RAK ICC Foundations: Asset Protection and Succession Planning in the UAE
Building a successful business or investment portfolio is only one part of long-term wealth planning. Business owners must also consider how their assets will be protected, managed and transferred if they die or become unable to manage them personally.
A RAK ICC Foundation provides a structured way to hold assets, manage family wealth and establish clear rules for future ownership and distributions. As a separate legal entity, the Foundation can continue to exist beyond the lifetime of its Founder, helping to reduce disruption and preserve continuity across generations.
However, a Foundation is not simply another type of company. It is a specialised ownership and governance structure that must be carefully designed around the assets involved, the intended beneficiaries and the Founder’s long-term objectives.
In this guide, we explain how RAK ICC Foundations work, what they can be used for, who controls them, their Corporate Tax treatment and the key points to consider before establishing one.
What Is a RAK ICC Foundation?
A RAK ICC Foundation is a corporate body registered with the Ras Al Khaimah International Corporate Centre. It has a legal personality separate from its Founder, Council members and beneficiaries.
Unlike a conventional company, a Foundation does not have shareholders. The Founder contributes assets to the Foundation, which then becomes their legal owner. Those assets are administered by the Foundation Council in accordance with its Charter and By-Laws for the benefit of the designated recipients or stated purpose.
A RAK ICC Foundation has perpetual existence, meaning that it can continue after the death or incapacity of its Founder. It is primarily an asset-holding, succession and governance structure, rather than a vehicle for conducting ordinary commercial activities.
What Can a RAK ICC Foundation Be Used For?
A RAK ICC Foundation can be used to hold and manage different types of assets within a structured legal and governance framework. Common uses include:
Holding shares in family businesses or operating companies
Managing investment portfolios and financial assets
Holding intellectual property and other valuable rights
Owning real estate, subject to the rules of the jurisdiction where the property is located
Preserving family wealth across generations
Establishing rules for distributions to family members or other beneficiaries
Supporting charitable or philanthropic objectives
Separating strategic asset ownership from day-to-day business operations
Maintaining continuity following the death or incapacity of the Founder
The Foundation may own shares in an operating company, but it is not intended to replace that company. The operating company continues conducting commercial activities, while the Foundation sits above it as the long-term ownership and succession vehicle.
Why Use a RAK ICC Foundation?
Succession Planning
When assets are held personally, the death or incapacity of the owner may trigger probate, inheritance procedures and changes in legal ownership. Assets held by a Foundation remain legally owned by the Foundation, allowing their administration to continue according to the rules established by the Founder.
Asset Separation
Once assets have been legally transferred, they become the property of the Foundation and are separated from the Founder’s personal estate. This can provide greater protection and continuity, although a Foundation cannot be used to conceal assets, avoid legitimate obligations or defraud creditors.
Family Governance
The Charter and By-Laws can establish how assets are managed, who makes decisions, who may receive benefits and under what conditions distributions may be made. This can help reduce uncertainty and disagreements between future generations.
Preservation of Business Ownership
A Foundation can hold the shares of an operating company as a single long-term owner. Family members may receive benefits without dividing the company’s shares among multiple heirs, helping to prevent fragmentation of the business.
Perpetual Existence
The Foundation can continue beyond the lifetime of its Founder. Its assets and governance arrangements do not automatically end when the Founder dies, supporting long-term continuity across generations.
Who Controls a RAK ICC Foundation?
A RAK ICC Foundation is managed through a defined governance structure involving several key participants.
The Founder
The Founder establishes the Foundation and contributes its initial assets. The Founder may be an individual or a corporate entity and may retain certain powers if these are expressly included in the Charter. These may include the power to:
Amend the Charter or By-Laws
Change the Foundation’s objectives
Approve investment decisions
Appoint or remove Council members or the Guardian
Terminate the Foundation
The Foundation Council
The Council administers the Foundation’s assets and carries out its objectives. It must include at least two members, who may be individuals or corporate entities. Council members must act honestly, exercise reasonable care and manage the Foundation in accordance with its Charter, By-Laws and applicable regulations.
The Guardian
The Guardian supervises the Council and monitors compliance with the Foundation’s constitutional documents. Appointing a Guardian is generally optional when the Foundation benefits specified individuals or classes of beneficiaries. However, a Guardian is required when the Foundation has a charitable or specified non-charitable purpose. The same person cannot act simultaneously as a Council member and Guardian.
Qualified Recipients
Qualified recipients are the individuals or classes of people who may receive benefits from the Foundation. They may be specifically named or identified through a category, such as the Founder’s children or future descendants.
The Registered Agent
Every RAK ICC Foundation must appoint a Registered Agent approved by RAK ICC and maintain a registered office in the UAE. The Registered Agent manages the official filings and acts as the formal point of contact with the Registry.
Requirements for Establishing a RAK ICC Foundation
The minimum initial capital required to establish a RAK ICC Foundation is USD 100, or its equivalent in another currency. Additional assets may be contributed after registration if permitted by the Foundation’s Charter. The principal formation requirements include:
A Founder, who may be an individual or corporate entity
At least two Council members
An approved RAK ICC Registered Agent
A registered office in the UAE
A Guardian, where required or voluntarily appointed
A Foundation Charter and By-Laws
Details of the Foundation’s objectives and initial assets
Identification and due diligence documents for the relevant parties
The application must be signed by the Founder and submitted to RAK ICC through the appointed Registered Agent. Once approved, the Registry issues the Foundation’s Certificate of Registration.
The Importance of the Charter and By-Laws
The Charter and By-Laws are the constitutional documents that determine how the Foundation will operate.
The Charter contains the Foundation’s essential information, including its name, objectives, initial assets, governance structure and provisions for the appointment of the Council. It may also specify any powers reserved by the Founder.
The By-Laws provide the detailed internal rules governing matters such as:
Council decision-making procedures
Appointment and removal of Council members
Powers and responsibilities of the Guardian
Identification of qualified recipients
Conditions for making distributions
Investment powers and restrictions
Procedures following the Founder’s death or incapacity
Amendment or termination of the Foundation
These documents should reflect the Founder’s actual succession and governance objectives. Standard documents may complete the registration process, but carefully drafted provisions are necessary if the Foundation is expected to manage substantial or complex assets over several generations.
Transferring Assets to the Foundation
Registering a RAK ICC Foundation does not automatically transfer the Founder’s assets into it. Each asset must be legally transferred so that the Foundation becomes its registered owner. Depending on the type of asset, this may involve:
Updating a company’s share register
Executing share transfer documents
Obtaining approval from the relevant licensing or regulatory authority
Transferring investment or bank accounts
Updating intellectual property ownership records
Registering a property transfer with the relevant land authority
Reviewing contractual restrictions or third-party consent requirements
Assets located outside the UAE remain subject to the laws of the jurisdiction in which they are registered. The transfer process should therefore be reviewed before the Foundation is established.
A Foundation that has been registered but has not received legal ownership of the intended assets cannot provide the ownership continuity or succession benefits for which it was created.
What Changed Under the 2025 RAK ICC Foundation Regulations?
The RAK ICC Foundations Regulations were amended with effect from 31 July 2025. The amendments strengthened the legal framework governing asset protection, disputes and the administration of Foundations. The principal developments include:
Stronger provisions concerning foreign laws and judgments that conflict with the RAK ICC framework
A three-year limitation period for certain legal challenges against the establishment of a Foundation or the transfer of property to it
Clearer rules governing claims made by creditors
Protection against decisions or instructions made under duress
Enhanced arbitration provisions for Foundation-related disputes
Greater clarity regarding the definition and treatment of Foundation property
The regulations continue to protect legitimate creditor claims. Where a transfer was intended to defraud a creditor and left the Founder or contributor insolvent, the Foundation may be required to satisfy the relevant claim within the limits established by the regulations.
Corporate Tax Treatment of RAK ICC Foundations
A RAK ICC Foundation is a juridical person and should not be assumed to be automatically exempt from UAE Corporate Tax. Where the relevant conditions are satisfied, the Foundation may apply to the Federal Tax Authority to be treated as a fiscally transparent Unincorporated Partnership. If the application is approved, the Foundation will not be subject to Corporate Tax in its own right. Its income, expenditure, assets and liabilities will instead be attributed to its beneficiaries according to their respective interests. To qualify, the Foundation must generally:
Benefit identified or identifiable natural persons, public benefit entities or both
Primarily receive, hold, invest, distribute or manage savings and investment assets
Avoid conducting activities that would constitute a business if performed directly by the Founder or beneficiaries
Not have Corporate Tax avoidance as its principal purpose
Meet the relevant distribution conditions where a public benefit entity is included as a beneficiary
A juridical Foundation must first register for Corporate Tax before applying for fiscally transparent treatment. Once approved, it must continue meeting the qualifying conditions and submit the required annual confirmation to the FTA.
The Corporate Tax position must be assessed according to the Foundation’s assets, activities and beneficiaries. Establishing a Foundation does not automatically guarantee tax transparency or a zero-tax outcome.
Ongoing Compliance Requirements
A RAK ICC Foundation remains subject to annual governance, record-keeping and regulatory obligations after registration. These include:
Maintaining an approved Registered Agent
Maintaining a registered office in the UAE
Filing an annual return with the RAK ICC Registry
Paying the applicable annual renewal and filing fees
Keeping adequate accounting records
Having the Foundation’s accounts approved by the Council
Preserving accounting records for at least five years
Reporting changes to the Council, Guardian, Registered Agent or constitutional documents
Maintaining current due diligence and beneficial ownership information
Complying with applicable UAE Corporate Tax requirements
Administering assets and distributions in accordance with the Charter and By-Laws
The Foundation’s accounting records are not publicly disclosed by the Registrar. However, they must be maintained properly and provided to the relevant authorities when legally requested.
Who Should Consider a RAK ICC Foundation?
A RAK ICC Foundation may be suitable for:
Entrepreneurs holding shares in one or more operating companies
Families with investment or property portfolios across different jurisdictions
Business owners concerned about continuity following death or incapacity
Families seeking formal governance arrangements across generations
Individuals who want to separate long-term ownership from personal management
Founders planning structured distributions to children or future descendants
Families combining private wealth planning with charitable objectives
A Foundation may not be appropriate where the intention is to conduct active commercial trading directly, avoid an existing creditor claim, conceal asset ownership or establish a structure without a genuine succession or governance purpose. The decision should be based on the assets to be held, the jurisdictions involved, the intended beneficiaries and the long-term responsibilities of the people appointed to manage the Foundation.
How to Establish a RAK ICC Foundation
The formation process should begin with the intended purpose and ownership structure, rather than with the registration documents alone.
1. Define the Foundation’s Purpose
Determine whether the Foundation will be used for succession planning, family wealth management, business ownership, asset protection, philanthropy or a combination of these objectives.
2. Identify the Assets
Prepare a complete list of the assets that the Foundation is expected to hold. Confirm where they are registered and whether any transfer restrictions, approvals or tax consequences apply.
3. Design the Governance Structure
Appoint the Founder, Council members, Registered Agent and, where appropriate, a Guardian. The decision-making powers and responsibilities of each participant should be clearly defined.
4. Prepare the Charter and By-Laws
Draft the constitutional documents around the Foundation’s objectives, recipients, distribution rules, investment powers and succession arrangements.
5. Complete the Registration
Submit the application and due diligence documents through an approved RAK ICC Registered Agent. Once the application is approved, RAK ICC issues the Certificate of Registration.
6. Transfer the Assets
Complete the legal transfer of the intended shares, investments, intellectual property, property or other assets into the Foundation’s name.
7. Establish Ongoing Compliance
Put appropriate accounting, record-keeping, Corporate Tax and annual renewal procedures in place from the beginning.
Frequently Asked Questions About RAK ICC Foundations
Can the Founder Retain Control?
Yes. The Founder may reserve certain powers if they are expressly included in the Charter. These may include powers to amend the constitutional documents, approve investments, appoint or remove Council members, change the Foundation’s objectives or terminate the Foundation.
The reserved powers are subject to the limits established by the RAK ICC Foundations Regulations.
Can a RAK ICC Foundation Own Shares in a UAE Company?
Yes. A Foundation may hold shares in RAK ICC companies and other operating companies, subject to the rules of the relevant licensing authority and the company’s constitutional documents. The share transfer must be formally completed before the Foundation becomes the legal shareholder.
Can a RAK ICC Foundation Own Real Estate?
A Foundation may potentially hold real estate. However, ownership eligibility and transfer procedures depend on the location of the property and the regulations of the relevant land authority. The position should be confirmed before including real estate in the proposed structure.
Is a Guardian Mandatory?
A Guardian is generally optional when the Foundation benefits named individuals or defined classes of recipients. A Guardian is required where the Foundation has a charitable or specified non-charitable objective. The Founder may also appoint one voluntarily to provide additional oversight of the Council.
Can the Foundation Conduct Commercial Activities?
A RAK ICC Foundation is not intended to operate as a conventional trading company. It may only conduct activities that are necessary, ancillary or incidental to its stated objectives. Commercial operations are usually conducted through a separate company whose shares may be owned by the Foundation.
Does a Foundation Replace a Will?
Not necessarily. The Foundation only controls assets that have been legally transferred to it. Assets remaining in the Founder’s personal name may still be subject to inheritance procedures and require separate succession planning.
A Foundation should therefore be coordinated with the Founder’s wills, shareholder agreements, powers of attorney and other estate-planning arrangements.
How NUR Advisors Group Can Assist
Establishing a RAK ICC Foundation requires more than completing a registration application. The structure must be designed around the assets involved, the Founder’s objectives, the intended recipients and the governance arrangements that will apply in the future.
NUR Advisors Group can assist with:
Assessing whether a RAK ICC Foundation is suitable for the intended purpose
Coordinating the proposed ownership and governance structure
Liaising with the approved Registered Agent
Coordinating the registration and due diligence process
Supporting the preparation of the required corporate documentation
Planning the transfer of shares and other assets
Coordinating ongoing accounting, Corporate Tax and annual compliance requirements
Working with specialist legal and tax advisers where required
Planning to Establish a RAK ICC Foundation?
A Foundation should begin with a clear ownership, succession or governance objective. The registration should support that strategy, not replace it.
Contact NUR Advisors Group to discuss whether a RAK ICC Foundation is appropriate for your business interests, family assets and long-term plans.
This article is provided for general information and does not constitute legal, tax or investment advice. The suitability and treatment of any Foundation depend on its assets, activities, beneficiaries and the jurisdictions involved.
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