The Abu Dhabi Department of Economic Development (ADDED), in collaboration with the The Endowments and Minors’ Funds Management Authority (Awqaf Abu Dhabi), has issued a resolution on the establishment and licensing of charitable foundation institutions in Abu Dhabi. The resolution is a transformational step in strengthening charitable foundation structures, supporting the sustainability of family businesses, and promoting best practices in fund management, reported by Gulf News.
This reinforces Abu Dhabi’s leadership in charitable foundation management and enhances the role of non-profit organizations and associations (the third sector) in the gross domestic product (GDP). The resolution, the first of its kind in the UAE, introduces a comprehensive regulatory framework that formalizes the role of the charitable foundation sector in sustainable socio-economic development.
Resolution establishes robust monitoring mechanisms
The resolution aligns with the UAE Community Year 2025 under the theme “Hand in Hand”, reflecting the vision of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, to promote sustainable growth, a knowledge-based economy and social solidarity. The resolution aligns with existing laws relating to family foundations and establishes a structured governance framework for such entities. It provides a framework for the establishment and administration of charitable companies, covering aspects such as legal status, permitted activities and licensing requirements.
By establishing clear legal and regulatory guidelines, the resolution enables companies, institutions and individuals to contribute to long-term social and economic progress. All applications must be approved by Awqaf Abu Dhabi to ensure compliance with applicable regulations, donor intentions and the broader objectives of the grant. Under the new structure, grant-making companies will be able to manage private grants while engaging in commercial activities that support the sustainability and expansion of endowment assets, maximizing both financial returns and social impact. The resolution also establishes robust monitoring and oversight mechanisms to strengthen governance and accountability in the sector.
Developing the UAE’s Charitable Companies Ecosystem
The issuance of this resolution on the establishment and licensing of charitable companies in Abu Dhabi aims to provide an appropriate framework that will allow them to grow and thrive. This is in line with the emirate’s vision, which places human development, sustainability and economic inclusion at the heart of its strategic plans to accelerate economic growth and diversification, and further develop a knowledge-based and innovation-based economy. Providing an appropriate ecosystem for the establishment of charitable foundation companies paves the way for their enhanced role and contribution to various sectors of the economy, focusing on achieving social development goals.
With detailed guidelines and instructions to be added later for foundations, the resolution provides a regulatory framework that ensures the highest standards of governance and transparency for the benefit of the founder and his beneficiaries, and encourages investment in numerous strategic areas such as manufacturing, education, trade, health, agriculture, culture and innovation. It also promotes cooperation between the public and private sectors to achieve sustainable development goals and resource efficiency.