Abu Dhabi issues new endowment company rules

Abu Dhabi Department of Economic Development (ADDED), in collaboration with The Endowments and Minors’ Funds Management Authority (Awqaf Abu Dhabi), has issued a resolution on the establishment and licensing of endowment institutions in Abu Dhabi.

The resolution represents a transformative step in enhancing endowment structures, supporting the sustainability of family-owned businesses, advancing best practices in endowment management and reinforces Abu Dhabi’s leadership in endowment governance and enhances contributions of non-profit organisations and associations’ (Third Sector) role to the gross domestic product (GDP).

The first-of-its-kind resolution in the UAE, introduces a comprehensive regulatory framework that formalises the endowment sector’s role in sustainable socio-economic development.

The resolution aligns with and builds upon existing laws, which addresses family-owned endowments, and introduced structured governance for such entities. It provides a framework for the creation and administration of endowment companies, covering aspects such as legal status, permitted activities, and licensing requirements.

.@AbuDhabiDED, in collaboration with @adawqaf, has issued a resolution to regulate the establishment and licensing of endowment companies in #AbuDhabi. The resolution, a first of its kind in the UAE, aims to enhance endowment practices and systems and regulate family businesses. pic.twitter.com/C5IzvHLqhp

— مكتب أبوظبي الإعلامي (@ADMediaOffice) February 17, 2025

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 current regulations, donor intentions and the broader objectives of the grant.

Under the new framework, endowment companies will have the ability to manage private grants while engaging in commercial activities that support the sustainability and expansion of endowed assets, maximising both financial returns and social impact. The resolution also introduces robust monitoring and supervisory mechanisms to enhance governance and accountability within the sector.

With detailed guidelines and manuals to be added later for the endowment institutions, the resolution provides a regulatory framework that ensures the highest standards of governance and transparency for the benefit of the founder and its beneficiaries and encourages investments in multiple strategic areas such as manufacturing, education, trade, healthcare, agriculture, culture and innovation. It also promotes cooperation between the public and private sectors to achieve sustainable development’s goals and efficient usage of resources.