In the UAE, three main tools are used for asset protection and succession planning: SPV, Family Foundation and Trust. They differ in the level of control, cost, management flexibility and succession-planning capabilities. Here is how they work and how to choose between them.

The three tools in plain terms

An SPV (Special Purpose Vehicle) is a separate “wrapper” company that holds a specific asset, most often real estate or a business stake. It isolates the asset and simplifies transactions, but on its own it does not solve succession.

A Family Foundation is a standalone legal entity with no shareholders that owns assets for the benefit of appointed beneficiaries (e.g. children). It is well understood by banks, can replace a will, and lets the founder retain a high level of control through a Council and its charter.

A Trust is a legal arrangement in which a Trustee manages assets for beneficiaries under the rules of a trust deed. It is flexible for complex international structures but requires a licensed trustee and more careful control design.

How to choose: the key factors

The choice depends on four factors: how much control you want to keep, how complex your family situation is, whether you hold international assets, and your goal — simply to own, or to build a succession plan. In practice, a Family Foundation is the most convenient and straightforward option in most cases: it is a legal entity, banks accept it, management is simpler and reputational risks are lower.

A trust is usually not required if:

  • assets are below USD 1 million;
  • there is a single owner and no complex family structure;
  • there are no minor children;
  • there are no international assets;
  • the objective is simply to own property;
  • you wish to retain full operational control.

If, however, your wealth spans several countries, involves minor children or a phased transfer of assets, a foundation or trust is worth considering — with real estate inside the structure typically held through an SPV.

Why jurisdiction matters: DIFC and ADGM

The most suitable jurisdictions for private wealth structuring in the UAE are DIFC (Dubai International Financial Centre) and ADGM (Abu Dhabi Global Market). They operate under English common law, have their own independent court systems and are recognised by UAE courts. For asset protection and succession this is decisive: clear case law and predictable rules make the structure resilient to challenge and easy for international banks to understand.

FAQ:

Will I lose control over my assets?

This is the main concern for most founders — and the mechanics matter. Control is retained when the structure is properly designed. In a foundation the level of control is usually higher than in a trust: the founder can sit on the Council or appoint a Protector / Guardian. This is governed by governance — a system of rules and agreements defining who makes decisions and how, which decisions require the founder’s approval, and how the founder’s interests are protected. In a trust, for example, you can specify that the trustee may not invest assets or sell property without the founder’s consent.

What happens in case of divorce, dispute or an unexpected event

With a properly designed structure, assets do not form part of personal ownership, so they are harder to challenge in a dispute or divorce. If something happens to the founder, assets are not frozen, there are no lengthy court proceedings, and the family gains access according to pre-defined rules. This predictability is precisely why the structure is built: it turns a potentially chaotic scenario into a managed process.

Taxes and confidentiality

The UAE applies 0% personal income tax. The overall tax picture still depends on the source of income, the tax residency of beneficiaries and the chosen structure (SPV / foundation / trust), so individual tax structuring is always carried out. Confidentiality is high: public registers are limited, beneficiaries are not always disclosed, and access to information is restricted to banks and regulators.

Where to start

The starting point is not choosing a tool but an audit: what assets you hold, in which countries, your family situation and your goal. What fits — an SPV, a foundation, a trust or a combination — follows from that. Setting up a foundation or trust through licensed and reputable advisers ensures full legal compliance, asset protection and adherence to all regulatory requirements.

Ready to move from theory to a concrete solution for your situation? See how we build these structures: Asset Protection & Family Wealth Structuring in the UAE.

Disclaimer: this article is for information only and is not tax or legal advice. All services are provided as private advisory and assistance.