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December 03, 2025
The endowment in
the UAE has become an advanced and strategically important instrument for the
maintenance of wealth, the direction of long-term income, and the support of
social, family, and philanthropic objectives. The idea of endowment, although
having an historical and cultural connection, has been presented in a modern
way through which Islamic law, present-day governance, and regulatory clarity
have been combined. This makes the jurisdiction one of the region's most advanced
in terms of endowment creation and management.
While the country
has been establishing itself as a global hub for philanthropy, family business
continuity, and structured wealth management, the legal landscape for endowment
has made it possible for individuals and organizations to embrace the endowment
structures for the sustainable and purpose-driven results by granting them
flexibility and power.
An endowment[L1] is a long-term allocation of assets, income or rights for a specific purpose that may be permanent in many cases. The UAE permits the establishment of an endowment that can be used for charitable purposes, family wellbeing, education, community development, religious and cultural institutions, or even more than one of these objectives at once. Unlike property transfers, endowed assets are placed into a structure that is legally safeguarded where the preservation of the capital is done along with the use of the income or benefits generated from those assets in a manner that is strictly in accordance with the Settlor’s documented intentions.
A regular endowment consists of four essential elements:
The UAE
recognises various forms of endowments, including private, family, charitable,
corporate, and institutional endowments, each serving distinct strategic
purposes.
The UAE has laid
out a very transparent and organized legal structure that regulates endowments.
The legal structure details the conditions, rights, and duties that come along
with the creation, registration, and management of endowments, which are in
turn facilitated by emirate-level laws and control organizations such as the
General Authority of Islamic Affairs, Endowments and Zakat (GAIAE) and AWQAF
Dubai.
The major legal
framework is Federal
Decree-Law No. 5 of 2018 on Waqf (Endowments)[L2] ,
popularly known as the UAE Endowment Law, which sets the basic rules along with
the conditions and legal consequences for the creation of an endowment. This
national regulatory framework is supplemented by emirate-level regulations
particularly in Dubai through Law No. (14)
of 2017 Regulating Endowments and Gifts in the Emirate of Dubai[L3]
and the supervision of such authorities as the General Authority of Islamic Affairs,
Endowment & Zakat (GAIAE) [L4] and the Endowment and
Minors' Trust Foundation[L5]
(AWQAF DUBAI). Together, these instruments provide a unified yet flexible
regulatory structure.
The legal
structure guarantees that the endowed properties enjoy legal protection and are
protected against any exploitation, inequity, or unlawful sale, disposal except
strictly in accordance with the Settlor’s documented intention. The UAE
Endowment Law highlights important points such as transparency, official documentation,
registration, trustee responsibility, and compliance with lawful,
community-based goals. Additionally, it lays down precise obligations for the
trustees, supervision mechanisms, and rules for the distribution and
administration of the endowment’s income.
This legal
framework, allows for the establishment of both private family and public
charity endowments, thus incorporating the traditional models and at the same
time, addressing the contemporary wealth-structuring needs. This diverse and
trustworthy environment provides the Settlor with the assurance that the
endowed assets, whether real estate, financial or future income streams, will
be afforded the same protection and will be used in the same manner as intended,
forever.
Article 6 of the
Federal Law No. (14) of 2017 has categorised endowments in the UAE into broad
types, which are as follows:
·
Charitable endowments are set up for the sake of the public and may finance education,
healthcare, community projects, humanitarian causes, social welfare programs,
and others that are responsible for the development of society. These
endowments are usually the main source of funding for these long-term
philanthropy activities.
·
Family endowments (or private endowments) are set up for the benefit of family
members through all generations. They take care of financial stability, planned
income distribution and property continuity without splitting or breaking up
core assets. This model is generally adopted for estate planning, succession organisation,
and long-term wealth preservation in the UAE.
·
Joint endowments are a blend of family and charitable goals. A certain percentage of
the income is given to family beneficiaries, and another part is reserved for
the public or philanthropic causes. This method enables families to manage the
dual aspects of responsible society and their own continuity.
The UAE also
acknowledges the practice of companies, foundations, and other organisations
establishing endowed funds for the purposes of supporting innovation, research,
CSR initiatives, or long-term sustainability goals through institutional and
corporate endowments.
The UAE employs
a wide-ranging and modern interpretation of what may constitute the endowed
property under the Federal Decree-Law No. 5 of 2018. Article 7 specifically
allows the endowment of “real estate, sukuk, stocks, shares, securities,
trade names, intellectual property rights, and any other property valid for use”,
as long as the Settlor has legal title or the power to transfer the property. It
also provides that the endowed property must be legally usable, capable of
continuously generating benefit, non-perishable, and free from mortgage,
foreclosure, or administrative seizure. In the case of jointly owned
properties, the Article 7 requires that the property be divisible. In the event
that division is not possible, the consent of co-owners or intervention of the
competent authority is needed. The Law also states that the real estate
allocated for mosques, cemeteries, or other similar community services must be
endowed on a permanent basis.
At the emirate
level, Law No. 14 of 2017 clarifies further through Article 2, which defines
endowed property as including “movable and immovable assets, shares, stocks,
bonds, securities, usufruct rights, tenancy rights, and other personal, real,
and moral rights”. By this definition, the scope has been expanded to cover
both the tangible and intangible property. According to Article 12, endowed
property must be non-consumable, legally usable, owned by the donor or under
the legal authority of the donor, and free of any third-party rights.
Together, these
federal and emirate-level regulations create a comprehensive and adaptable
regime that protects endowed assets and accommodates both traditional property
and modern financial structures.
Federal
Decree-Law No. 5 of 2018 lays down the fundamental legal prerequisites for
setting up, documenting, and registering an endowment. The law specifies that
the Settlor must possess complete legal capacity and lawful ownership or
disposal rights over the property to be endowed, thus ensuring that the asset
is not subject to any prohibitions, encumbrances or restrictions that would prevent
its dedication. The endowment's goal must be explicitly defined, lawful, and
must be of benefit to society, and the property to be endowed must be able to
provide a constant or recurring benefit without being perishable in nature, as
mentioned in Article 7. Moreover, the endowment will identify the
beneficiaries, prescribe the mode of benefit sharing, and lay down the
administrative structure for the asset.
Law No. 14 of
2017 not only deals with the federal requirements of donations but also makes
it obligatory for the donor to make a very clear and intentional declaration
for the purpose of the endowment, which could be through a written instrument,
a notarised document, or a form approved by the competent authority. The law also
requires that the endowed property must be identifiable, legally usable, and
unencumbered; additionally, the donor or their legal representative must
execute the endowment in accordance with the procedures laid down by the Dubai
Awqaf and Minors Affairs Foundation. Both federal and Dubai regulations stress
the importance of proper registration, documentation, and oversight in order to
make the endowment enforceable and to safeguard it for a long time.
An endowment
after its establishment becomes a legal entity separated from others and
protected with its administration determined through a trustee or a nominated
manager as per Federal Decree-Law No. 5 of 2018 and applicable emirate
regulations. The trustee is required to manage the property given for a
specific purpose with care and honesty, safeguard the property, distribute the
income or benefits to the designated beneficiaries, and ensure compliance to
the endowment deed and laws.
The Settlor is
allowed to specify explicit conditions on the management of the endowment, the
trustees' succession or replacement, and usage of the endowment’s funds.
However, after the endowment comes into effect, the Settlor's power to amend or
revoke its provisions is limited significantly. The beneficiaries are entitled
to receive the income, benefits, or services that are defined in the deed, but
they do not have any ownership rights to the assets that are the foundation of
the trust. This separation of ownership from benefit ensures continuity, asset protection,
and the sustainable fulfilment of the endowment’s purpose over time.
The tax regime in
UAE makes the creation of an endowment even more attractive as distributions to
beneficiaries are exempt from personal income tax. The tax benefits under the
Corporate Tax Law (Federal Decree-Law No. 47 of 2022) may be available to the
endowed property, depending on the endowment's legal form and classification,
especially if the endowment is considered as a “Qualifying Public Benefit
Entity”. Moreover, waqf properties can be free of certain fees or charges if
they are registered with the local waqf authorities following the applicable
regulations. Regulatory compliance mostly revolves around good governance,
management of the endowed assets in a responsible and prudent way, transparent
and correct records, and strict adherence to the objectives and conditions set
out in the endowment deed and the applicable laws.
Endowment in the
UAE combines legal certainty, asset protection, social involvement, and
continuity of the legacy in an efficient way. As a mature and extremely
flexible structure, it caters to the various needs of families, donors,
institutions, and businesses looking for a systematic and lasting way of
managing their wealth. With the ongoing legal framework, institutional backing,
and the state’s governance, setting up an endowment is a safe and influential
long-term decision for the ones committed to shaping a legacy.
Water &
Shark assists individuals, families, businesses, and institutions in
establishing Endowment structures in the UAE with precision, compliance, and
long-term vision. Our services include drafting bespoke endowment deeds,
advising on asset structuring and transfers, ensuring regulatory and legal
compliance, appointing, or advising on trusteeship, and providing ongoing
governance and reporting support. Our multidisciplinary expertise ensures that
every endowment is not only legally sound but strategically aligned with
long-term family, business, or philanthropic goals.
1. What is an endowment in the UAE?
An endowment is a long-term allocation of assets or income for a
specific purpose, such as family support, charity, or social causes, with legal
protection.
2. Who can establish an endowment?
Individuals,
families, businesses, or institutions with legal ownership of the assets and capacity to transfer them can create
an endowment.
3. What types of endowments exist in the UAE?
4. What assets can be endowed?
Movable and immovable property,
shares, stocks, sukuk, intellectual property, and any legally usable asset capable of generating
benefits.
5. What are the compliance requirements?
