RAK ICC Foundations are a sophisticated and flexible tool for wealth management, succession planning, and asset protection, making them an attractive choice for individuals and businesses. As a licensed entity under the Ras Al Khaimah International Corporate Centre (RAK ICC), these foundations offer numerous advantages to founders, beneficiaries, and investors alike.
At WellTax, we specialise in helping clients understand and establish RAK ICC Foundations to meet their unique needs. In this article, we explore the many applications of RAK ICC Foundations and how they can enhance your financial planning strategies. For more details about RAK ICC, you can also read our previous article about RAK ICC: Seven Key Insights for Offshore Company Formation.
Understanding RAK ICC Foundations
RAK ICC Foundations are legal entities governed by the RAK ICC Foundations Regulations 2019. They are created to safeguard and administer assets for a specific purpose, all while being independent of the founder’s personal liabilities. This separation ensures robust asset protection and enhances flexibility in managing complex financial arrangements.
A foundation operates based on two primary documents: its charter and by-laws. These documents define the foundation’s objectives, governance structure, and the rules for managing its assets and beneficiaries. The foundation’s council oversees its operations, while guardians (if appointed) provide additional oversight, ensuring the founder’s intentions are respected.
WellTax assists clients in drafting comprehensive charters and by-laws to ensure that their foundations meet all regulatory requirements while aligning with personal or corporate goals.
Five Key Applications of RAK ICC Foundations
1. Asset Protection
RAK ICC Foundations offer unparalleled security for safeguarding assets against legal claims, creditors, or unforeseen liabilities. By transferring assets into a foundation, the founder legally separates them from personal ownership, creating a protective shield.
For example, if you own significant investments or properties, a foundation ensures these assets remain secure even during legal disputes. WellTax ensures the seamless setup of your foundation to protect your wealth in accordance with UAE regulations.
2. Succession Planning
Effective succession planning ensures the smooth transfer of wealth across generations. RAK ICC Foundations allow founders to outline how assets should be distributed to beneficiaries, minimising conflicts and legal hurdles.
By defining clear rules in the by-laws, you can ensure that family businesses or personal estates are passed on in line with your wishes. At WellTax, we help clients customise their foundations for long-term sustainability, ensuring their legacy is preserved.
3. Corporate Structuring
RAK ICC Foundations are ideal for holding shares in companies or managing multi-jurisdictional business structures. They simplify governance by consolidating ownership under a single entity, thereby reducing administrative complexity.
For businesses with global operations, foundations provide a neutral platform for managing cross-border activities. WellTax offers expert advice on structuring your foundation to align with international compliance standards and maximise operational efficiency.
4. Philanthropy
RAK ICC Foundations are versatile tools for pursuing philanthropic goals. Whether funding educational initiatives, supporting healthcare programmes, or engaging in community development, a foundation offers a structured and transparent way to manage charitable activities.
Founders can define specific objectives and ensure that funds are utilised as intended. At WellTax, we guide clients in establishing philanthropic foundations to create lasting societal impact.
5. Wealth Consolidation
Managing diverse assets can be complex and time-consuming. RAK ICC Foundations simplify this process by consolidating real estate, investments, intellectual property, and other assets under a single entity. This centralised approach streamlines management and enhances operational efficiency.
Whether you’re an individual investor or a business owner, WellTax can help you establish a foundation to consolidate and manage your assets effectively.
Advantages of RAK ICC Foundations
RAK ICC Foundations provide numerous benefits, including:
- Tax Efficiency: Foundations benefit from the UAE’s tax-friendly regime. Read our previous article on Corporate Tax Planning in the UAE.
- Privacy: Foundation details remain confidential, offering founders a high degree of privacy.
- Flexibility: Customisable governance structures ensure that foundations meet specific objectives.
- Cost-Effectiveness: Establishing and maintaining a foundation is affordable compared to similar structures in other jurisdictions.
- Global Credibility: RAK ICC’s adherence to international standards enhances trust and confidence among investors and beneficiaries.
Setting Up a RAK ICC Foundation with WellTax
Establishing a RAK ICC Foundation involves several steps, and partnering with a trusted adviser like WellTax can simplify the process. Here’s an overview:
- Determine the Founder and Objectives: Decide whether the founder will be an individual or a corporate entity and define the foundation’s purpose.
- Draft the Charter and By-Laws: Create the foundation’s governing documents, outlining its objectives, governance structure, and rules for asset management.
- Appoint Council Members and Guardians: Select trusted individuals or professional advisers to oversee the foundation’s operations.
- Register the Foundation: Submit the required documents to the RAK ICC Registrar through a registered agent like WellTax.
- Capital Contribution: Deposit a minimum of USD 100 as the foundation’s initial capital.
Our team at WellTax ensures that all legal and regulatory requirements are met, streamlining the registration process and providing ongoing support.
Governance and Oversight of RAK ICC Foundations
Effective governance is critical for the success of any foundation. RAK ICC Foundations operate through a council responsible for decision-making and compliance. Guardians, if appointed, provide an additional layer of oversight to ensure the foundation adheres to its by-laws.
Private by-laws enable founders to tailor governance structures to their unique needs, while confidential record-keeping ensures privacy and security. WellTax offers ongoing management services to help clients maintain compliance and achieve their objectives. For more details about UAE Corporate Tax Compliance, you can also read our previous article about Essential Record-Keeping Documents for UAE Corporate Tax Compliance.
Work with WellTax
RAK ICC Foundations are a versatile and powerful tool for managing wealth, protecting assets, and achieving long-term goals. Whether you’re an individual seeking to secure your family’s future or a business looking to streamline operations, these foundations provide a robust solution.
Contact WellTax today to learn how we can help you establish a foundation tailored to your needs.
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