ADDED Introduces Comprehensive Resolution For Establishing And Licensing Endowment Companies In Abu Dhabi

The Abu Dhabi Department of Economic Development (ADDED), in partnership with The Endowments and Minors’ Funds Management Authority (Awqaf Abu Dhabi), has introduced a new resolution. This initiative focuses on establishing and licensing endowment institutions in Abu Dhabi. It aims to enhance endowment structures, support family-owned businesses, and improve endowment management practices. This move strengthens Abu Dhabi’s leadership in governance and boosts the role of non-profit organisations in the GDP.

This resolution is the first of its kind in the UAE, offering a detailed regulatory framework for endowments. It formalises their role in sustainable socio-economic development, aligning with the UAE’s Year of Community 2025 theme, "Hand in Hand." This reflects President His Highness Sheikh Mohamed bin Zayed Al Nahyan's vision for sustainable growth and social solidarity. The framework builds on existing laws, addressing family-owned endowments and introducing structured governance.

Endowment companies can now manage private grants while engaging in commercial activities to sustain endowed assets. This approach maximises financial returns and social impact. The resolution also introduces monitoring mechanisms to enhance governance and accountability within the sector. All applications must be approved by Awqaf Abu Dhabi to ensure compliance with regulations, donor intentions, and grant objectives.

Fahad Abdulqader Al Qassim, Director-General of Endowments and Minors’ Funds Management Authority, emphasised the resolution's role in balancing sustainable investment with prudent risk management across asset classes. He stated, "This resolution reflects the strategic partnership between Awqaf Abu Dhabi and ADDED, establishing a regulatory framework that fosters endowment investments and maximises their social and economic impact."

Rashed Abdulkarim Al Blooshi, Undersecretary of ADDED, highlighted the importance of this resolution. He said it provides frameworks for endowments to grow, aligning with Abu Dhabi's vision of human development and economic inclusion. "Our cooperation with Awqaf Abu Dhabi is to ensure achieving the objectives of this step with a focus on sound management of endowments companies," he added.

Encouraging Investment Across Sectors

The resolution includes guidelines ensuring governance standards benefit founders and beneficiaries while encouraging investments in strategic areas like manufacturing, education, trade, healthcare, agriculture, culture, and innovation. It promotes public-private cooperation to achieve sustainable development goals efficiently. Detailed guidelines will be added later for endowment institutions to maintain high governance standards.

The introduction of endowment companies represents an innovative evolution in governance. It allows greater flexibility to adapt to changing economic conditions. Donors can establish independent entities under corporate law adhering to high governance standards. This ensures continuity of philanthropic legacies for future generations.

Boosting Economic Diversification

The resolution covers various types of endowments: private (family-owned), charitable, and joint ones. It allows managing endowed shares in commercial enterprises if included in incorporation articles according to laws. This aims to attract more investment into the sector, strengthening its contribution to Abu Dhabi’s sustainable development agenda.

Awqaf Abu Dhabi launched Awqaf Capital as its dedicated investment arm in December 2024. This initiative deploys capital across diverse asset classes, reinforcing Abu Dhabi’s role as a centre for sustainable endowment management globally. Leveraging its strategic position as an investment gateway further cements this status.

The resolution supports UAE’s broader economic diversification strategy by reinforcing Abu Dhabi as a leading hub for philanthropy and responsible investment. It embodies UAE leadership's vision for securing dignified quality life while promoting solidarity aligned with Year of Community 2025 goals.

With inputs from WAM