16 August 2017, Abu Dhabi, UAE : Abu Dhabi Global Market (ADGM), the International Financial Centre in Abu Dhabi, is pleased to launch the first of its kind Foundations regime in support of more effective structures for wealth preservation and wealth management. The ADGM Foundations regime provides a strategic platform for financial planning and structuring, serving as an alternative to trusts and corporate vehicles.
First of such legal structure and regime to be available in the UAE
For the first time in the UAE, the local, private and corporate community can now efficiently and locally deploy these structures for a variety of services, including family succession planning, tax planning, asset protection, wealth management and corporate structuring, without relying on foreign regimes and practices. The regime and offerings are operational with immediate effect today.
A strategic global solution that supports multi-generational wealth management and preservation
Foundations, like trusts, are utilized for a variety of purposes including wealth management, planning and preservation and are a suitable vehicle for wealth management across generations. Unlike trusts, however, Foundations are incorporated as a legal entity with their own distinct attributes and legal personality. In this respect, foundations are similar to companies but without shareholders. Private Banks have positively endorsed to the opportunity to use Foundations in ADGM as a core component of their structuring for clients without having to continue to rely on vehicles from outside the region.
ADGM’s Foundations regime supplements its existing suite of products and services available to families. To date, the ADGM platform has been widely used by local families for structuring business interests, holding companies and Special Purpose Vehicles for holding a wide range of assets, as well as setting up family offices. ADGM is also an attractive setting for an ever growing community of highly regarded professional advisory firms and extensive experts in family wealth management. ADGM will continue to evolve its offering to support local and international families and High-Net-Worth-Individuals to efficiently manage their business and investment interests for several generations to come. Global clients with interests in Abu Dhabi and the region can also utilise the ADGM Foundations regime and ADGM’s offering as an IFC to efficiently address their assets and wealth management needs.
Addressing the urgent and exacting needs of the local and global community
“ADGM has been working closely with local and international stakeholders and market panel of experts to understand their needs and develop a Foundations regime that addresses the unique requirements of families and asset owners in Abu Dhabi, regionally and globally. The new foundations regime, together with the existing world-class legislative and regulatory framework, adds to ADGM’s extensive corporate and legal structure offerings. This is part of ADGM’s ongoing commitment to enhance its ecosystem and serve the needs of its stakeholders by introducing innovative and efficient business solutions,” said Mr Dhaher Bin Dhaher Al Mheiri, Chief Executive Officer, Registration Authority of ADGM.
A trusted regime that caters to client confidentiality and maintains transparency
The newly enacted Foundations Regulations follow international best practice and ensure an appropriate balance between preserving client confidentiality and maintaining high standards of transparency under the ADGM’s internationally recognised legislative environment.
ADGM provides a well-supported ecosystem of international advisory firms and related services
As an IFC, ADGM is well anchored by its internationally-aligned rules and regulations and supported by a robust community of leading international financial institutions and professional advisors. Local and foreign entities, who seek to establish their foundations and businesses at ADGM, will also benefit from the ease-of-doing-business environment and efficient set-up and registration process via the ADGM Registration Authority.
Mr James Barber-Lomax, Director, PraxisIFM, said: “PraxisIFM believes the introduction of ADGM’s Foundation regime to be an extremely important and welcome addition to the first class framework offered in ADGM. The Regulations are modelled utilising internationally respected aspects from traditional Financial Centres but with the introduction of some innovative new features. These result in an extremely stable but yet versatile system supported by modern day technology systems that cater for the needs of the local, and international community.
Foundations are an important wealth structuring and management tool where the local system of law is not always compatible with common law trusts. By offering Trust Laws and Foundations Regulations, ADGM enables individuals, families and businesses to utilise a local framework to structure their Middle Eastern and global affairs in a highly reputable jurisdiction supported by world class corporate service providers, regulations and supervisory teams. This is the first time that Foundation Regulations have been settled in the region, proving once again that ADGM is the preeminent International Financial Centre in this region.”
Mr Jonathan Ivinson, Partner, Akin Gump, said: “It has been an honour for Akin Gump to be involved in the development of this exciting addition to ADGM’s product offerings. This Foundation law combines a robust governance and compliance regime with a high degree of operational autonomy to the founder and additionally offers access to the double tax treaty network of the United Arab Emirates. For these reasons we expect it to be a compelling alternative to the common law trust and a market leader among jurisdictions that offer foundations.”
Mr Filippo Noseda, Partner, Mishcon De Reya, added: “The introduction of a foundations regime in Abu Dhabi represents a first. Over the past 15 years, a number of common law jurisdictions around the world have introduced laws enabling the creation of foundations. However, never before has a foundations regime, such as ADGM, been introduced in the rich cultural context of the Middle East. It is expected that the new ADGM Foundation Regulations will appeal to international clients with interests in the region, as well as local families who wish to find a suitable vehicle to deal with family succession and family governance with the help of local practitioners."
Mr Miguel de Almeida, Partner, Gavea North Limited, said: “As a Wealth Strategy Consulting Firm, specialising in the design, implementation and management of solutions for High Net Worth Families across the globe, Gávea North believes that the new Foundations Regime allows families to have access to an exceptional legal structure in one of the world’s most safe and recognised jurisdictions, with the potential to be the cornerstone in ADGM’s family wealth platform and, in that regard, firmly placing Abu Dhabi on the international map.”
Strategically located in the U.A.E. capital, Abu Dhabi, the ADGM foundations regime has factored in the current considerations and future needs of market users. Its features include:
- Creating a new type of legal structure with its own distinct attributes;
- Protecting the confidentiality of the foundation’s arrangements;
- Incorporating appropriate protection mechanisms for ADGM foundations;
- Safeguarding the founder’s ability to exercise control over a foundation; and
- Facilitating migrations from other jurisdictions to ADGM and vice versa.
For more details of the new Foundations regime, please click here.