A foundation's bylaws and foundation charter, which spell down the organization, assets, and purpose of the foundation, serve to establish it. A foundation has its own legal identity and is incorporated as a registered legal entity, as was already mentioned. However, it also possesses trust-like qualities in that it permits the division of legal and beneficial interests. There are no shareholders in it. A foundation enables the founder to maintain control over the organization.
It is crucial to remember that a trust deed outlines the terms and conditions of the trust and describes how the trustee is really to manage it. Furthermore, it explains the beneficiaries' rights and interests. The settlor may provide a document detailing their choices for the management and disposal of the trust's assets (this is not legally binding but considered by the trustee when making decisions).
Trust Law in the UAE
Unlike a foundation, which is an entity registered with the relevant agency, a trust is not a legal body and information about it is not available to the general public. The trustee will preserve the trust's assets for the sake of certain individuals or things (the beneficiaries). A trust structure is a formal arrangement which provides for such transfer of assets from one person (the settlor(s)) to another (the trustee).
In the United Arab Emirates, there are two regions which have trust laws: the Dubai International Financial Center (DIFC) and the Abu Dhabi Global Market (ADGM). In order to replace the Trust Law of 2005, the Dubai International Finance Centre (DIFC) passed its own Trust Law in 2018. The UAE Ministry of Finance released the trust law that defines the rights and obligations of the settlor, beneficiaries, and trusts in addition to regulating trust formation, purpose, and operation.
How we can help?
Freemont Group is equipped to provide a full service together with ancillary services. We can provide trustees as well as protectors as well administering the Trust on your behalf. Furthermore, we can provide all major ancilliary services such as accounting, bank account opening and administration, and sound advice on all issue that may come across in your path.
We are here to assist you in order to ensure your peace of mind and help you focus on your pressing business issues.
The UAE implemented the UAE 2020 Trust Law in 2021 to better conform to international norms, bringing an Anglo-American trust structure into the UAE's civil law system. This new law offers extra assurance to investors in the area that their assets will be legally secured with these types of arrangements in place, supporting the growth of the onshore wealth management industry.