Legal Articles / Federal Law on WAQF (Endowment) in the UAE

Federal Law on WAQF (Endowment) applies to charitable practices. In practical terms, WAQF is a permanent dedication of the assets to a charitable organization for making a donation.

WAQF means a permanent dedication of personal assets and properties, but for a charitable purpose only. The purpose can be a religious purpose or social. From individuals to corporate entities, they have right to organize a charitable trust and to donate the personal assets. The concept of WAQF is proved through Islamic philosophies and religious point of view. It is suggested that WAQF must be free from corruption and dishonesty.

The charitable organizations in the UAE are registered, and donations are managed under the Federal Law No. 5 of 2018 on WAQF. If anyone wants to donate in the UAE, they must consult with experts for specific proceedings.

Charitable entities working in UAE has to maintain transparency. Law bounds charitable entities to submit periodic balance reports, like other businesses to concerned authorities. This legal framework ensures accountability, and strengthens donor confidence.

The laws are made to regulate operations smoothly. However, the Federal law on WAQF (Endowment) has been established to encourage donations and charitable contributions, ensuring to protect the rights of the beneficiaries and the administrators. Furthermore, the misuse of the assets can be avoided if they are covered under ‘WAQF property’. Additionally, the property will be well-managed and utilised under the terms and conditions of federal law for endowment.

The law is applied for the public and private assets both. Whether the property is movable or unmovable, but it has to be tangible. If an individual wants to know about endowment property, they should talk to concerned departments or expert opinion is also taken from professional advocates.

The endowment in UAE involves extensive documentation. A WAQF deed is created by the Waqif (the founder). They will have the information about the property and how it shall be administered and treated in the UAE. The deed document is then submitted to the General Authority of Islamic Affairs and Endowments (GAIAE) for registration.

After the submission to the authorities, the property is then taken away legally from the individual’s personal ownership. It is then recorded in the WAQF registry. As the property is now labeled as a WAQF property, the asset cannot be sold, inherited, or mortgaged.

There are different types of WAQF that are recognized by the law. Professional lawyers can provide you with good advice about the type of WAQF. The public WAQF is related to public benefit, such as schools, mosques, and hospitals. The other type of WAQF is private, created by any family member or a descendant. Joint WAQF is when the benefit is for both, family and the public. A temporary WAQF is for a limited time and then given back to the owner or the heir. The property is no longer a WAQF property, and so it can be managed differently by the owners.

The properties under WAQF are administered by a specific person. They are responsible for maintaining the property, ensuring the WAQF deed is verified and proceeding legally. However, the financial activities shall be reported to GAIAE. Any mistreatment of the property or the deed will result in severe consequences.

There is no personal income tax in the UAE. However, the Federal Law on WAQF (Endowment) have financial advantages for the individuals. The exemption of municipal fees and property taxes plays a vital role in the financial incentives for the WAQF property. Moreover, the donations in the UAE come under corporate social responsibility where businesses also make charities to the charitable organisation. If you have a company and want to make donation for to an organisation, then you must talk to the professional Dubai lawyers.

The UAE has made digital transformation by introducing digital WAQF. Individuals can now make online donations through licensed entities. In simple words, digital WAQF is also known as crowdfunding. This kind of donation is collected online with a purpose. For example, if the individual wants to build a well or sponsor someone’s education, they can make an online donation through different crowdfunding websites.

There could be issues for WAQF in the UAE. These problems are common across the UAE. Misconduct by the trustee or the deed terms were confusing, and maybe there are disagreements. If any dispute occurs around WAQF, it can be resolved through Shariah law or civil court. Mediation could be a great idea for resolving matters, amicably.