RAK ICC Foundation Setup for Asset Protection
RAK ICC, established under Decree No.12 of 2015 and as amended by Decree No.4 of 2016, has corporate structures for international businesses, including offshore and onshore company formations and the RAK ICC Foundation. It has become a favoured jurisdiction for businesses seeking to establish or manage their assets in the UAE.
Why choose RAKICC for Business setup?
· Foreign ownership
· International business operations
· Dispute resolution for the business disputes
· Establish local and international bank accounts
· Operate a business without paying corporate tax
· Protection for the foreign investment
· Easy transfer of assets and properties across many nations
· Continuation or Transfer of Domiciliation
RAK ICC Foundations
The RAK International Corporate Centre (RAK ICC) has prominence as one of the government-backed corporate registry authorities where entrepreneurs can form Foundations in the UAE.
A RAK ICC Foundation can be established with at least one founder and one council member, who can be the same person. The founder can be an individual or a corporate entity, and the council members can be individuals or corporate entities. The council members are responsible for managing the foundation and fulfilling its purpose.
Uses of a RAK ICC Foundation
1. Charitable and philanthropic purposes: RAK ICC Foundations can be established for charitable and philanthropic purposes, making them an ideal option for businesses looking to give back to society.
2. Private family wealth management: RAK ICC Foundations can be established for private family wealth management, providing a high degree of asset protection and confidentiality.
3. Holding and managing assets: RAK ICC Foundations can be used for holding and managing assets, such as real estate or intellectual property, providing a high degree of asset protection and tax efficiency.
Benefits of a RAK ICC Foundation
Asset protection: A RAK ICC Foundation provides a high level of asset protection as it is a separate legal entity distinct from its founders and council members. The assets held by the foundation are protected from the personal liabilities of the founders and council members.
Tax efficiency: RAK ICC Foundations are not subject to corporate taxes, making them an attractive option for businesses looking to reduce their tax liabilities.
Flexibility: RAK ICC Foundations offer a high degree of flexibility regarding their structure and purpose. They can be established for various purposes, including charitable or philanthropic goals and private family wealth management.
Confidentiality: RAK ICC Foundations offer a high degree of privacy as the founder's, and council members' details are not publicly disclosed.
No requirement for physical presence: There is no requirement for a RAK ICC Foundation to have a physical establishment in the UAE, which makes it an ideal option for businesses looking to establish a presence in the region without incurring high establishment costs.
Legal Features for RAK ICC Foundations (2019):
· Governmental Authority
The Dubai International Financial Center courts or the Abu Dhabi Global Market are available as common law jurisdictions.
· Procedure of incorporation
The following criteria apply to the incorporation process:
1. Founder (Individual or Body Corporate).
2. Council people (Individual or Body Corporate).
3. An authorized agent.
4. A registered office in the UAE
A Foundation must designate a Guardian (Person or Body Corporate) per whether it has a charity object or a specific non-charitable object. Application Form then sent to the Registrar after being signed by the founder. The above information, the Charter, and the By-Laws must be included on the application form.
· Minimum Capital
One hundred dollars (or its equivalent in another currency) must be the minimum capital. A Contributor may later donate additional Property to the Foundation.
· Restrictive Mechanisms
In line with the terms of the By-Laws, a secretive document, the Council Members are responsible for managing the Foundation.
The Council must have at least two members, who may be the founder, family members, trusted advisors, or professional advisers (Individual or Body Corporate). If nominated, the Guardian oversees the Council Members and guarantees strict compliance with the Foundation's By-Laws.
· Informational Right
A Foundations Register, which must be kept up to date by the Registrar, must include each Foundation's essential information (Name and date of registration, details of the Founder, Council Members, and Registered Agent).
· Migration
Migration of a Foundation into or out of the RAK ICC is permitted under specific circumstances.
· Yearly accounts
The registered agent must keep the accounting records at the registered office. The accounting records are not made available to the public.
Conclusion
RAK ICC Foundations offer a unique and flexible legal structure that combines the benefits of a trust with those of a company. They provide a high degree of asset protection, tax efficiency, confidentiality, and flexibility, making them an attractive option for international businesses looking to establish in the UAE.
How can Ascent Partners help?
Ascent Partners is a boutique consultancy providing bespoke, end-to-end corporate services ranging from company formation to accounting, bookkeeping, and compliance services for entrepreneurs looking to set up their next venture in the UAE. We work alongside to strategise, startup, and scale businesses in the UAE and the broader region.
With a combined experience of 50+ years, our expert consultants provide reliable and unparalleled guidance throughout all strategic phases of a business' evolution.