As the world begins to move into a somewhat post-COVID-19 era, many families and businesses are viewing asset protection and its preservation a priority. The desire is to now consolidate assets by moving to restructuring and realigning their business interests and any new opportunities, domestically.
Ras Al Khaimah International Corporate Centre (RAK ICC) has announced the launch of its Foundation regime earlier this year. These regulations allow the registration of a Foundation, that would be established by a Founder, donating assets towards specified charitable or non-charitable purposes.
The Foundation regime seems appealing to those clients who may not feel comfortable with the idea of a Trust or limitations on holding assets in certain jurisdictions by a Trust.
The regime ensures continuity of the foundation post the life of the Founder/s, hence making intergenerational planning of assets and legacy planning easier for many families and businesses alike.
The RAK ICC Foundation Regime is the result of global benchmarking, ensuring they meet the appropriate international standards and market requirements. The constitutional documents encompass the Foundation charter and its By-laws.
A Foundation essentially has a separate legal personality, distinct from the Founder. It allows the Foundation to enter contracts and/or hold assets in its own name. The Founder would have no further rights over the property in the foundation but can reserve a right to maintain considerable power within the By-laws, including the power to appoint and remove the Council or Guardian.
The concept of a Foundation is derived from civil law principles, whereas the notion of a Trust or a company is clearly classified within common law; a Foundations’ fundamental structure shares similar traits with both.
The foundation as it is, is an orphan, without any shareholders, but may have a board, an assembly and voting members.
This article does not constitute legal, tax or professional advice. Governing Law – The RAKICC Foundations Regime 2019
Author: Seema Aziz, Strategy & Business Development Director, Creation Business Consultants