Family Foundations in UAE: A Framework and Key Corporate Tax Implications

In the UAE, family foundation is a popular legal structure primarily used by wealthy families and high-net-worth individuals for wealth preservation, succession planning, and asset protection. They are becoming increasingly popular in the UAE, especially after the introduction of the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) foundations regimes.

The UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022 on Corporate Taxation, effective for tax periods beginning on or after 1 June 2023, and the Ministerial Decision No. 261 of 2024) lays down various aspects of taxation of Family Foundation. However, still lot of clarity was required on status of foundation, tax treatment on considering Family Foundation as pass through entity, reporting requirements, accounting treatment, etc.