- within Environment, Consumer Protection and Energy and Natural Resources topic(s)
- in United Arab Emirates
On 19 September 2025, the FTA issued Public Clarification No. CTP008 addressing the corporate tax treatment of family wealth management structures.
This clarification confirms that a foundation may hold an operating entity (such as a Single Family Office or Multi-Family Office) and still benefit from tax transparent treatment, a question that has long been debated. This provides greater certainty and much-needed flexibility for family wealth and succession planning in the UAE.
The FTA also clarified that LLCs are excluded from the definition of a "Similar Entity" to a trust or foundation. Accordingly, LLCs may only obtain the family foundation status where they are wholly owned by a family foundation and meet the requirements of Article 17 of the UAE Corporate Tax Law.
Recap of key principles for family wealth structures under UAE Corporate Tax:
- Entities without separate legal personality (e.g., unincorporated trusts) are automatically tax transparent.
- Foundations may apply for tax transparent status with the FTA if specific conditions are met.
- Free zone foundations that are not family foundations may still benefit from the 0% rate on qualifying income (subject to QFZP rules).
- Holding vehicles / SPVs wholly owned by a tax-transparent family foundation may themselves apply for transparency, even across multiple layers.
- Family members are not subject to corporate tax on personal investment or real estate income.
This development is a win for family offices and private clients in the UAE, solidifying the jurisdiction's position as a leading hub for wealth management and succession planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
