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You are here: Home1 / Company in Dubai2 / Types of Entities in the UAE3 / The Foundation
  • The Foundation

A foundation is an independent legal entity that holds assets separately from the personal property of the founder.

Unlike a trust, which is a concept derived from common law, the foundation originally comes from civil law jurisdictions.

It is similar to a corperation in that it has its own legal personality. However, a foundation does not issue shares or any other legal title – it is an “orphan” structure. A foundation must have one or more business activity, which can be for the benefit of one or more beneficiaries (named or not).

A foundation is governed by its charter and by-laws, which together reflect the wishes of its Founder. It is managed by Council Members and can be supervised by a Guardian who ensures that its Council Members manage the foundation as desired by its founder. The assets of a foundation belong to the foundation in its own name.

Foundations are used mainly for the following reasons:
– Asset structuring, succession, and estate planning;
– Protection of assets against rules of forced inheritance, hostile creditors and takeover bids;
– Long-term holding structure;
– For charitable and/ or philanthropic purposes.

Overview of a Foundation

FounderThe founder established the Foundation and is the initial source of its assets. It can be a natural person or legal entity.
CouncilThe foundation’s governing body, analogous to a Board of Directors. There must be at least 2 council members which can be either natural persons or legal entities.
GuardianThe protector of the foundation. They control the actions of the Council and verify that the wishes of the founder are being respected. The Guardian can be a natural or legal person. The founder can be Guardian, but the Guardian cannot be a member of the Council.
DesigneeIf there is no longer a beneficiary, the assets of a foundation will revert to the designee. If none is appointed, the assets will revert to the authorities in the jurisdiction of the Foundation.
Qualified RecipientThis is the beneficiary or beneficiaries of the foundation’s income. It can be a natural person (born or unborn) or legal entity, a category of people, etc.
Registered AgentThe foundation is required to be hosted by its agent. We of course provide this service as a registered agent.
CourtThe choice of court and the law applicable to the Foundation: DIFC or ADGM.
LifespanLimited (date or number of years) or unlimited (perpetual) or linked to an event.
Minimum Initial CapitalMinimum of USD 100.
Accounting and AuditsIt is mandatory to maintain accounts. An annual audit of the accounts is not compulsory, but is recommended.
Timeline for Registering a Foundation3 working days.

How a Foundation Works

Required Documents to Set Up a Foundation

Here are the documents to provide for each natural person actor of the foundation:

  • Passport: copy of passport.
  • Proof of address: copy of a utility bill (water, electricity, gas, telephone bill, etc.) dated less than 3 months or a Certificate of residence issued by City Hall, Consulate, etc.

Here are the documents to be provided for each legal entity actor of the foundation:

  • Company documents: copy of the company’s articles of association, list of its directors and partners. A translation / certification of these documents can be requested by the Registry.
  • For all managers and associates: copy of passport.
  • For all managers and associates: copy of a utility bill (water, electricity, gas, telephone bill, etc.) dated less than 3 months or a Residence Certificate issued by City Hall, Consulate, etc.

Pricing

Pricing for a foundation

The costs of a foundation are as follows:

  • Foundation Fee
    Foundation Fee
  • Setup Fees and Review of Foundation Charter and By-Laws
    Setup Fees and Review of Foundation Charter and By-Laws
  • Registered Office Address
    Registered Office Address
  • Service Charges
    Service Charges
  • TOTAL
    TOTAL
Foundation Set up + Year 1
  • Foundation Fee
    AED 750
  • Setup Fees and Review of Foundation Charter and By-Laws
    AED 3,673
  • Registered Office Address
    AED 2,000
  • Service Charges
    AED 1,673
  • TOTAL
    AED 8,096
Annual Fee from Year 2
  • Foundation Fee
    AED 750
  • Setup Fees and Review of Foundation Charter and By-Laws
    --
  • Registered Office Address
    AED 2,000
  • Service Charges
    AED 1,673
  • TOTAL
    AED 4,423

What our package include

Our packages include the following:

Services provided for one time Foundation Set Up Costs:
– Service Charge -> these are our fees (nothing to add all is included!)
– VAT and accountancy training -> we explain how VAT works and your foundation’s accounting obligations
– Salary Register -> establishment of the Employee Register
– Company stamp -> this is a stamp that complies with local regulations (required for opening a bank account, etc.)
– FREE assistance in opening a bank account -> we assist you in opening a bank account for your foundation
– FREE setup of invoicing and accounting application -> Installation and configuration of invoicing and accounting software

Services provided with Maintenance Costs per year:
– Service Charge -> our fee for renewing and monitoring your foundation
– UNLIMITED after-sale support concerning your foundation in the UAE -> we provide unlimited customer support to answer all your questions
– Coordination with Accountant -> we provide a coordination service with the accountant of your foundation
– Coordination with Auditor -> we provide a coordination service with the auditor of your foundation
– Coordination with Tax Agent -> we provide a coordination service with the tax agent in charge of the VAT of your foundation
– Subscription to Merritt Updates -> legal, fiscal and social watch on the Emirates sent by email
– UNLIMITED access to Merritt.center -> all administrative, legal and accounting documents of your foundation in a secure customer portal
– UNLIMITED access to Merritt.guide -> all useful information for your foundation and your residence in the UAE
– Maintenance of UBO Register -> this involves maintaining and updating the Register of final beneficiaries as required by the Authorities
– Correspondence address in Dubai (including UNLIMITED scan and forward of your mails and courier) -> we scan / resend your mail as soon as it arrives according to your instructions
– FREE shared telephone number in the UAE (with answering in English and Arabic) -> shared telephone number with telephone secretary in English and Arabic
– FREE domain name + WordPress pre-installed + emails-> domain name + installation of a WordPress showcase site + email addresses on a server located in Dubai

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Goldcrest Executive Tower – Cluster C
Jumeirah Lakes Towers – Dubai
United Arab Emirates

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WhatsApps: +971 52 557 3356
Email: support@merritt.group

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All legal services are provided by Merritt Legal Consultants FZ LLC.

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