile ERP and finance systems regularly.
  • Complex B2G/B2B Transactions: Map all transaction flows, including zero-rated and deemed supplies, to ensure coverage.

Turning Compliance into Competitive Advantage

eInvoicing framework in the UAE is a strategic opportunity for forward-looking businesses. Companies that act early and prepare thoroughly can:

  • Streamline operations and reduce manual errors
  • Gain greater accuracy and real-time visibility into transactions
  • Enhance regulatory compliance and governance
  • Leverage structured data for financial insights and business intelligence

How MS Can Help to Comply with eInvoicing Framework in the UAE?

MS supports businesses in transforming UAE e-invoicing compliance into a strategic advantage. We help identify potential risks, implement robust controls, and ensure smooth alignment with the phased rollout schedule. With our multidisciplinary expertise, companies can confidently navigate the UAE’s e-invoicing framework, avoid penalties, and unlock the full strategic potential of this digital transformation.

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DIFC Foundations and Trusts: Which Path Suits Your Wealth Goals in 2025? Find Here! 

DIFC Foundations and Trusts offer distinct approaches to wealth protection and management. Trusts emphasize privacy and simplicity, while Foundations provide greater control, flexible governance, and strategic long-term benefits.

The Essentials 

DIFC Foundations and Trusts offer distinct approaches to wealth protection and management. Trusts emphasize privacy and simplicity, while Foundations provide greater control, flexible governance, and strategic long-term benefits. Both structures support effective estate planning, asset protection, and succession management. 

Every legacy begins with a structure. For some, it’s the quiet assurance of a Trust, built on confidence and discretion. For others, it’s the enduring framework of a Foundation, designed for control, continuity, and purpose. Within the DIFC, one of the world’s leading financial jurisdictions, these two vehicles shape how families protect, manage, and pass on wealth. But understanding where they differ is what transforms wealth management into legacy planning. 

DIFC Foundations and Trusts: Understanding the Core Concept 

A DIFC Trust is a relationship built on confidence. It involves a settlor, who transfers assets to a trustee, who then manages those assets for the benefit of beneficiaries. The trust itself is a framework of rights and obligations defined under the DIFC Trust Law. 

A DIFC Foundation, in contrast, is a legal entity in its own right. Created under the DIFC Foundations Law, it operates independently, guided by its charter and by-laws, and is managed by a council rather than a trustee. This gives it a corporate structure and a distinct personality in the eyes of the law. 

Control and Governance: Different Paths to Stewardship 

The question of control often determines which structure is most suitable. 

With Trusts, once assets are transferred, the trustee assumes control. While the settlor may outline detailed intentions in the trust deed, their ongoing influence is limited. This structure works best for those who prioritize independence and protection over day-to-day involvement. 

Foundations, on the other hand, allow founders to retain a guiding hand. Through participation on the foundation council or advisory boards, they can influence how wealth is managed and distributed. The governance model mirrors that of a corporate entity  adaptable, layered, and aligned with strategic family objectives. 

Purpose: Beyond Asset Holding 

While both serve as protective vehicles, their applications differ in focus. 

Trusts have traditionally been used for estate planning and wealth transfer, ensuring that assets are safeguarded and distributed in line with the settlor’s wishes. They are particularly effective when privacy, flexibility, and beneficiary-based planning are priorities. 

Foundations, however, often cater to a broader set of purposes. Beyond asset protection, they are ideal for family offices, philanthropic initiatives, and corporate structuring. Their ability to separate management from ownership allows families to institutionalize wealth management, turning family capital into a long-term, strategic platform. 

DIFC Foundations and Trusts: The Advantages and Regulatory Backing 

Both DIFC Foundations and Trusts operate within DIFC’s internationally recognized common law framework, offering robust legal certainty and investor confidence. Trusts derive their legitimacy from the DIFC Trust Law, which ensures flexibility and clarity in creation and administration. Foundations, meanwhile, must register with the DIFC Registrar of Companies under the DIFC Foundations Law, gaining legal personality and benefiting from transparent, yet confidential, operational safeguards. 

This distinction makes Foundations particularly appealing to family offices and private wealth structures seeking a blend of transparency, credibility, and protection. 

Confidentiality: Privacy Preserved 

The DIFC Foundations and Trusts offer discretion and confidentiality, a hallmark of private wealth management. 

Trusts operate as private legal arrangements, and no details are publicly disclosed. 
Foundations, despite being registered entities, only publish limited information typically their name and purpose while keeping details of beneficiaries and assets confidential. 

Thus, both provide the privacy families and investors expect from DIFC’s world-class jurisdiction. 

Tax Efficiency of DIFC Foundations 

Recent updates under Ministerial Decision No. 261 of 2024 have further enhanced the appeal of DIFC Foundations. 

Under the decision, family foundations and their wholly owned subsidiaries, including single-family offices (SFOs), can qualify for tax transparency provided their activities are confined to asset management and investment rather than active trading or personal investments in UAE securities and real estate. 

This means eligible foundations can potentially enjoy full corporate tax exemptions on qualifying income, offering a tax-neutral framework for long-term wealth preservation. 

Trusts also maintain a tax-neutral standing, though the extent of that benefit may depend on the residency of the settlor and beneficiaries. 

DIFC Foundations and Trusts: Choosing What Fits Your Vision 

The decision between DIFC Foundations and Trusts ultimately depends on what you value most. 

If you seek simplicity, confidentiality, and a clear separation between ownership and control, a DIFC Trust offers a tried-and-tested solution. It’s especially suited for estate planning and discreet wealth transfers. If you prefer greater control, a defined governance framework, and long-term flexibility particularly for family offices or philanthropic structures, a DIFC Foundation provides a more strategic alternative. The recent tax transparency reforms make it even more advantageous for investment-focused families. 

Set Up Your DIFC Foundation with Confidence 

At MS, we make establishing your DIFC Foundation seamless and straightforward. From initial structuring to final registration, our experts handle every step with precision. We steer through the DIFC Foundations Law on your behalf, ensuring your foundation is tailored to your objectives whether focused on family wealth management, a single-family office, or philanthropic pursuits. Having understood the distinctions between DIFC Foundations and Trusts, MS helps you move from concept to execution with clarity and assurance. 

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FTA Clarifies Corporate Tax of Family Wealth Management Structures in the UAE

FTA Clarifies Corporate Tax of Family Wealth Management Structures in the UAE

The Essentials

The UAE Federal Tax Authority (FTA) has clarified corporate tax of family wealth management structures, including family foundations, holding companies, SPVs, and family offices. The guidance explains when entities and family members qualify for tax transparency, outlines compliance requirements, and highlights exemptions on investment and real estate income, helping families manage wealth efficiently while staying fully compliant.

The UAE Federal Tax Authority (FTA) has recently issued clarifications on the corporate tax of family wealth management structures, offering crucial guidance for high-net-worth individuals, family offices, and their advisors. The clarification addresses the tax implications for entities such as family foundations, holding companies, Special Purpose Vehicles (SPVs), Single Family Offices (SFOs), Multi-Family Offices (MFOs), and family members, referencing Article 17 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 261 of 2024.

This guidance is intended to enhance transparency, clarify compliance obligations, and provide clarity on the conditions under which family wealth management structures may achieve tax-efficient status.

Corporate Tax of Family Wealth Management Structures

1. Family Foundations
 Foundations, trusts, or similar domestic or foreign vehicles can achieve tax transparency, meaning they are not considered taxable persons in their own right, if they meet the criteria outlined in Article 17(1) of the Corporate Tax Law.

  • Foundations with a separate legal personality must apply to the FTA for tax-transparent treatment.
  • Vehicles without a separate legal personality are automatically considered tax transparent.
  • This ensures that income generated through the foundation flows directly to beneficiaries without being taxed at the entity level, simplifying reporting and reducing potential tax liabilities.

2. Holding Companies & SPVs
 Entities wholly owned or controlled by a tax-transparent family foundation may also apply for tax transparency, provided they meet the relevant conditions.

  • If they do not qualify as tax transparent, these entities are taxable in their own right.
  • Such entities may still benefit from exemptions on certain income, including dividend income and income from holding activities if it is a QFZP.
  • Entities located in UAE Free Zones may qualify for a 0% corporate tax rate, subject to specific Free Zone criteria.

3. Single Family Offices (SFOs) & Multi-Family Offices (MFOs)
SFOs and MFOs are generally subject to corporate tax unless they meet the conditions for tax transparency. Key considerations include:

  • SFOs/MFOs must charge arm’s length fees when providing services to related parties to comply with transfer pricing rules.
  • Free Zone offices may benefit from a 0% corporate tax rate on Qualifying Income if they are regulated by competent authorities such as the DFSA, FSRA, or UAE Central Bank.
  • Unregulated offices do not qualify for these preferential rates on management or financial services income.

Corporate Tax Treatment of Family Members

Family members generally remain exempt from corporate tax of family wealth management structures on income received from:

  • Tax-transparent vehicles
  • Qualified family wealth management structures
  • Personal investment or real estate income

Exception: Tax liability arises if commercial business income from these holdings exceeds AED 1 million per year, ensuring that personal investment activities remain largely tax-efficient while larger business operations are appropriately taxed.

Corporate Tax of Family Wealth Management Structures: Implications and Key Takeaways

  • Assess Tax Transparency: Family foundations and other wealth management vehicles should evaluate whether applying for tax transparency is beneficial.
  • Prefer Regulated Free Zone Entities: Using regulated Free Zone structures can result in substantial exemptions for qualifying income.
  • Compliance Matters: Ongoing compliance and annual confirmation to the FTA are mandatory to maintain tax transparency status.
  • Family Member Considerations: Personal investment and real estate income generally remain exempt, but commercial business income thresholds must be monitored.
  • Dividend and Capital Gains Exemptions: Even non-transparent entities may benefit from exemptions on qualifying income streams.

How MS Can Help in Corporate Tax of Family Wealth Management Structures

MS provides comprehensive support to family offices, foundations, holding companies, and SPVs in understanding and applying corporate tax of family wealth management structures in the UAE. From evaluating eligibility for tax transparency and preparing FTA applications to advising on Free Zone benefits, compliance, and corporate tax planning, we help families and their advisors manage wealth efficiently, optimize tax outcomes, and ensure long-term preservation and growth of their assets.

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How the RAK ICC–DLD MoU Lets Your Company Set Up in RAK ICC Hold Freehold Property in Dubai?

MoU Lets Your Company Set Up in RAK ICC Hold Freehold Property in Dubai?

The Essentials

The Dubai Land Department (DLD) has signed a memorandum of understanding with Ras Al Khaimah International Corporate Centre (RAK ICC), allowing companies registered under RAK ICC to own and register freehold properties in Dubai. This development provides investors pursuing a company set up in RAK ICC with direct access to Dubai’s property market, opportunities for portfolio diversification, and enhanced options for wealth structuring.

The Dubai Land Department (DLD) has signed a memorandum of understanding (MoU) with Ras Al Khaimah International Corporate Centre (RAK ICC), giving companies registered under RAK ICC the ability to own and register freehold properties in Dubai.

This marks a significant step for RAK ICC, which has grown into one of the UAE’s leading corporate registries, attracting international investors seeking efficient structures for holding, wealth planning, and asset protection. The MoU now extends these advantages into Dubai’s real estate sector, one of the region’s most attractive markets.

How the Agreement Works?

Under the MoU, RAK ICC companies can now apply to register freehold properties, land, or related rights in Dubai through DLD. To complete the registration process, those who are looking for a company set up in RAK ICC must:

  • Provide the required legal documentation proving ownership.
  • Submit a No Objection Letter from relevant stakeholders.
  • Pay registration fees in line with DLD’s procedures.

While the framework primarily targets companies with natural person shareholders, DLD can also approve registrations for companies involving juristic persons (corporate entities) or mixed ownership structures. This flexibility ensures that both small investors and structured holding companies can benefit from Dubai’s freehold property opportunities through their RAK ICC entity.

By following these steps, investors undertaking a company incorporation in RAK ICC can seamlessly integrate property ownership in Dubai into their corporate and investment strategies, enhancing both asset diversification and long-term growth potential.

Why This Matters for Investors Looking for Company Set up in RAK ICC?

For investors using RAK ICC, this MoU represents a new layer of opportunity:

  • Direct Entry to Dubai’s Property Market: Previously, freehold ownership in Dubai was restricted for many free zone companies. With this agreement, RAK ICC entities gain direct access.
  • Portfolio Diversification: Holding companies set up in RAK ICC can now expand their portfolios by adding Dubai-based residential, commercial, or mixed-use assets.
  • Wealth Structuring Advantage: RAK ICC companies are widely used for asset protection and succession planning. Owning Dubai property through these entities adds a real estate dimension to wealth structuring strategies.
  • International Appeal: Dubai’s reputation as a safe, high-yield property market enhances the global appeal of RAK ICC structures for investors.

Strategic Alignment Between Dubai and RAK ICC

The collaboration reflects a broader UAE trend of economic integration and cooperation between emirates. For DLD, working with RAK ICC allows it to extend regulatory expertise and encourage more investment into Dubai’s property market. For RAK ICC, the MoU strengthens its position as a preferred jurisdiction for international investors, adding real estate ownership to its portfolio of advantages.

This alignment supports Dubai’s long-term strategy of:

  • Attracting international capital.
  • Ensuring transparent, regulated property ownership pathways.
  • Expanding real estate investment options across different corporate structures.

Broader Context of DLD’s Initiatives

The MoU with RAK ICC is part of DLD’s wider efforts to improve access and services for investors. DLD has also signed agreements with other RAK government entities, as well as initiatives with banks and financial institutions to streamline real estate processes. Together, these efforts reflect Dubai’s ongoing ambition to remain a global hub for real estate innovation, investment, and regulation.

Company Set up in RAK ICC: The Outlook Ahead

For global investors, the RAK ICC–DLD MoU provides both security and opportunity. Companies undergoing a company formation in RAK ICC can now confidently acquire Dubai freehold property within a clear regulatory framework, opening new avenues for growth, wealth diversification, and long-term planning.

By combining the investor-friendly environment of a RAK ICC company set up with Dubai’s thriving property market, this partnership further strengthens the UAE’s position as a premier destination for international investment.

How Can MS Help with Company Set up in RAK ICC?

MS simplifies the process of establishing a company in RAK ICC, guiding investors to take full advantage of the new opportunity to own Dubai freehold property.

Our Support Includes:

  • Company Incorporation: Complete handling of applications, documentation, and approvals for company set up in RAK ICC.
  • Regulatory Compliance: Ensuring your entity meets all RAK ICC requirements.
  • Property Registration Guidance: Assistance with documentation and DLD coordination for Dubai freehold ownership.
  • Ongoing Corporate Services: Secretarial support, amendments, and compliance management.
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Your Wealth, Your Legacy: How Foundations in RAK ICC Make It Possible? 

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. 

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. 

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Optimizing Family Wealth Through Holding Companies in the UAE: Corporate Tax Rules Explained! 

Optimizing Family Wealth Through Holding Companies in the UAE: Corporate Tax Rules Explained!

The Essentials 

Holding companies in the UAE play a pivotal role in family wealth management and investment planning. Their tax treatment depends on structure, ownership, and compliance with UAE corporate tax rules, including eligibility for tax transparency, Free Zone incentives, and participation exemptions. When structured effectively, holding companies help families optimize tax efficiency, protect and consolidate assets, and ensure smooth intergenerational wealth transfer, making them a central tool for long-term wealth preservation and strategic financial planning. 

As the UAE strengthens its position as a global hub for wealth management, families are increasingly turning to holding companies to manage, protect, and grow their assets. These companies play a key role in consolidating investments, supporting governance structures, and enabling smooth transfer of wealth across generations. 

With the nation’s evolving corporate tax landscape, understanding the tax treatment of holding companies in the UAE is important. By structuring these entities effectively through family foundations, family offices, or Free Zone vehicles, families can maximize tax efficiency, access exemptions, and safeguard their wealth for the long term. 

Core Tax Principles for Holding Companies in the UAE 

A holding company within a family wealth structure may take several forms: it can have a separate legal personality as a distinct juridical person or exist within a transparent trust/foundation structure. 

  • Taxable Person Status: By default, a holding company with its own legal personality is considered a taxable person. It is liable for UAE corporate tax unless it satisfies requirements for “tax transparency” under Article 17 of the Corporate Tax Law. 
  • Tax Transparency: If the holding company is wholly owned and controlled by a tax-transparent family foundation (established for the benefit of individuals or public benefit entities), and if both entities apply to the FTA and meet Article 17 and Article 171 conditions, the holding company itself may also be treated as tax transparent. In such a case, income is not taxable at the company level but may be taxed when distributed to ultimate beneficiaries (subject to certain thresholds and exemptions). 
  • Free Zone Incentives: Many holding companies in the UAE are established in Free Zones. If a holding vehicle has Free Zone Person (FZP) status, and its main activity is “holding shares and other securities for investment purposes,” it may qualify for a 0% corporate tax rate on relevant income, provided it also meets substance and regulatory requirements and is classified as a “Qualifying Free Zone Person”. 

Holding Companies in the UAE: Dividend and Capital Gains Exemptions 

Certain forms of passive income such as domestic dividends and qualifying foreign dividends and capital gains may be exempt from UAE corporate tax under the “participation exemption.” To benefit: 

  • The holding company should have at least a 5% ownership stake in the subsidiary or investment. 
  • The investment should be held for at least 12 months. 
  • The foreign subsidiary should be subject to a tax rate not less than the UAE’s standard. 
  • Holding companies in the UAE must meet additional conditions on income distribution and substance, as required by law. 

Example Structures and Practical Scenarios for Holding Companies in the UAE 

Scenario 1: Tax Transparency Across the Structure 

  • A family foundation (tax transparent) owns a holding company (HoldCo), which in turn owns investment SPVs. 
  • All entities apply for, and receive, tax-transparent status under Article 171. 
  • None of the entities are considered taxable persons at the corporate level. Only distributions or income received by family members may be taxed under personal investment rules, if business income thresholds are exceeded (AED 1 million turnover). 

Scenario 2: Free Zone Person and Qualifying Activities 

  • HoldCo is registered as a Free Zone Person and carries out qualifying activities (e.g., owning shares/securities). 
  • Even if HoldCo is not tax transparent, it benefits from a 0% corporate tax rate on qualifying income and enjoys participation exemption for domestic and qualifying foreign dividends/capital gains, subject to compliance. 
  • Structure optimization focuses on sustaining Free Zone compliance and activity thresholds. 

Scenario 3: Taxable Person without Exemption 

  • Regular corporate tax treatment applies; passive income may still be exempt if participation exemption applies, but other business income is taxed at standard UAE rates. 

Compliance, Regulatory Oversight, and Practical Considerations 

  • Each entity must maintain clear documentation and apply to the FTA for tax-transparent status when eligible. 
  • Free Zone entities must ensure their activities remain within the “qualifying activities” list, and that regulatory oversight is maintained where required. 
  • Corporate tax planning should consider periodic legislative changes – for instance, on the meaning of “business income” or the conditions for the 0% Free Zone rate. 
  • Family members generally are not subject to corporate tax on investment income received from transparent structures, unless it constitutes business income above the AED 1 million threshold. 

For comprehensive guidance on structuring, managing, and optimizing your family assets, including holding companies in the UAE, family foundations, and SPVs, reach out to MS to benefit from our expert advice and tailored solutions. 

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Corporate Tax Impact Assessment in the UAE: Prepare Ahead of the 30 September 2025 Filing Deadline 

The Essentials 

With the corporate tax return in the UAE due by 30 September 2025 for businesses operating on a 1 January–31 December 2024 financial year, companies must go beyond basic filing and focus on a Corporate Tax Impact Assessment in the UAE. This assessment helps anticipate liabilities, manage cash flow, identify risks, leverage tax reliefs, and avoid penalties. Key areas include financial review, understanding the tax law, related-party transactions, cash flow impact, and compliance documentation. 

The UAE’s corporate tax framework has introduced new responsibilities for businesses, with the first major milestone fast approaching. Companies operating on a financial year from 1 January 2024 to 31 December 2024 are required to submit their first corporate tax return by 30 September 2025. 

This timeline is an opportunity to evaluate how corporate tax will shape the way a business manages its finances and operations. Simply preparing figures for submission may satisfy the deadline, but it does not address the deeper implications that tax regulations bring. 

A Corporate Tax Impact Assessment in the UAE provides that wider perspective. By reviewing financial data, mapping obligations against the law, and assessing operational readiness, businesses gain clarity on their true position. This process helps prevent unexpected liabilities, ensures compliance, and allows companies to approach the deadline with both accuracy and foresight. 

Why Corporate Tax Impact Assessment in the UAE Matters Before Filing? 

Corporate tax in the UAE has the power to reshape how businesses plan their finances, structure their operations, and even make long-term strategic decisions. Conducting a Corporate Tax Impact Assessment in the UAE before filing ensures that companies are not only meeting their regulatory obligations but also protecting themselves from hidden risks and positioning for better financial outcomes. 

Here’s why it matters so much: 

  • Anticipating Liabilities and Planning Cash Flow 

Corporate tax introduces a new financial outflow that must be carefully managed. Without forecasting the amount of tax payable, businesses risk sudden cash flow shortages that can disrupt working capital, payroll, or planned investments. A corporate tax impact assessment in the UAE helps estimate the likely tax liability well before the deadline, giving management time to set aside funds and avoid liquidity pressures. 

  • Identifying Risks and Gaps 

Filing a return without proper review can expose a business to errors such as claiming ineligible expenses, missing required disclosures, or failing to document related-party transactions correctly. These gaps not only increase the chances of penalties but also raise the likelihood of a tax audit. By reviewing records, contracts, and intercompany dealings, the assessment highlights areas that need correction before submission. 

  • Leveraging Tax Reliefs and Opportunities 

The corporate tax framework in the UAE provides room for deductions, exemptions, and relief measures, but these must be identified and applied correctly. For example, certain expenses may be deductible, specific industries may enjoy relief, and restructuring transactions may reduce overall tax liability. An impact assessment ensures that businesses maximize these opportunities and do not leave money on the table. 

  • Avoiding Penalties and Regulatory Scrutiny 

Mistakes in reporting, underpayment of taxes, or late filing can result in significant penalties. In some cases, repeated errors can even damage a company’s credibility with regulators and financial institutions. A thorough corporate tax impact assessment in the UAE provides a safeguard by ensuring every number reported is accurate, supported by documentation, and compliant with regulations. 

Key Focus Areas for a Corporate Tax Impact Assessment in the UAE 

  • Financial Review – Ensure books are reconciled and aligned with corporate tax rules. 
  • Understanding the Corporate Tax Law – Identify taxable revenues, deductible expenses, and applicable exemptions. 
  • Related-Party Transactions – Confirm documentation supports fair market (arm’s-length) pricing. 
  • Cash Flow Impact – Assess how tax payments will affect working capital and liquidity. 
  • Compliance and Documentation – Prepare all required schedules, contracts, and supporting certificates. 

How MS Can Help in Corporate Tax Impact Assessment in the UAE? 

MS partners with businesses to turn corporate tax compliance into a strategic advantage. We assess the tax impact on your operations, highlight potential risks, and guide you in structuring your filings for accuracy and efficiency. With our expertise in UAE regulations, we ensure you meet deadlines seamlessly while creating opportunities for tax optimization. 

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