Abu Dhabi Global Market (ADGM), an international financial centre based in the UAE’ capital, has launched a new legal structure to support wealth management and preservation between family generations.
ADGM said its new ‘foundations’ regime provides a new platform for financial planning and structuring of investments that will serve as an alternative to trusts and corporate vehicles.
Foundations, like trusts, can be used for inter-generational wealth management of family assets, it said.
However, unlike trusts, they have their own legal personality and are similar to companies yet without individual shareholders.
The vehicles have been created in an effort to make ADGM a more attractive venue for the wealth management and private banking industries, a statement said.
ADGM said foundations would allow private and corporate entities in the UAE a local method for succession and tax planning without resorting to overseas investment vehicles.
They have been created in line with international standards and are immediately available for use, it said.
Dhaher Bin Dhaher Al Mheiri, CEO of ADGM’s Registration Authority, said that ADGM has been working closely with experts to develop a foundations regime that addresses the unique requirements of families and asset owners in Abu Dhabi.
Foundations would be an important wealth structuring and management tool where the local system of law is not always compatible with common law trusts, said James Barber-Lomax, a director of PraxisFM, a financial services firm with $42 billion of clients’ assets under management.
Over the past 15 years, a number of common law jurisdictions around the world have introduced laws enabling the creation of foundations, said Filippo Noseda, a partner at law firm Mishcon De Reya.
However, never before has a foundations regime, such as ADGM, been introduced in the rich cultural context of the Middle East, Reya said.