Established under the RAK ICC Foundations Regulations 2019, a RAK ICC Foundation is a separate legal person capable of owning assets, entering into contracts and holding shares in its own name. Once assets are transferred to the Foundation, legal ownership passes to the Foundation itself rather than remaining with the Founder. That separation between personal ownership and structured ownership is central to its use in succession planning and asset protection arrangements.
Why choose a RAK ICC Foundation?
RAK ICC Foundations are often selected for their flexibility, relatively straightforward regulatory environment and competitive cost base when compared with other regional options. They are particularly suited to private wealth and holding structures that do not require a financial services licence.
The jurisdiction allows:
- A high degree of confidentiality in relation to internal governance
- Flexible drafting of constitutional documents
- The ability to hold shares in UAE and international companies
- Perpetual existence, unless otherwise specified
- Clear separation between Founder and Foundation assets
In practical terms, the structure is frequently used as a holding vehicle rather than an operating entity. It sits above underlying companies or investment assets and provides continuity beyond the lifetime of the Founder.
Roles and Governance Structure
A RAK ICC Foundation is created by a Founder and shaped by two principal documents: the Charter and the By-Laws. Together, they define how the Foundation is intended to operate and how authority is exercised.
The Charter sets the framework of the Foundation and is filed with RAK ICC. It records the Foundation’s name, its objects and its registered office. The By-Laws clearly define the Foundation’s purpose and specific objectives it aims to achieve. It outlines the governance framework, including the roles and responsibilities of its officers. The By-Laws are not available to the public.
The Foundation must appoint at least two council members. Day-to-day responsibility rests with the Council. The Council must administer the Foundation in line with its Charter and By-Laws and in furtherance of its stated purpose. In some cases, particularly where younger or future beneficiaries are involved, a Guardian is appointed to provide oversight and an additional layer of reassurance.
A high level summary below of roles within a RAK ICC foundation
Foundation Council
- Manages the Foundation and protects assets.
- At least 2 members; can appoint replacements and must report changes. Can include family members, founder, trusted advisor or professional advisers.
- Must act in good faith and follow governing rules.
Beneficiaries
- Receive benefits but have no automatic rights.
- Identities can remain confidential.
- Rights and conditions depend on By-laws.
Guardian
- Ensures compliance with rules.
- Has full access to information.
- Oversees the Council (like a protector).
As a matter of local company law, the company MUST appoint an approved registered agent and appoint a registered office address.
Typical applications
RAK ICC Foundations are commonly used for:
- succession planning and orderly transfer of wealth
- consolidation of family shareholdings
- holding structures for private investment vehicles
- asset protection from personal exposure
The Foundation can exist for an unlimited duration, which makes it suitable for long-term family planning.
Incorporation process
Incorporation is completed by submitting an application to RAK ICC together with the Charter and By-Laws and supporting due diligence documentation. The review process is administrative in nature and, in uncomplicated cases, approval is often issued within 10 business days.
The main steps are:
- Confirm the purpose and proposed governance structure
- Prepare the Foundation’s Charter and By-Laws
- Submit the incorporation application with due diligence documents
- Receive the Certificate of Registration upon approval
- Once registered, the Foundation may open bank accounts and receive transfers of shares or other assets.
The incorporation process itself is relatively direct. The substantive work lies in ensuring that the Foundation has been structured properly before submission.
Ongoing requirements
A RAK ICC Foundation is required to maintain a registered office address and to keep its constitutional documents and statutory records up to date. Proper accounting records must also be maintained so that the position of the Foundation can be understood at any given time.
Ongoing compliance with applicable anti-money laundering requirements is also necessary throughout the life of the structure.
For most private holding arrangements, these obligations are straightforward. They do, however, require consistent oversight, particularly where assets or governance arrangements change over time.
How Sovereign can help
Sovereign is a licensed registered agent with RAK ICC and can assist foreign investors with the incorporation process and ongoing administration of RAK ICC Foundations. Our Business Development team can conduct a wealth and structure review as part of wider private client and corporate structuring arrangements. Our work includes drafting registration documents, coordinating incorporation and providing registered office and ongoing support services.
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Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
