Foundations
What are Foundations?
Foundations are independent legal entities with no shareholders, designed for wealth preservation, succession planning, asset protection, and philanthropy. They combine features of a trust and a company, making them ideal for long-term family governance and legacy planning.
Key Features:
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Governed by dedicated Foundation laws in both DIFC and ADGM.
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Established by a Founder, with governance managed by a Foundation Council.
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May appoint a Guardian to oversee the Council, especially for charitable or purpose foundations.
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A Registered Agent may be appointed to support incorporation and compliance.
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Qualified Recipients (beneficiaries) can be individuals or entities defined in the Charter/By-Laws.
Guidelines
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Use Foundations to consolidate family assets under one structure.
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Define clear governance rules via the Charter and By-Laws.
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Engage family members in decision-making to ensure continuity and instill values.
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Leverage for succession planning, asset protection, and philanthropic giving.
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Maintain compliance: registered office in DIFC/ADGM, annual accounts, AML/KYC requirements.
Restrictions
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Cannot engage in commercial trading activities (other than ancillary to its purpose).
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Cannot carry out regulated financial services like banking or insurance.
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Should not be used to actively run a business better suited to hold and oversee ownership.
Benefits
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Perpetual existence, ensuring smooth intergenerational transfers.
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Strong asset protection, including firewall provisions against foreign judgments.
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Privacy protections: limited disclosure of key stakeholders.
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Potential tax efficiencies, including possible corporate tax exemptions when structured correctly.
FAQs
Yes. A Foundation can hold shares in operating companies (directly or via SPVs). However, it cannot itself conduct commercial trading activities.
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At least two members (unless a Guardian is appointed).
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Can include the Founder, family members, trusted individuals, professionals, or corporate entities.
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Must act in the best interest of the Foundation, avoiding conflicts of interest.
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If the Founder retains a beneficial interest.
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If the Foundation has a charitable purpose.
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Or if specified in the By-Laws. The Guardian ensures oversight and can hold veto rights over Council decisions.
Yes.
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DIFC Foundations can directly own property in Dubai and indirectly in other Emirates via SPVs.
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ADGM Foundations can directly hold Abu Dhabi property, and foreign property (subject to local law). Both can hold global assets such as real estate, shares, portfolios, and IP.
Not automatically. DIFC and ADGM are common law jurisdictions, allowing flexibility in defining succession. Muslim families can choose to align the By-Laws with Sharia principles if desired.
Yes. Foundations must register for UAE Corporate Tax (though many may qualify for exemptions) and may have FATCA/CRS reporting obligations depending on their structure. Clients are recommended to take tax structuring advise from qualified tax consultants before setting up a Foundation.
Zubin Muriya is a seasoned Governance, Risk, and Compliance (GRC) professional with over two decades of cross-jurisdictional experience in banking regulatory compliance, financial crime risk management, corporate governance framework, and audit advisory. His work across India and the GCC (UAE, Qatar, Bahrain) reflects a career rooted in regulatory rigor and operational integrity.
