When investors think about structuring their assets or investments in a jurisdiction like the UAE, the discussion immediately goes to full foreign ownership, taxation, succession planning, long-term residency, asset protection and asset consolidation. Many investors have historically preferred to use SPVs or offshore companies, and over time some of them realised that a UAE Foundations “pioneered by ADGM” and UAE Wills “pioneeded by DIFC” are more suitable solutions, structure and documents when it comes to asset protection, family governance, or planning for the next generation.
This article is not intended to compare the merits of Foundations against SPVs or LLCs, nor to argue which Wills is the best between DIFC Wills, ADJD Wills or the notary public ones, or whether one structure is superior because simply each case is diffirent and what fits someone may not fit someone else. It's a case by case basis solution or advice. The purpose is much more practical: to highlight the consequences of changing structures too early, too fast, or too casually, and to warn against doing so without a full and holistic understanding of the impact on assets, ownership, banking, and future transfers.
Before deciding on any structure, the investor needs to understand what they are trying to achieve and what exactly they are trying to protect. Every investment has its own risk and it’s own nature. A real estate portfolio is different from an operating business. A holding company is different from a trading company. A cross-jurisdiction investment is different from a ONLY local investment one. The investor’s nationality and place of residence, the nature of the asset, the purpose of the structure, and the tax exposure all matter and should be assessed together. All these elements are deeply connected and cannot be treated separately.
I have seen many examples where clients create a family structure and underneath it they mix operating entities, SPVs that hold real estate, free-zone companies that have commercial activities, and even foreign companies holding assets inside and outside the UAE directly and indirectly. All under one Foundation or one holding structure. The idea looks efficient, cost effective, elegant and organised, but what is missing is the combination of tax advice, legal advice, corporate advice, and financial governance. Many structures look neat on paper but become complicated, fragile, or expensive when you try to operate them, report them, or open or maintain bank accounts under them.
The UAE is entering a period where corporate governance, taxation and financial transparency are becoming more real and more relevant. We already have corporate tax. We already have automatic exchange of information between us and many other international jurisdictions. We already have more clarity on tax residency. Discussions about personal income taxation are no longer theoretical looking at other GCC members like Oman announcing personal income tax few weeks ago. What was acceptable or optimal twenty years ago is not necessarily optimal today. And not every structure that was fit for purpose in the past is automatically fit for purpose now.
Because of these new developments, advisors sometimes recommend changing the structure, adding layers, creating substance, or separating certain asset classes. There are moments where an SPV may no longer serve the same purpose without substance, or where a Foundation should not hold assets directly, or where commercial entities and investment companies need to be separated. These recommendations are legitimate, but the danger lies in how quickly some shareholders or beneficial owners act on them. They sometimes rush to strike off a company or liquidate a structure or allow a Foundation to lapse without first ensuring that all rights, contracts, bank accounts, and ownership positions are properly transferred and documented.
At that moment, the cost of advisory fees suddenly feels insignificant. Imagine a property held by an SPV with a Foundation above it, and both structures fall out of good standing. Who collects the rent? Who operates the bank account? Who has the authority to transfer that property or enforce the title? The cost of reviving or renewing an entity or paying for a coordinated advisory session suddenly becomes minor compared to the consequences of losing control over the asset or creating a legal and administrative dead end, or even just to pay the penalties imposed by the authorities for staying off the grid of compliance.
In my experience, the biggest challenge is knowlegde, and that structuring is not a one-discipline subject. Lawyers, tax advisors, accountants, bankers, and CSPs each see the structure from their own lens. The legal advisor worries about enforceability and governance. The tax advisor worries about reporting obligations and exposure. The accountant worries about documentation and substance. The banker worries about risk and practicality. Each advisor works in good faith, but when they do not communicate with each other, the investor ends up with a fragmented structure that is technically inconsistent. I know the investor do not want them all in one room because that might result on a big bill. But hey, try the cost of not being well informed.
A single consolidated meeting between all advisors may feel like an expensive exercise, but it is usually cheaper than the cost of fixing a collapsed structure, reopening frozen bank accounts, or transferring assets that are stuck under entities that no longer exist. Structuring is not just paperwork. It is a living framework that affects ownership, banking, taxation, inheritance, operations, and ultimately peace of mind.
Entrepreneurs are naturally good at making commercial decisions related to their vertical of business expertise and experience. They understand markets, products, negotiation, and value creation. But structuring, tax, governance, and compliance are not commercial instincts. They require professional guidance and many years of experiance. And professionals should not sit on separate islands. They need to understand the full picture before advising on changes or before dismantling a structure that holds real assets, contracts, or commercial activity.
The best structuring decisions are the ones made slowly, thoughtfully, and with a coordinated view of legal, tax, finance, and governance. A structure should not die simply because renewal fees feel unnecessary or because someone wants quick optimisation. When a structure holds assets, its continuity and governance matter more than the short-term savings.
My message is this: Smart people act on their doubts, and when in doubt, collect all your advisors, express and explain your vision, understand every implication, and then decide. Structuring decisions made too fast or too easy can become the most expensive lesson an Entrepreneur may learn.
