Free Zone Regulations of 2025 · RAK ICC
Amending instrument, commencing 31 July 2025, that revises the 2019 Foundations Regulations on foundation characteristics, foreign laws and judgments, property and arbitration, adds provisions on duress, arbitral tribunal powers and time limits for actions, and inserts a Schedule 2 applying the DIFC Arbitration Law and ADGM Arbitration Regulations to foundation disputes.
The RAK ICC Foundations Regulations 2019, Amendments 2025 is the amending instrument that rewrote the asset-protection and dispute provisions of the RAK ICC foundations regime. Section 1 states that it came into force with effect from 31 July 2025 and is made by the RAK ICC board under Ras Al Khaimah Decree No. 4 of 2016. Section 2 contains the amendments, each expressed as a replacement of or insertion into the 2019 Regulations.
The definitions in Regulation 1 are amended so that the charter and by-laws refer to 'these Regulations' and a new definition of foreign law is added: any law other than the Regulations or the law of the court's jurisdiction. Regulation 2 on the characteristics of a foundation is recast: a foundation is 'a corporate entity with a legal personality separate from that of its Founder(s)', has the capacity of a natural person, does not hold its property on trust, and the rights of the founder and others are set by the by-laws and may be assigned if the by-laws allow; a copy of any assignment must reach the registered agent and the Registrar within 30 days or a level 1 fine applies.
Regulation 7 on foreign laws, proceedings and judgments is strengthened. A disposition to a foundation is not void because a foreign jurisdiction prohibits or does not recognise foundations; a transfer is not voidable because of a founder's or contributor's bankruptcy or creditor claims under foreign statutes; where a creditor proves fraud the transfer may be set aside only to the extent of that creditor's claim and the creditor carries the burden of proof; and a foreign judgment inconsistent with Regulations 7 and 8 'shall not be recognised or enforced'. A foundation officer sued abroad must stop acting if the foreign court does not dismiss the action.
New Regulation 25A on duress requires anyone holding powers under the Regulations, charter or by-laws to act only on instructions given freely and to ignore demands made under compulsion or by persons not appointed under the foundation's documents. Regulation 27 restates what the property of a foundation comprises and requires it to be managed solely for the objects.
Regulation 67 now allows the charter or by-laws to refer foundation disputes to arbitration, with the ADGM Arbitration Regulations applying where the ADGM Courts are the court and the DIFC Arbitration Law where the DIFC Courts are; new Regulation 67A gives the arbitral tribunal all the powers of the court over the administration of a foundation, including appointing representatives for minors and unborn or unascertained persons; new Regulation 68A bars actions to set aside a foundation or a disposition to it unless commenced within three years. A new Schedule 2 adapts the DIFC Arbitration Law and the ADGM Arbitration Regulations to foundation disputes. The amendments are reflected in the consolidated 2019 text.
All foundations registered in RAK ICC, whether established before or after 31 July 2025, together with their founders, contributors, council members, guardians, officers and beneficiaries; creditors and foreign claimants seeking to reach foundation property; and courts and arbitral tribunals dealing with foundation disputes.
English official text in 9 passages. Open the full text or jump to a provision:
| Section 1 | Citation as the RAK ICC Foundations Regulations 2019, Amendments 2025; in force with effect from 31 July 2025; made by the RAK ICC board under Ras Al Khaimah Decree No. 4 of 2016. |
| Regulation 1 | Definitions amended: charter and by-laws now refer to the Regulations rather than a law, and foreign law is defined as any law other than the Regulations or the law of the court's jurisdiction. |
| Regulation 2 | A foundation has legal personality separate from its founders and the capacity of a natural person; founder and other rights are set by the by-laws and may be assigned, with copies of any assignment sent to the registered agent and Registrar within 30 days. |
| Regulation 7 | Dispositions are not void under foreign law or because of a founder's foreign bankruptcy; a creditor proving fraud recovers only to the extent of its claim and bears the burden of proof; inconsistent foreign judgments are not recognised or enforced; officers sued abroad must cease acting if the action is not dismissed. |
| Regulation 25A | Duress: persons exercising powers must accept only demands made of their own free will, not under compulsion or legal process other than from the court or Registrar, and must ignore demands from persons not authorised under the foundation's documents. |
| Regulation 27 | The property of a foundation may comprise any property, consists of the initial capital, accepted endowments, investment proceeds and other lawfully acquired assets, and must be managed solely for the objects in the charter. |
| Regulation 67 | The charter or by-laws may refer disputes to arbitration with a specified seat and rules, failing which the court has jurisdiction; the ADGM Arbitration Regulations apply for the ADGM Courts and the DIFC Arbitration Law for the DIFC Courts. |
| Regulation 67A | Unless the charter or by-laws provide otherwise, an arbitral tribunal may exercise all the powers of the court over the administration of the foundation and may appoint representatives for minors and unborn or unascertained persons. |
| Regulation 68A | Actions to set aside the establishment of a foundation or a disposition to it, or for orders under Part 9, must be commenced in the court within three years of the relevant date; prior claimants to property must sue within three years of the disposition. |
| Schedule 2 | Applies the DIFC Arbitration Law (Part 1) and the ADGM Arbitration Regulations (Part 2) to foundation disputes, treating an administration question as a dispute and allowing founders or contributors to fix the dispute-resolution method in the charter or by-laws. |
The amending instrument creates one new fine: failure to send a copy of an assignment of rights to the registered agent and the Registrar within 30 days carries a fine not exceeding level 1 (Regulation 2(7)). Other sanctions remain those of the 2019 Regulations, with level amounts stated in the RAK ICC fee schedule from AED 1,000 at level 1 to AED 20,000 at level 5.
The 2025 amendments changed the advice we give every founder. We now point to Regulation 7 when a client asks whether a foreign bankruptcy, a forced-heirship claim or a foreign judgment can reach foundation assets, and to Regulation 68A for the three-year window in which a transfer can still be attacked, which affects how we sequence contributions. Our charter and by-law templates were revised after 31 July 2025 to include an arbitration clause under Regulation 67 that names the seat and rules, since the alternative is court jurisdiction, and to reflect the duress provision in Regulation 25A so that council members have a written basis for refusing instructions given under pressure. For foundations registered before the amendments we review the documents with the client and file any assignment of rights within the 30-day period.
| Amends | RAK ICC Foundations Regulations 2019 |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
RAK ICC Foundations Regulations 2019
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