Foundations in the DIFC and ADGM for Family Wealth and Succession

Introduction

What a DIFC or ADGM foundation is, who runs it, how it differs from a trust or a will, and what each registrar requires and makes public.

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Last reviewed 25 September 2026 · 7 min read

In short

A DIFC or ADGM foundation is a legal person with no shareholders. It owns assets in its own name and is run by a council under a charter and by-laws, so families use it to hold assets and company shares and to set rules for succession. It is not secret, because both registrars hold its beneficial ownership details, and it works alongside a will rather than replacing one.

What is a DIFC or ADGM foundation?

A foundation is a legal person in its own right, similar to a company but with no shareholders or owners. It holds its assets in its own name, not on trust for anyone, and it can sue and be sued. A council runs it under a charter and, usually, by-laws.

DIFC foundations are governed by the Foundations Law, DIFC Law No. 3 of 2018, as amended in 2018, 2022 and 2024. ADGM foundations are governed by the Foundations Regulations 2017, most recently amended with effect from 24 April 2026.

The charter is the founding document. It sets out the name, objects and initial assets. In the DIFC, each founder signs a declaration in it. In ADGM, it must give each founder's name and address and name a designee, who benefits if there is no other beneficiary. The by-laws cover how the council works, how council members and any guardian are appointed and removed, and how assets are distributed.

Who are the founder, council, guardian and beneficiaries?

The rules differ slightly between the two centres:

  • Founder: the person or company that sets up and endows the foundation. A DIFC founder can reserve powers to amend the charter or by-laws, change the objects or end the foundation, if the charter sets them out in full. An individual founder's reserved powers end on death. The by-laws can also give the founder or others powers such as appointing or removing officials or taking investment decisions. In ADGM, the charter or by-laws can reserve similar powers to the founder or another person, but any disposal of assets must be made by council resolution.
  • Council: at least two members, who may include the founder or a company. Members must act honestly, in good faith and with reasonable care.
  • Guardian: an overseer who holds the council to account. A DIFC foundation needs one if it has a charitable or other specified purpose, and the guardian cannot sit on the council. In ADGM, a guardian is optional while a founder is alive and required once none survives, and cannot be a founder, council member or sole beneficiary.
  • Beneficiaries: called qualified recipients in the DIFC. They do not own the assets and have only the rights the charter or by-laws give them. In ADGM, a founder can be a beneficiary, but the sole beneficiary only during their lifetime.

What are foundations used for, and how do they differ from trusts and wills?

Families use foundations to hold assets such as company shares, property and investments in one entity, to set rules for how wealth passes between generations, and for philanthropy.

Charitable use is treated differently in each centre. A DIFC foundation can have exclusively charitable objects, overseen by a guardian. Since 24 April 2026, an ADGM foundation must not operate as a non-profit organisation unless the ADGM Registrar agrees in writing. A non-profit organisation is one that mainly raises or pays out funds for charitable, religious, cultural, educational, social or similar purposes.

A trustee holds and manages the assets of a DIFC or ADGM trust for the beneficiaries. The Federal Tax Authority treats these trusts as having no separate legal personality. A foundation owns its assets itself and continues after the founder's death.

A will passes only the assets you own personally when you die. Assets transferred to a foundation belong to it, so they do not pass under your will. Both laws say a transfer to a foundation cannot be set aside because of forced heirship rules from outside the centre. The DIFC law also says it does not validate a transfer of land outside the DIFC that is invalid where the land is. How these rules apply to a particular asset, and whether courts outside the two centres would respect them, is not certain, so each asset needs legal advice.

How do you register a foundation, and what are the ongoing obligations?

Both registrars take applications online. A foundation must keep a registered office in its centre, and its name must end with the word Foundation.

  • DIFC registration: apply through the DIFC Portal. After initial approval, which the DIFC says typically takes 3 to 5 working days, the founders sign the charter and by-laws electronically, pay the fees and receive a licence and certificate. Key people must verify their passports, and funders must show evidence of funds. A registered agent is optional.
  • DIFC ongoing duties: renew the licence and file a confirmation statement each year. The council must approve the annual accounts and at least two members must sign them. The foundation then files them with the Registrar or, if it has a registered agent, gives them to the agent. Changes to the council, guardian, charter or beneficial owners must be notified within 30 days.
  • ADGM registration: a foundation must apply through, and keep, an ADGM-licensed company service provider, unless the Registrar accepts that it has substantial resources in the UAE and adequate governance. The application includes the charter, a confidential disclosure of the people involved and a beneficial ownership statement. Initial assets must be at least USD 100.
  • ADGM ongoing duties: pay the annual fee and keep accounting records for ten years. Accounts go to the Registrar only on request. Charter changes, new council members and changes to the confidential disclosure must be notified within 14 days, and changes to beneficial owners within 15 days.

What is public, and what stays private?

A foundation can keep some details private, but it is not secret. Both registrars hold beneficial ownership details and can share them with regulators and law enforcement.

  • DIFC: the Register, open to public inspection for a fee, shows the foundation's name, registered office and registered agent, and the names of its founders, council members and any guardian, but not their nationality or address. Only people with a sufficient interest can obtain a certified copy of the charter. A foundation that qualifies as a family entity can apply to keep its officers' details on a private register instead, for USD 1,000.
  • ADGM: the names and addresses of beneficiaries, council members and any guardian form a confidential disclosure held by the Registrar, and accounts are not made public. However, the Regulations also put council members' names and addresses on the Foundations Register. ADGM's fee rules set no charge for inspecting council member and guardian details, so these people may be identifiable.

How does a foundation work alongside a will?

A foundation and a will do different jobs. The will covers assets still in your own name at death. A DIFC or ADGM will can also appoint guardians for minor children, although a DIFC will covers only children living in Dubai or Ras Al Khaimah.

A will can leave assets to a foundation. The DIFC Courts Wills Service, for example, accepts a foundation as a beneficiary of a Full Will, Property Will, Business Owners Will or Financial Assets Will, if its licence or registration details are provided. The DIFC Foundations Law does not validate a gift by will that is invalid under the law of the person's last domicile, so the will itself must be sound.

The founder's death also changes how a foundation runs. A DIFC founder's reserved powers end, and an ADGM foundation must then have a guardian, so the documents should say who takes on each role. Our wills and inheritance guide compares DIFC and ADGM wills and explains probate.

Frequently asked questions

Can the founder also sit on the council?

Yes, in both centres. A DIFC founder can instead be the guardian, but an ADGM founder cannot. In neither centre can a council member also be the guardian.

Does a foundation replace my will?

No. A foundation only holds the assets transferred to it. Assets still in your own name pass under your will, and a will can also appoint guardians for minor children.

What does it cost to set up and run a foundation?

The DIFC charges no registration fee. The operating licence costs USD 350 a year, plus an AED 20 knowledge and innovation fee, and filing the annual confirmation statement costs USD 300. If the foundation processes personal data, the data protection notification costs USD 750, then USD 250 a year to renew. ADGM lists USD 1,000 to incorporate and USD 500 a year to renew, both including its data protection fee. Unless exempt, an ADGM foundation must also appoint a company service provider, whose fees are separate.

Does a foundation pay UAE Corporate Tax?

As a legal person, it is within the scope of Corporate Tax in its own right at first. It can apply to the Federal Tax Authority to be treated as tax transparent if it meets the family foundation conditions, which include benefiting identified individuals or public benefit entities and mainly holding and investing assets. See our Corporate Tax guide.

How Indigo Group can help

Indigo Group can help structure foundations, trusts and wills through our Trust and Estate Planning team, and with Corporate Tax filing through our Corporate Services team. We review your global assets, family position and residence status, and work with tax professionals in the relevant jurisdictions. For an overview of how we work with expatriates, see financial advice for expats in Dubai. Indigo Group's regulated entity, Indigo Financial Analysis and Consultancy LLC, is licensed by the UAE Capital Market Authority (CMA), licence no. 706042.

Read more about our trust, foundation and estate planning services in Dubai.

To talk this through, book a consultation or message us on WhatsApp.

Written by

Colin Lynam

Managing Director

Colin is an experienced wealth manager with extensive knowledge of the GCC.

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Last reviewed 25 September 2026. This article is for general information only and does not constitute financial, legal or tax advice. Rules change, so please speak to a qualified adviser about your circumstances.

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