20 September 2026
Wealthy families are no longer moving to the UAE on their own. They are bringing their holding companies, investment vehicles and family governance with them, and the practical trigger is tax certainty. On 5 June 2026 the Federal Tax Authority published the second version of its Corporate Tax Guide on the Taxation of Family Foundations, CTGFF1, which rewrote the sections on multi-tier structures, transfers into a foundation, juridical persons acquired or sold, and family offices. The underlying regime sits in Article 17 of the Corporate Tax Law: a qualifying family foundation may be treated as a fiscally transparent Unincorporated Partnership, so the vehicle itself is not subject to Corporate Tax and income is attributed to the beneficiaries.
From a place to live to a place to hold assets
Khaleej Times reported on 20 September 2026 that the UAE is cementing its position as one of the world’s leading destinations for family wealth preservation and succession planning. Ashish Agrawal, Partner at Dhruva, a Ryan LLC affiliate, described the shift in blunt terms: five to ten years ago many families treated the UAE primarily as a base for living and doing business, while their wealth-holding structures often sat elsewhere. Families relocating today are not only moving their residence, they are bringing holding structures, investment vehicles and governance with them.
Agrawal expects the Federal Tax Authority guidance issued in June 2026 to accelerate the shift to formal succession structures, pointing to the new clarity around multi-tier ownership, co-investment arrangements and asset transfers. That matters because a family that holds assets across several jurisdictions cannot build a succession plan on a structure whose tax treatment is uncertain.
The legal base under the trend
Three separate building blocks sit under this migration of family capital, and they were put in place years apart.
The first is the foundation regimes in the two financial centres. The DIFC operates under the Foundations Law, DIFC Law No. 3 of 2018, and the ADGM under the Foundations Regulations 2017. A foundation is neither a company nor a trust: it holds assets in its own name, has no shareholders, and is run by a council under a charter and by-laws.
The second is federal legislation on family businesses. Federal Decree-Law No. 37 of 2022 concerning Family Companies was issued at the Presidency Palace in Abu Dhabi on 3 October 2022 and came into force three months after the day following its publication in the Official Gazette. It gives a family company a dedicated legal frame: a charter that can be filed with the register, rules on transfers of shares to non-family members, and the right of the company to purchase not more than 30 per cent of its own shares in defined cases such as a capital reduction or the buy-out of a departing, bankrupt or insolvent partner.
The third is the register itself. The unified register of family businesses was established by Cabinet Decision No. 109 of 2023, and the Ministry of Economy began accepting registration applications on 22 May 2024.
What the FTA guide changed in June 2026
The first version of CTGFF1 appeared in May 2025. The June 2026 version updates the sections on legislative references, trusts, similar entities, multi-tier structures, transfers to a family foundation, juridical persons acquired or sold by a family foundation, and family offices. The practical content is below.
| Question | What the guide now says |
|---|---|
| Can an LLC be a family foundation? | No. An LLC is not a similar entity to a foundation or trust and cannot apply for fiscally transparent treatment in its own right. |
| Can an LLC or SPV under a foundation be transparent? | Yes. A juridical person wholly owned and controlled by a family foundation, including an LLC or an SPV, may apply, provided it meets the Article 17(1) conditions. |
| How are multi-tier chains tested? | Entity by entity. Ownership and control must run through an uninterrupted chain of entities that are themselves fiscally transparent. |
| What breaks the chain? | Any opaque entity. Every juridical person it holds below also loses eligibility for transparent treatment. |
| Must the entities share a financial year? | No. There is no requirement for entities in the chain to have the same financial year. |
| How are transfers into a foundation treated? | Transfers from a Related Party must meet the arm’s length standard, and the resulting gain or loss may be subject to Corporate Tax. |
| What if the transferor is an individual? | Personal Investments and Real Estate Investments transferred by a natural person are not subject to Corporate Tax. |
| Does base cost change on entry or exit? | No. There is no adjustment to the base cost of assets when a juridical person enters or leaves the structure. |
| Are family offices transparent? | Normally no. A single or multi family office is unlikely to meet the no business activity condition and is taxable on all income, including management fees. |
The family office point deserves a second line, because it is where many structures are mispriced. A single or multi family office is a Resident Person and pays Corporate Tax on management fees and any other income, and it must be remunerated at arm’s length for services rendered to Related Parties and Connected Persons. Where that office is a Free Zone Person it may still reach the 0 per cent rate on Qualifying Income from Qualifying Activities such as wealth and investment management or fund management, but only where those services sit under the regulatory oversight of a Competent Authority: the UAE Central Bank, the DFSA in the DIFC or the FSRA in the ADGM. A licence alone, without that oversight, does not qualify.
The compliance calendar
Transparency is not granted once and forgotten. The guide sets out a fixed sequence of filings.
- Register every juridical person in the structure for Corporate Tax separately, before it applies to be treated as fiscally transparent.
- File the application with the FTA before the end of the relevant Tax Period, either for the Tax Period in which it is submitted or for the following one.
- File an annual confirmation within 9 months from the end of the relevant Tax Period, under FTA Decision No. 5 of 2025.
- In a multi-tier structure, one confirmation may be filed by the foundation for itself and for the entities it wholly owns and controls, or each entity may file separately.
- Where beneficiaries include a public benefit entity, either that entity derives no taxable income, or the income is distributed to it within 6 months from the end of the Tax Period.
- A natural person beneficiary registers for Corporate Tax only if they run a separate business in the UAE with turnover above AED 1 million in a Gregorian calendar year.
The penalty for drift is structural rather than monetary. If a foundation stops meeting the Article 17(1) conditions, it loses transparent status from the beginning of the Tax Period in which the failure occurred, and every entity it holds below loses it as well.
Where families get this wrong
Agrawal named the two recurring mistakes. The first is treating succession as an event rather than a process, so planning is deferred until circumstances force it. The second is transferring ownership without transferring capability, which leaves heirs holding assets they were never prepared to run. A third pattern is building a structure around tax considerations rather than the family’s actual objectives.
Governance is now the practical answer, and not only for family reasons. A family foundation has to be able to demonstrate its purpose, its beneficiaries and its activities, and to confirm annually that the qualifying conditions still hold. Good governance has therefore become the evidence base that supports the family’s tax and legal position.
How Atlant Capital can help
Most of the work a family faces here is corporate rather than philosophical: the holding company, the SPV layer, the licence, the bank account, the residence visas for the people who will run the structure. We handle that part. Our company setup service covers incorporation in the mainland and in the free zones, including the financial centres, and we open the operating accounts through our bank account opening service. If you are still choosing the jurisdiction layer, our guide on mainland versus free zone companies in the UAE sets out the trade-offs, and our earlier article on the DIFC Prescribed Company regime explains how the SPV layer under a foundation is normally built.
Bottom line
The news here is not that families like the UAE. It is that the tax treatment of the vehicles they use has been written down in enough detail to plan around. Multi-tier chains, jointly held SPVs, transfers into a foundation and the status of the family office all now have an official answer, and the filing sequence that keeps transparency alive is fixed: registration first, application before the end of the Tax Period, annual confirmation within 9 months. Families that were waiting for certainty before formalising succession no longer have a reason to wait.
Source: Khaleej Times.
FAQ
What is a family foundation under UAE Corporate Tax?
It is a foundation, trust or similar entity used to administer family wealth that meets the conditions of Article 17(1) of the Corporate Tax Law. If the FTA approves its application, it is treated as a fiscally transparent Unincorporated Partnership, so the foundation itself is not taxed and income, expenditure, assets and liabilities are attributed to the beneficiaries.
Can a UAE LLC be treated as a family foundation?
No. The June 2026 CTGFF1 guide states that an LLC is not a similar entity to a foundation or trust and cannot apply for fiscally transparent treatment on its own. An LLC or SPV can still be transparent if it is wholly owned and controlled by a family foundation through an uninterrupted chain of transparent entities and meets the Article 17(1) conditions.
When must the application to the FTA be filed?
Before the end of the relevant Tax Period. The application may cover the Tax Period during which it is submitted or the next one. Each juridical person in a multi-tier structure must first hold a Tax Registration Number, and the annual confirmation is then due within 9 months from the end of each Tax Period under FTA Decision No. 5 of 2025.
Are single and multi family offices tax transparent in the UAE?
Generally not. Because of their activity, a single or multi family office is unlikely to meet the condition that no business activity is conducted, so it is taxable on all income including management fees and must charge Related Parties at arm’s length. A free zone family office may reach 0 per cent on Qualifying Income only where its services are under the oversight of a Competent Authority such as the UAE Central Bank, the DFSA or the FSRA.
