ADGM to launch wealth-management foundations

Abu Dhabi, 10 April 2016: Opportunities for investment and leasing on Al Maryah Island, Abu Dhabi’s business and lifestyle destination, will be center stage for Mubadala at this year’s Cityscape Abu Dhabi. Mubadala, which is helping drive the growth of Abu Dhabi’s retail, healthcare, finance and hospitality sectors through its development of Al Maryah Island, will also showcase new additions including the Four Seasons Hotel Abu Dhabi at Al Maryah Island (which launches in May) and outline the latest progress in the delivery of further infrastructure. Courtesy MubadalaShow less

Abu Dhabi Global Market (ADGM) has announced plans to introduce the UAE’s first legal structure for foundations, providing a complement and ­alternative to trusts for those looking to manage wealth and safeguard assets.

The financial free zone said that the new foundation regulations, when implemented, will be available to individuals, families and organisations in Abu Dhabi and abroad who are looking to efficiently manage their private wealth, safeguard their assets and enhance their succession planning.

“ADGM has identified strong market demand for foundation structures in the Mena region,” the free zone said in a consultation paper launched yesterday.

“Our existing focus on wealth management and asset management make ADGM an ideal location for both new and existing foundations worldwide.”

A foundation is a corporate body with features and uses similar to a company but with similar features to a common law trust. A foundation is an incorporated entity with a separate legal personality but one that, unlike a company, does not have shareholders.

It typically holds assets in its own name on behalf of beneficiaries or for particular purposes, or both, and operates in accordance with a constitution.

Unlike a company, a foundation cannot carry out commercial activities, other than those necessary, ancillary or incidental to its purposes.

ADGM’s draft foundations regime, available on the freezone’s website, is largely modelled on foundations regimes in Guernsey and Jersey, following a benchmarking exercise against similar regulations in jurisdictions including Liechtenstein, Austria and Seychelles.

Included in the draft regime are controls to protect the confidentiality of the foundation’s arrangements, safeguard the founder’s ability to exercise control over a foundation, and facilitate migrations from other jurisdictions to ADGM and vice versa.

Interested parties have until July 5 to submit comments on the draft document, available via the ADGM website.

“Foundations are an excellent way for individuals, families and organisations to engage in wealth protection, enhancement and transfer,” said Sam Instone, the chief executive of AES International in Dubai. “Given so much regional wealth has been created in the last few decades this is a critical area of planning to get right and this regime looks ideally placed to facilitate this increasingly important area of inter-generational wealth management.”

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