Florian Herkommer November 19, 2025 Foundations have become an essential structuring tool in the United Arab Emirates (UAE), particularly for succession planning, asset protection, and international wealth management. The Ras Al Khaimah International Corporate Centre (RAK ICC) introduced its Foundations regime in 2019, with substantial amendments taking effect on 31 July 2025 to further enhance the framework. These changes consolidate RAK ICC’s position as a leading jurisdiction for estate planning and family governance in the region. What Are RAK ICC Foundations? A RAK ICC Foundation is a corporate entity with a separate legal personality, distinct from its founder. Unlike a company, it has no shareholders or members. Instead, it is governed by a Charter and By-Laws, administered by a Council, and may be supervised by a Guardian. Key characteristics include the clear separation of liability and the perpetual legal existence of the entity, making it an effective tool for long-term succession planning. Foundations can be used for a wide range of purposes, including asset protection, family governance, philanthropy, and the holding of assets or shares in operating companies. They are highly confidential, as only limited information is available on the public register, while the By-Laws remain private. Beneficiaries may be individuals, corporate entities, or even natural persons not yet born, which gives the structure exceptional flexibility. These features make RAK ICC Foundations comparable to structures available in Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), while maintaining certain unique characteristics such as mandatory use of a registered agent and stronger confidentiality. How Do RAK ICC Foundations Work? The establishment of a foundation requires: A Founder (individual or legal entity). At least two Council Members, who may include family members or professional advisers. A Registered Agent and a UAE-registered office. A Guardian, if the Foundation has charitable or specific non-charitable purposes. The minimum capital requirement is only USD 100, with the option to contribute additional property thereafter. Assets transferred to the Foundation become legally owned by the entity itself, creating a clear separation from the founder’s personal estate. Governance is exercised through the Council in accordance with the By-Laws, while the Guardian (if appointed) ensures compliance. Disputes fall under either the DIFC Courts or the ADGM Courts, depending on the choice made in the Charter. Importantly, accounting records must be maintained but do not need to be audited or filed publicly, ensuring confidentiality. Key Amendments Effective July 2025 The 2025 amendments to the RAK ICC Foundations Regulations 2019 introduce a series of refinements designed to strengthen the regime and give stakeholders greater confidence in using RAK ICC Foundations for succession planning, wealth structuring, and asset protection. All these changes apply automatically to existing Foundations. There is no requirement for amendments to Charters or By-Laws, and no additional filings or costs are necessary. Firewall Provisions The updated firewall rules ensure that foreign judgments inconsistent with the RAK ICC Regulations will not be recognized or enforced by the DIFC or ADGM Courts. In practice, this means the estate and succession planning of a founder cannot be undermined by claims made in foreign courts, such as those based on forced heirship rules or marital property regimes abroad. Creditors or heirs who seek to challenge the Foundation must therefore bring their claims under UAE law, rather than relying on the enforcement of foreign judgments. Three-Year Statute of Limitations The amendments also introduce a clear limitation period of three years for challenging the validity of a Foundation or the transfer of assets into it. Once three years have passed since the establishment or the asset transfer, claims by disgruntled family members, heirs, or creditors are time-barred. For wealthy families and their advisers, this ensures that structures cannot be reopened indefinitely. Cause of Action Provisions Where a creditor demonstrates actual fraud in the transfer of assets to a Foundation, the courts may now set aside the transfer, but only to the extent necessary to satisfy the creditor’s proven claim. In practice, this strikes a balance between the protection of creditors and the preservation of the Foundation’s integrity. Even if fraud is established, the Foundation will not be dismantled entirely. Instead, it will only lose those assets required to meet the creditor’s specific claim, thereby preserving stability and continuity for the beneficiaries. Duress Protection Clause A further amendment is the duress protection clause. This provision instructs Foundation officers, guardians, and council members to disregard demands or instructions made under coercion, foreign legal processes, or unlawful pressure. Only instructions given freely and lawfully under the Charter, By-Laws, and the RAK ICC Regulations are to be recognized. In practical terms, this shields Foundations from hostile foreign proceedings or attempts to pressure council members into acting against the interests of the structure. Strengthened Arbitration Framework The amendments also strengthen the arbitration framework by allowing disputes to be resolved more effectively through arbitration. Arbitral tribunals are now granted powers akin to those of the courts in relation to the administration of a Foundation and the rights of beneficiaries. For high-net-worth families and investors, this development is particularly attractive, as arbitration ensures confidentiality of council decisions, beneficiary rights, or founder powers. Private Trustee Foundation Provisions Finally, the reforms clarify the status of private trustee Foundations by providing certainty on how property held by a Foundation in trust is treated under the law. This development is especially relevant for complex cross-border structures where a Foundation may act as trustee of assets in other jurisdictions. Founders and advisers can now structure such arrangements with confidence that they will be recognized and enforceable. What This Means for Investors and Families For investors, family businesses, and high-net-worth individuals, the 2025 reforms enhance the attractiveness of RAK ICC Foundations by: Providing greater protection against foreign interference and creditor claims. Ensuring legal certainty through clear limitation periods. Offering confidential and robust dispute resolution via strengthened arbitration. Supporting cross-border wealth structuring with clarity and flexibility. These improvements make RAK ICC a highly competitive jurisdiction, especially when compared with other offshore centres, by combining low establishment costs, robust governance, and privacy. With the 2025 amendments, RAK ICC Foundations are positioned as a benchmark wealth-structuring vehicle in the UAE. They provide a future-proof platform for succession planning, asset protection, and family governance, supported by a modernized legal framework and judicial oversight through DIFC and ADGM Courts.
