Authors: Sinduja Amudanathan & Aparajitha Ramesh

Introduction

To quote His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai: “We cannot be content at heart until we start giving.”

Charitable contributions constitute a longstanding and integral aspect of the social and cultural fabric of the United Arab Emirates. To ensure that such donations are administered in a manner consistent with national objectives and regulatory standards, the Government has promulgated a comprehensive legal framework. These include:

1. Federal Law No. 3 of 2021 Regarding the Organization of Donations (“Donation Law”); and
2. Cabinet Decision No. 96 of 2022 on the Executive Regulation of the Donation Law (“Executive Regulations”).

Together, these measures safeguard donors, protect public trust, and prevent the misuse of charitable funds.

Scope of the donation law

The Ministry of Community Development (“Ministry”) or the local authority in each emirate (“Local Authority”) concerned with regulating Fundraising (“Competent Authority”) is responsible for licensing and supervising entities that collect, receive, distribute, or raise donations within the UAE. These include:

• Charitable associations;
• Public and private institutions; and
• Entities established by law, including those in free zones.

No individual or organization may collect or distribute donations without a valid permit from the Competent Authority.

Fundraising requirements

Licensed entities must obtain prior approval before initiating fundraising and must provide details such as:

• Purpose, beneficiaries, and duration of the fundraising campaign, along with the timeframe for submitting donations;
• Details of responsible persons managing the fundraising, including their names and identification;
• Methods and locations through which donations will be collected;
• Approval of the charity authorizing the fundraising activity; and
• Breakdown of administrative and operational expenses, specifying the percentage to be deducted.

[N.B. The Ministry in coordination with the relevant Local Authority(s) are empowered to put in place appropriate efficiency measurement and evaluation system to measure and evaluate licensed/authorized entities to collect and provide donations as per the following indicators set out in the Executive Regulations:

• The percentage of fundraising costs out of total donations
• Degree of adherence to fundraising controls and procedures
• Percentage of commitment to spending the donations for the purposes for which they were collected
• The target amount compared to the achieved amount
• Percentage of beneficiaries whose approval of the information exchange permit was taken out of the total number of beneficiaries, and
• Any other indicators as are to be agreed upon in coordination with the Local Authority(s).
• The evaluation of these entities shall be based on the following evaluation levels (excellent – good – poor).]

Approved methods of collecting donations

Monetary donations may only be collected through authorized means, including:

• Cash or coupons issued against receipts;
• Short text messages;
• Concerts, auctions, exhibitions, or charitable events;
• Direct debit or monthly account deductions;
• Dedicated fundraising bank accounts;
• Promotional campaigns linked to donations;
• Licensed ATMs;
• Approved digital platforms;
• Social media (subject to authorisation); and
• Any other methods approved by the Competent Authority.

For in-kind donations, the mode of collection is separately determined by the Competent Authority.

Duration and termination of permits

Under the Donations Law and the Executive Regulations, the following rules apply with respect to the duration and expiry of fundraising permits:

1. Term of Permits – A fundraising permit shall not exceed a period of one year. The Competent Authority may, upon a duly justified request submitted at least fifteen (15) days prior to expiry, grant an extension for a similar term.
2. Permit Limits – As a general rule, no entity may be granted more than four (4) fundraising permits within a single calendar year, unless otherwise authorised by the head of the Competent Authority.
3. Expiry of Permits – A fundraising permit shall expire in the following circumstances:

• Upon the expiry of its authorised term;
• Upon the fulfilment of its stated purpose;
• Upon attainment of the target amount of donations;
• Upon the dissolution or cessation of the legal personality of the licensed or authorised entity; or
• In such other cases as may be determined under the Executive Regulations.

4. Obligations upon Expiry – Following the expiry of a permit, the licensed or authorised entity shall cease all collection activities and related publicity, refrain from receiving further donations, and notify the Competent Authority of the procedures taken. In the event of excess donations, the Competent Authority shall determine the manner of their disposal.

Cross-border donations

Licensed entities may not collect, deliver, or transfer donations outside the State except in accordance with the regulations and procedures prescribed by the Ministry of Foreign Affairs and International Cooperation. Such restrictions are designed to ensure that all cross-border fundraising activities adhere to national compliance standards on anti-money laundering and counter-terrorism financing, while maintaining the integrity and transparency of charitable contributions.
Penalties for violations

The Donation Law imposes strict penalties to deter unlawful fundraising:

Offence	Penalty
Trading in or profiting from donated funds	Imprisonment and/or fine of AED 200,000–500,000, or one of these two penalties and the penalty is doubled in the event of recurrence.
Using donations for purposes other than authorized in the permit (Violation of Articles (6, 12, 14, 17, 21, 26, and 31)	Imprisonment and/or fine of AED 150,000–300,000, or one of these two penalties and the penalty is doubled in the event of recurrence.
Using donations for purposes other than those for which they were accepted or collected	Imprisonment and/or fine of AED 150,000–300,000, or one of these two penalties and the penalty is doubled in the event of recurrence.
Misleading the public by using terms such as “charitable” or “humanitarian” without authorization (Violation of Article 16)	Fine up to AED 100,000

In all cases, the court shall order the confiscation of donations collected in violation of this Law, and the deportation of any foreigner after execution of the imposed sentence.

Conclusion