Categories
Company Formation

Wealth Planning in UAE: All You Must Know About RAK ICC Foundation Setup

Unlike in the past, the UAE is fast becoming a favourite destination for High-Net-Worth Individuals (HNI) looking for a robust way for wealth structuring and succession planning. Setting up a foundation in the UAE has emerged as the most viable option for HNIS to protect its assets. RAK (Ras Al Khaimah) ICC in recent years has come up with a set of regulations that facilitate a smooth process of company formation in the UAE. With the help of registered agents in the UAE, you can easily set up a Foundation as per RAK ICC Foundation Regulation 2019.

The RAK ICC is the latest entrant into the UAE’s Foundation regime with DIFC & ADGM being the early entrants. Before moving on to set up a RAK ICC Foundation, HNIs need to have a look at the structure, features, regulation and mandatory requirements. Hope this blog will serve as a worthy introduction to forming a Foundation at RAK ICC. Let’s explore.

What’s A RAK ICC Foundation?

A RAK ICC Foundation is a corporate entity with a legal personality separate from that of its Founder. The Foundation is governed by its Charter and By-laws which together define the objective of the Founder. A Foundation is set up by a founder to endow assets for specified charitable or non-charitable purposes. A RAK ICC Foundation is administered by its council, which carries out its objects as per the founder’s wishes.

How Does a RAK ICC Foundation Work?

A Founder transfers his wealth into the Foundation which will hold and manage the wealth for the benefit of the beneficiaries. The Foundation will hold the ownership over the wealth or property and the beneficiaries will receive distributions from the Foundations and enjoy all the profits and benefits of the Foundation. A Guardian needs to be appointed who will protect and watch over the Council of the Foundation. A Foundation will have a Charter and By-laws that state the powers of the Guardian and the Council.

Structure of a RAK ICC Foundation

A RAK ICC Foundation comprises the following components that form its structure:

The Founder

The Founder creates and contributes Property to the RAK ICC Foundation. The RAK ICC Foundation Regulations 2019 defines a Property as any moveable or immovable property comprising the initial capital of the Foundation including money, investment, and any other property. The Founder has the following powers in a RAK ICC Foundation:

a. Power to change or revoke the terms of Charter or By-laws of the Foundation

b. Power to change the objectives of a Foundation

c. Control over investment activities of the Foundation

d. The power to terminate the Foundation

e. Power to remove other constituents of the Foundation such as the Council and the Guardian

The Council

A RAK ICC Foundation Council must have at least two Council members that can be a Founder and a body corporate. The Council’s responsibilities include carrying out the objects of a Foundation and administering its Property.  A Council Member can be a natural person or a legal person. However, a natural person doesn’t qualify as a Council member if the Person is a Minor, mentally incapacitated or has an undischarged bankruptcy. A Legal Person can’t be appointed or remain as Council Member if it is insolvent, has had a receiver or liquidator appointed or is dissolved.

The Guardian

A RAK ICC Foundation should appoint a Guardian if it has a charitable object or a specified non-charitable object. A Guardian can be a Qualified Recipient and maybe a Legal Person but may not be a Council Member. A registered agent can be a Qualified Recipient as per RAK ICC Foundation Regulations 2019.

The Designee

A Designee is a default recipient to whom all property of a Foundation for which provision has not otherwise been made shall pass in the event of the termination of the Foundation. The Designee should be identified in the Charter or By-laws of a RAK ICC Foundation.

Registered Agent

Appointing a Registered Agent is a prerequisite for successfully establishing a Foundation in RAK ICC. The functions of a Registered Agent should be in accordance with the RAK ICC Foundation By-laws. You are not allowed to appoint more than one Registered Agent at any time. A Registered Office is mandatory for a RAK ICC Foundation to which all communications and notices may be addressed. The Registered Office should be in the UAE and it can be the registered office of its Registered Agent.

How can Jitendra Business Consultants Help you?

With RAK ICC joining the Foundation regime, wealth structuring in the UAE has become more flexible for HNIs. RAK ICC offers a robust governing regulation for wealthy individuals to establish Foundations in the UAE. With the help of RAK ICC registered agents, it is now easier to set up a foundation in the UAE. Jitendra Business Consultants (JBC) can act as registered agents for wealthy individuals to safely plan their succession and wealth structuring.

JBC is a prominent business setup consultant in Dubai catering to a broad spectrum of clients – from individual entrepreneurs and local SMEs to wealthy international families who aim for robust wealth structuring plans. We have years of experience in advising successful individuals and international families on legacy planning and wealth structuring issues, including the formation of a Foundation in RAK ICC. Our business setup consultants in UAE will assist in the HNI’s vision, implementing governance aspects and incorporating and providing ongoing support to the appropriate structure.