Forced Heirship Attack
A beneficiary's home jurisdiction may attempt to claim a share of foundation assets under its own succession law.
Fix: Include jurisdictional ring-fencing provisions and asset protection language.
DIFC & ADGM Foundation Legal Services
Foundation Charters,
By-Laws and Governance
Documents
Bespoke legal documentation for DIFC and ADGM foundations, covering succession, family governance, private wealth and cross-border structures
WHY FOUNDATIONS
WHY CLIENTS USE FOUNDATIONS
Used for succession, control and long-term governance
A DIFC or ADGM foundation is often used when private wealth needs more structure than a will, and more continuity than personal ownership can provide. It can hold assets in its own name, continue independently of the founder, and create a governance framework for how decisions, distributions and transitions are handled over time.
Our clients typically use foundations to hold Dubai real estate, operating company shares, investment assets, family wealth, and increasingly digital assets or more complex cross-border holdings. The legal work is not simply about forming the structure; it is about drafting documents that remain workable when circumstances change.
01
Hold and govern family wealth over time.
02
Plan for founder incapacity or death.
03
Create a clear framework for beneficiaries and council members.
04
Coordinate succession across multiple jurisdictions.
WHY FOUNDATIONS
Used for succession, control and long-term governance
We advise across all five UAE digital asset regulatory frameworks and deliver the legal work required to implement that advice. Our role does not stop at high-level guidance; we structure, draft and prepare the underlying documentation needed to move matters forward.
| Point | DIFC Foundation | ADGM Foundation |
|---|---|---|
Best suited where
|
Dubai real estate, strong DIFC connection, family governance structures centred on Dubai. | English-law familiarity, digitally native assets, structures where institutional CSP governance is preferred from the outset. |
|
Legal framework
|
DIFC Foundation Law, with DIFC common law and English law principles relevant in the background. | ADGM Foundations Regulations, with English law applied directly as part of the framework. |
|
Real estate angle
|
Often preferred where Dubai property is central to the structure — the established route, backed by a 2017 DIFC–DLD MoU covering designated freehold areas. | Ownership of Dubai property in designated areas is also possible (2018 ADGM–DLD MoU), but DIFC remains the more commonly used vehicle; ADGM is typically chosen for other priorities first. |
|
CSP / administration
|
Structure-dependent; setup and administration support coordinated through 10 Leaves. | CSP involvement is a more central part of the ADGM structure; coordinated through 10 Leaves. |
|
Typical profile
|
Typically suits GCC families, Dubai-based founders, and private wealth or family business succession structures. | Typically suits founders with an English-law background, digital-asset holders, and internationally structured families — though neither jurisdiction is restricted to these profiles. |
DIFC Foundation
- Registered with the DIFC Registrar of Companies (ROC)
- Governed by DIFC common law — English law as fallback
- Registered Agent appointment: recommended but not mandatory for all structures
- Guardian: optional — but strongly recommended, and becomes relevant on the founder's death or incapacity
- No universal audit requirement (only if required by the Registrar or the Charter) — annual accounts must still be filed with the ROC within 9 months of financial year-end, and a Validation Statement submitted at license renewal
- Direct access to DIFC Courts for dispute resolution
- DIFC–DLD Memorandum of Understanding: enables Dubai real estate to be held by a DIFC Foundation, with a reduced transfer fee of 0.125% (vs the standard 4%) available in qualifying cases, e.g. where the transfer is treated as a gift into a foundation by its own founder — applied by DLD at its discretion, case by case
- Sharia compliance option: the Charter can incorporate Sharia principles, halal investment mandates and distribution rules aligned with Islamic inheritance
- Re-domiciliation: a foundation may be migrated into or out of DIFC
- Annual fee: USD 500
ADGM Foundation
- Registered with the ADGM Registration Authority (RA)
- English law applied directly — not as a fallback, but as the primary legal system. This matters to UK and European founders who want their governance documents to read as UK law instruments
- Licensed CSP appointment: mandatory by law for non-exempt ADGM Foundations. 10 Leaves holds an ADGM CSP licence — this is the required professional anchor in every ADGM Foundation structure
- Guardian: mandatory once there is no surviving Founder, and optional while a Founder survives the By-Laws can give the Guardian extensive sanction rights over council decisions
- A nominal USD 100 minimum initial asset applies, with no UAE residency requirement for the founder or any council member
- Particularly well-suited to foundations holding digital assets and crypto — the ADGM/VARA ecosystem provides regulatory clarity for virtual asset custody within a foundation
- Often reported to be faster to administer than the DIFC ROC in practice
- ADGM Courts apply English law directly — preferred by UK and European-background founders
Our competencies
WHAT WE DRAFT
Our foundation legal work covers every document in the foundation lifecycle — from initial establishment through ongoing governance, amendment and succession.
Foundation Charter
The Charter is the constitutional document of the foundation. It sets out the foundation’s objects, core governance architecture, founder powers, council structure, beneficiary framework and dissolution mechanics.
We draft Charters that are tailored to the assets involved, the founder’s intended level of control, and the legal systems likely to affect the structure over time.
Foundation By-Laws
The By-Laws govern how the structure works day to day. This is where the operating detail sits: council procedure, voting mechanics, deadlock resolution, Guardian powers, beneficiary rights, amendment mechanics, and governance during transition events such as incapacity or death. This is also where poor templates usually fail. The real risk is rarely the formation day; it is what happens later when decisions become contested or circumstances change.
Letters of Wishes
A Letter of Wishes allows the founder to guide the council privately on distributions, family circumstances and sensitive decision-making. It is not a substitute for the Charter or By-Laws; it works properly only when it is consistent with them. We draft Letters of Wishes so they are usable, coherent and capable of being updated as family circumstances evolve.
Amendments and updates
Foundations are not static. Council members change, assets expand, beneficiaries are added or removed, and structures sometimes need to evolve with family or business reality. We draft Charter amendments, By-Laws amendments, Guardian appointments and removals, beneficiary changes, and other post-establishment legal instruments required to keep the structure current.
Ongoing governance documents
Where needed, we also prepare the governance documents that support the council over time: resolutions, policy documents, conflict-management instruments, and succession-planning documents for post-founder transitions.
Why bespoke matters
What template foundation documents usually miss
Our foundation legal work covers every document in the foundation lifecycle — from initial establishment through ongoing governance, amendment and succession.
FIVE CALLOUTS
01
Founder
Incapacity
who steps in, and
under what
authority?
02
Mixed Asset
Governance
can one structure
sensibly govern real
estate, private
company shares and
digital assets at the
same time?
03
Disputed
Beneficiary
Status
who is entitled,
and how is that
proved?
04
Cross-Border
Succession
Pressure
how should the
documents respond
where another legal
system attempts
to intervene?
05
Council
Deadlock
what happens if
decision-makers
cannot agree?
Why bespoke matters
What template foundation documents usually miss
Our foundation legal work covers every document in the foundation lifecycle — from initial establishment through ongoing governance, amendment and succession.
Council Deadlock
Two council members in permanent disagreement, with no casting vote mechanism, can leave the foundation ungovernable.
Fix: Draft deadlock resolution provisions into every set of By-Laws.
Founder Incapacity
If the founder cannot exercise reserved powers and the By-Laws do not address this, the foundation operates in a vacuum.
Fix: Draft incapacity provisions covering power transfer and Guardian activation.
Disputed Beneficiary
A person may claim to be a beneficiary, turning unclear beneficiary definitions into a potential litigation question.
Fix: Draft beneficiary class provisions with sufficient precision to prevent ambiguity.
Asset-Specific Governance
A foundation holding volatile digital assets, illiquid private equity and Dubai real estate cannot be governed by one generic investment policy.
Fix: Draft asset-class-specific governance provisions for each material holding.
Multi-Law Customisation
This is Legability's most distinctive capability in foundation work. Many of our clients have beneficiaries in multiple countries, assets governed by different legal systems, and family structures that interact with the succession laws of India, the United Kingdom, France, or other jurisdictions simultaneously.
Indian Succession Act 1925
For NRI clients with Indian beneficiaries or Indian-domiciled assets. Santanu Ghosh, our India and disputes partner, has direct expertise in how DIFC Foundation documents must be structured to interact with Indian succession law.
Hindu Undivided Family (HUF) structures
Where an Indian founder has existing HUF assets that must be restructured before or alongside foundation establishment. This is a specialism of Legability's India practice.
European succession law
For founders with assets in France, Germany or other civil law jurisdictions where forced heirship rules may attempt to override foundation governance. Bishr Shiblaq, our Luxembourg partner, advises on European succession law interactions with DIFC and ADGM structures.
Dubai Law No. 15 of 2017
Dubai Law No. 15 of 2017 on the administration of estates and implementation of wills of non-Muslims, together with Federal Decree-Law No. 41 of 2022 on Civil Personal Status - the framework governing non-Muslim succession in Dubai. For expatriate founders holding Dubai assets, this directly affects succession planning and must be considered in foundation document drafting.
01
Ministerial Decision No. 261 of 2024 — The Fiscal Transparency Election
MD 261 established the fiscal transparency election for family foundations. A family foundation that qualifies under MD 261 is treated as fiscally transparent for UAE corporate tax purposes. Fiscal transparency means the foundation itself is not the taxable entity — the income is attributed to and taxed in the hands of the beneficiaries instead.
The foundation receives dividend income from a UAE operating company or investment portfolio
That income is attributed directly to the beneficiaries under the fiscal transparency election
The beneficiaries are UAE-resident individuals with no other taxable business income
UAE individuals are not subject to personal income tax
Effective corporate tax rate on qualifying foundation income: zero
02
Ministerial Decision No. 229 of 2025 — The Clarifications That Matter
MD 229 extended and clarified the conditions under which the fiscal transparency election applies. It addressed three scenarios that MD 261 left ambiguous:
Cross-border asset holdings
— where the foundation holds assets in multiple countries, and the question is how the fiscal transparency election interacts with the tax treatment of those assets in their home jurisdictions
UAE double tax treaty interaction
how the foundation's fiscal transparency status interacts with the UAE's 140+ double tax treaty network; which treaty benefits are available to a fiscally transparent foundation and under what conditions
Multi-layer holding structures
where the foundation sits above a UAE holding company, a Luxembourg SCSp or a Mauritius Global Business Corporation (GBC) GBC1, and the income flows through multiple layers before reaching the foundation
For clients with cross-border assets — particularly those with Indian operating companies, Luxembourg fund structures or GCC real estate across multiple emirates — MD 229 is the decision that makes the three-jurisdiction structure workable from a tax perspective. Bishr Shiblaq (Luxembourg overlay) and Sachin Auchybour (Mauritius overlay) advise on the treaty interaction as part of every cross-border foundation engagement.
UAE FOUNDATION VS. SINGAPORE SINGLE FAMILY OFFICE
| UAE Foundation (MD 261) | Singapore SFO (S13O / 13U) | |
|---|---|---|
| Effective tax rate | DFC is a fiscal transparency election under MD 261 | 0% on qualifying income |
| Minimum AUM requirement | None | SGD 5M (SFO) / SGD 10M (13U), tested annually |
| Minimum local annual expenditure | None | SGD 200K–500K, on an AUM-tiered scale |
| Minimum local headcount | None | 2–3 investment professionals (at least 1 non-family) |
| Physical presence requirement | None for founders/beneficiaries (registered agent; office required at entity level) | Singapore presence required |
| Establishment timeline | 2–4 weeks | 3–6 months (MAS approval) |
| Court system | DFC Courts / ADGM Courts | Singapore Courts |
| Double tax treaty network | 130+ DTAAs | 90+ DTAs |
| Establishment cost | Lower | Higher |
ADDITIONAL TAX & REPORTING CONSIDERATIONS
Economic Substance Regulations
The UAE’s Economic Substance Regulations previously imposed notification, reporting and substance requirements on entities carrying on specified Relevant Activities. These requirements were cancelled for financial years ending after 31 December 2022, following the introduction of the UAE Corporate Tax regime.
Accounts and annual compliance
A foundation should not be regarded as a “no filing” or “no compliance” vehicle. DIFC and ADGM Foundations are subject to ongoing accounting, record-keeping and regulatory requirements, although the precise obligations differ between the two jurisdictions and according to the circumstances of the foundation.
Common Reporting Standard (CRS)
The UAE participates in the Common Reporting Standard, under which financial account information is exchanged with participating jurisdictions.
A foundation’s CRS classification depends on its particular circumstances. It may, for example, qualify as an Investment Entity and therefore a Financial Institution, or be classified as an Active or Passive Non-Financial Entity. The classification can affect the information collected and potentially reported in relation to the foundation and persons connected with it.
UAE Double Tax Treaty Network
The UAE has concluded 137 Double Taxation Agreements, giving it one of the region’s broadest treaty networks.
Treaty considerations can become relevant where a DIFC or ADGM Foundation forms part of a cross-border structure — for example, where it holds Indian company shares, interests in Luxembourg or Mauritius structures, Singapore investments, overseas real estate or other international assets.
A NOTE ON TAX ADVICE
Legability provides legal documentation and legal structuring advice in relation to foundation structures. References to tax, CRS and treaty considerations on this page identify issues that may need to be considered when designing a structure; they do not constitute tax advice.
The tax treatment of a foundation will depend on its activities, assets and income, as well as the tax residence and circumstances of its founder, beneficiaries and other relevant persons. Where specialist tax advice is required, we work alongside the client’s tax advisers or coordinate with appropriately qualified advisers as part of the wider structuring process.
Structure It Correctly from the Start
The fiscal transparency election is only available to a correctly structured qualifying foundation.
We draft the Charter and By-Laws, and MD 261 compliance materials from day one.
Read the full MD 261 guide → | Download the MD 229 clarification guide →
USE CASES
Who Uses a DIFC or ADGM Foundation — and What Their Documents Need
Intro: Foundation structures become more complex when families, assets and beneficiaries cross jurisdictions. These six scenarios illustrate how different circumstances can produce very different documentation and governance requirements.
USE CASE 1
Indian Entrepreneur: Dubai Property and India Operating Company
Dubai resident with Dubai property and an India operating company via HUF; children in India and the UK.
- DIFC Foundation Charter
- By-Laws for cross-border succession, residency and reporting
- Dubai property transfer (0.125% DLD fee rate)
- Letter of Wishes for each child
Jurisdiction: DIFC Foundation
USE CASE 2
GCC Family: Multi-Generational Sharia-Informed Wealth
GCC family with assets across multiple countries seeking Sharia-informed governance for three generations.
- DIFC Foundation Charter (Sharia-informed)
- Family constitution in By-Laws
- Sub-council provisions for business divisions
- Guardian appointment instrument
- Letter of Wishes for each family branch
- Cross-GCC asset schedule
Jurisdiction: DIFC Foundation
USE CASE 3
UK Expat: Dubai Real Estate and European Assets on Relocation
Relocating from London to Dubai with Dubai property, UK pension and a French investment portfolio.
- ADGM Foundation Charter & By-Laws
- Firewall-style provisions for foreign claims
- Dubai property transfer (0.125% DLD fee rate)
- Letter of Wishes for French heirs
- UK pension kept outside the foundation
Jurisdiction: ADGM Foundation
USE CASE 4
Tech Founder: Digital Assets and Venture Investments
Tech founder with digital assets, fintech equity and venture fund interests.
- Digital asset governance protocol
- DIFC or ADGM Foundation Charter
- By-Laws for digital assets & investments
- Letter of Wishes
Jurisdiction: ADGM Foundation
USE CASE 5
European Family Office: MEASA Assets and Cross-Border Structures
European family office with assets in MEASA coordinated with Luxembourg and Mauritius structures.
- Apex Foundation Charter
- Cross-jurisdictional By-Laws
- Governance & reporting provisions
- Asset schedule & structure map
Jurisdiction: DIFC Foundation
USE CASE 6
GCC Family Business: Three Generations, Multiple Businesses
GCC family business group with multiple companies and complex succession needs.
- Bespoke Foundation Charter
- Sub-councils for each business division
- Guardian instrument with broad powers
- Family governance policy
- Letter of Wishes
Jurisdiction: DIFC Foundation
THE SETUP PROCESS
From First Conversation to Registered Foundation
For reference, here is how the full foundation process works — covering both the 10 Leaves CSP role and the Legability legal documentation role.
Step 1
Initial Consultation
We understand your asset profile, family structure, succession intentions and jurisdictional considerations. We advise on DIFC vs ADGM and the governance approach before any documents are drafted.
Owner: Rohit Ghai / Samra Noor
Owner: Rohit Ghai / Samra Noor
Step 2
KYC and AML Documentation
All parties — founder, proposed council members, Guardian (if applicable) and beneficiaries — must provide identity documents, proof of address and source of wealth documentation. We coordinate the KYC process and prepare the submission package..
Owner: 10 Leaves (CSP)
Owner: 10 Leaves (CSP)
Step 3
Charter and By-Laws Drafting
Legability drafts the Charter and By-Laws based on the structuring discussion. A first draft is circulated for review — typically within 5–7 business days of receiving complete instructions. We go through one to two rounds of revision before documents are finalised.
Owner: Samra Noor / Santanu Ghosh (Legability)
Owner: Samra Noor / Santanu Ghosh (Legability)
Step 4
Letter of Wishes (where applicable)
Drafted in parallel with the By-Laws. The Letter of Wishes is a private document — it is not filed with any authority — but it must be consistent with the Charter and By-Laws before both are finalised.
Owner: Legability
Owner: Legability
Step 8
Registration and Bank Account
On final approval, the Certificate of Registration is issued. Bank account opening (where required) can proceed — 10 Leaves assists with banking introductions and KYC submission. .
Owner: 10 Leaves (CSP)
Owner: 10 Leaves (CSP)
Step 7
Review and Approval
DIFC ROC: typical approval timeline 1–3 weeks from complete submission. ADGM RA: comparable timeline, sometimes faster administrative processing. Queries from the registrar are handled by Legability (legal) and 10 Leaves (CSP) jointly.
Owner: Both
Owner: Both
Step 6
DIFC ROC or ADGM RA Submission
The Charter, KYC package and supporting documents are submitted to the DIFC Registrar of Companies or ADGM Registration Authority.
Owner: 10 Leaves (CSP) + Legability (legal documents)
Owner: 10 Leaves (CSP) + Legability (legal documents)
Step 5
Registered Address and CSP Appointment
10 Leaves provides the registered address and acts as the Registered Agent (DIFC) or Licensed CSP (ADGM — mandatory for non-exempt foundations). The CSP appointment document is prepared and executed.
Owner: 10 Leaves (CSP)
Owner: 10 Leaves (CSP)
THE LEGABILITY APPROACH
Legal drafting and foundation administration, built to work together
10 Leaves is a Corporate Service Provider in both DIFC and ADGM. Legability provides the legal documentation capability within the group. Together, this creates a coordinated approach to foundation establishment, legal drafting and ongoing administration.
The Charter and By-Laws are drafted with an understanding of how the foundation will actually operate: how decisions will be made, how powers will be exercised, how beneficiaries will be treated and how the structure will be administered over time.
01
We draft for when the structure is tested
A foundation is rarely tested when everyone agrees. It is tested when the founder loses capacity, the council cannot agree, beneficiary status is challenged, a cross-border succession issue arises, or an asset requires a decision the documents did not anticipate.
Our drafting therefore tests the governance framework against five core scenarios: founder incapacity, council deadlock, disputed beneficiary status, cross-border succession challenge and asset-specific governance failure.
The documents should provide answers when the structure is under pressure — not only when everything goes according to plan.
02
Cross-border capability, coordinated through one team
Foundation structures rarely stop at the UAE border. Our wider team brings experience across UAE foundation and succession matters, India-linked succession and HUF structures, Luxembourg and European structures, Mauritius, and digital assets and virtual-asset regulation.
Where a foundation interacts with an Indian family structure, a Luxembourg investment vehicle, a Mauritius company, European assets or digital-asset holdings, those considerations can be incorporated into the structuring and drafting process from the outset.
Where jurisdiction-specific advice is required, we coordinate with appropriately qualified local or specialist counsel so that the different legal layers are considered together rather than in isolation.
03
Bespoke. Not templated.
We do not start with a standard form and insert your name. We start with the structure.
Before drafting begins, we map the founder’s objectives, reserved powers, council composition, beneficiary framework, asset profile, succession intentions, incapacity arrangements, distribution mechanics and relevant cross-border considerations.
The Charter, By-Laws, Letters of Wishes and supporting governance documents are then drafted around those requirements — with provisions tailored to the assets, people and jurisdictions the foundation is intended to serve.
OUR FOUNDATION PRACTITIONERS
Meet the Team
Rohit Ghai
Director
Rohit oversees the overall structuring discussion at the outset of every foundation engagement — jurisdiction selection, governance design, the relationship between the foundation and any underlying fund, operating company or cross-border holding structure. With over twenty years of experience in regulatory authorisations, fund structuring and market entry across the UAE and GCC, he provides the commercial context within which the legal documents are drafted.
Bishr Shiblaq
Partner, Luxembourg
Bishr established and headed the MENA office of Arendt & Medernach — Luxembourg's leading law firm — for approximately ten years. He is Legability's lead for foundation documents that must coexist with Luxembourg structures (SIF, RAIF, SCSp, SOPARFI) or that require European succession law analysis, including French, German and Belgian forced heirship interactions. For GCC family offices and European families building a Luxembourg-UAE or Luxembourg-UAE-Mauritius holding stack, Bishr provides the cross-jurisdictional document coordination that would otherwise require instructing three separate firms in three countries.
Santanu Ghosh
Partner, India and Disputes
Santanu brings twenty years of experience in international corporate documentation and litigation across India and the UAE. He is the lead practitioner for foundation documents requiring interaction with Indian succession law, HUF structures, the Indian Succession Act 1925 and the India-UAE legal corridor. He also advises on DIFC-LCIA, ICC and DIAC arbitration, DIFC Courts proceedings and commercial disputes — making him the natural lead where a foundation governance question escalates into a dispute requiring formal legal resolution.
Sachin Auchoybur
Partner, Mauritius
Sachin has over fourteen years of experience in Common Law and Mauritian law, with a particular focus on fund and holding company structuring. He is the lead practitioner for foundation structures that include a Mauritius layer — whether a Global Business Corporation (GBC) a Mauritius fund vehicle, or a Protected Cell Company. He holds membership of both the Bar of England and Wales and the Mauritius Bar Association — a rare dual qualification that gives Legability direct practitioner standing in both common law systems simultaneously.
Andal Seshadri
Legal Counsel, Digital Assets and Virtual Assets
Where a foundation holds digital assets- Bitcoin, Ethereum, tokenised securities or other virtual assets, Andal leads the regulatory and structuring overlay. She advises on the VARA, DFSA, FSRA, CBUAE and CMA regulatory frameworks as they apply to virtual asset custody within foundation structures, on digital asset governance provisions in By-Laws, and on the interaction between the UAE's virtual asset regulatory landscape and the foundation's investment policy. Her involvement is standard on any ADGM Foundation engagement where digital assets form a material part of the asset base.
Samra Noor
Legal Counsel, Corporate and Commercial
Foundation governance and succession structures are a primary focus of Samra's practice at Legability. She advises on DIFC and ADGM foundation establishment, Charter and By-Laws drafting, beneficiary structure design, private wealth succession planning, and ongoing foundation governance. Samra also advises on SPV and Prescribed Company formations, Central Bank of UAE licensing, and corporate structuring across DIFC, ADGM, UAE mainland and free zones. She is an Associate Member of the Chartered Institute of Arbitrators (ACIArb).
FAQ
Frequently Asked Questions
What is a DIFC Foundation and how does it differ from a trust?
A DIFC Foundation is a separate legal entity established under the DIFC Foundations Law. It has its own legal personality, can own assets in its own name, enter into contracts, and sue or be sued. It has no shareholders and is governed through its Charter, By-Laws and Council.
A trust is different. It is generally a legal relationship under which trustees hold and administer assets for beneficiaries or specified purposes, rather than a separate incorporated legal person.
Foundations can be particularly attractive to families accustomed to civil-law structures, as well as founders who want legal personality combined with a clearly documented governance and succession framework.
What is the difference between a DIFC Foundation and an ADGM Foundation?
Both DIFC and ADGM offer sophisticated common-law-based foundation regimes, but there are differences in their legal frameworks, governance requirements, administration and interaction with underlying assets.
ADGM directly applies English common law and principles of equity, subject to applicable ADGM enactments, while ADGM Foundations are specifically governed by the ADGM Foundations Regulations. DIFC operates its own common-law legal system and Foundations Law.
The two regimes also differ in areas such as the role of the Guardian, CSP requirements and certain administrative procedures. The appropriate jurisdiction should therefore be selected around the founder, assets, beneficiaries and intended governance arrangements rather than simply on establishment cost.
10 Leaves operates as a Corporate Service Provider across both DIFC and ADGM, allowing the two regimes to be considered together before a jurisdiction is selected.
What must a DIFC Foundation Charter contain?
The DIFC Foundations Law prescribes minimum information that must be contained in the Charter, including the Foundation’s name, objects, initial capital and, where applicable, its duration, together with the required founder declaration.
The statutory minimum, however, is only the starting point.
Depending on the structure, the Charter and By-Laws can be used to establish the founder’s reserved powers, Council governance, beneficiary framework, distribution mechanics, amendment provisions, succession arrangements, incapacity procedures, Guardian oversight and other controls.
For a private-wealth or family-governance structure, the important question is therefore not simply what the law requires the Charter to contain, but what the documents need to make the Foundation work as intended.
What powers can the founder retain in a DIFC Foundation?
A DIFC Foundation can be designed so that the founder retains significant influence over the structure during their lifetime.
Depending on the arrangements adopted, reserved powers may address matters such as the appointment and removal of Council members or a Guardian, amendments to constitutional documents, changes to beneficiaries, specified distributions, significant asset disposals and, where permitted and appropriately structured, termination of the Foundation.
The extent of those powers requires careful consideration. Founder control can be commercially and personally important, but the powers retained may also be relevant to the Foundation’s succession, asset-protection, tax and cross-border analysis.
The objective is therefore not necessarily to give the founder maximum control, but to give them the right control for the structure being created.
What is the role of the Guardian in a DIFC or ADGM Foundation?
A Guardian provides an additional layer of oversight over the Foundation and its Council.
The constitutional documents can define the Guardian’s powers and identify matters requiring Guardian involvement or approval. Depending on the structure, these can include oversight of specified Council decisions, changes to governance arrangements and other reserved or protected matters.
The position differs between DIFC and ADGM. In ADGM, a Guardian must be appointed where there is no surviving Founder, while appointment is optional while a Founder survives.
For multigenerational structures, the Guardian provisions should be designed alongside the Council and founder-reserved powers so that the governance framework continues to function after the founder’s death or incapacity.
Can a DIFC Foundation hold Dubai real estate?
Yes. A DIFC Foundation can be used as part of a structure for holding qualifying Dubai real estate, subject to Dubai Land Department requirements and the nature and location of the property.
DIFC and the Dubai Land Department have established arrangements facilitating the registration of property interests held through DIFC entities and structures. Certain qualifying transfers may be eligible for preferential DLD fee treatment, subject to the applicable conditions, documentation and DLD’s determination.
Property should therefore be reviewed before it is transferred into the Foundation. The legal documentation, Foundation ownership structure and DLD transfer process need to be considered together, particularly where the property forms part of a wider succession or family-wealth plan.
How is a DIFC or ADGM Foundation treated for UAE Corporate Tax?
The Corporate Tax treatment of a Foundation depends on its purpose, activities, assets and circumstances.
The UAE Corporate Tax framework contains specific provisions under which a qualifying Family Foundation may apply to be treated as an Unincorporated Partnership for Corporate Tax purposes, subject to satisfying the applicable conditions. Ministerial Decision No. 261 of 2024 contains further provisions relevant to Family Foundations and structures involving entities wholly owned and controlled by them.
This treatment should not be interpreted as an automatic guarantee that a Foundation, founder or beneficiary will pay no tax. The outcome depends on the particular structure, income, activities and the tax position of the persons involved, including any relevant foreign tax rules.
Corporate Tax treatment should therefore be considered alongside the legal structure, with specialist tax advice obtained where appropriate.
Can a DIFC or ADGM Foundation hold cryptocurrency and digital assets?
A Foundation can be structured to hold digital assets, subject to its constitutional documents, the nature of the assets, custody arrangements and applicable regulatory requirements.
Where digital assets form a material part of the Foundation’s wealth, standard investment provisions may not be enough. The governance documents can address matters such as custody and signing authority, permitted asset classes, disposal thresholds, staking or other permitted activities, emergency decision-making, access arrangements, and what happens to digital-asset authority following the founder’s death or incapacity.
The relevant issue is not simply whether a Foundation can own Bitcoin, Ethereum or tokenised assets. It is whether its documents establish a governance framework capable of dealing with assets that trade continuously, can move rapidly and may depend on specialised custody and access arrangements.
How can an NRI or Indian family use a DIFC or ADGM Foundation for succession planning?
A UAE Foundation can form part of the succession and wealth-holding arrangements of an NRI or Indian family, particularly where the family owns assets across India and the UAE or where beneficiaries live in multiple jurisdictions.
UAE assets — such as company shares, investment portfolios and qualifying real estate — may be capable of being held through the Foundation. Indian assets require separate analysis before being incorporated into, or held alongside, the structure.
That analysis can involve the type and situs of the asset, existing ownership arrangements, HUF interests where relevant, applicable Indian succession or personal law, exchange-control considerations and the residence of the founder and beneficiaries.
The Foundation documents can then be designed around the resulting ownership and succession structure, with Indian legal and tax advice coordinated where required.
What are the ongoing compliance requirements for a DIFC Foundation?
A DIFC Foundation is not a “set up and forget” structure.
It is subject to ongoing accounting, record-keeping, regulatory and administrative requirements. Depending on its circumstances, additional obligations may arise under the UAE Corporate Tax and CRS regimes, AML and beneficial-ownership requirements, or from the nature of its underlying assets and interests.
The precise filing and accounting requirements should be determined by reference to the rules in force for the relevant financial year and the circumstances of the Foundation.
Where 10 Leaves acts as CSP or administrator, ongoing compliance is incorporated into the administration of the Foundation rather than treated separately from the structure itself.
Can an overseas foundation be redomiciled or continued into the DIFC?
The DIFC Foundations Law provides a mechanism through which a qualifying foreign foundation may continue into the DIFC, subject to the applicable requirements of both the outgoing jurisdiction and DIFC.
This can be relevant where a family already has an overseas foundation but wishes to place the structure within the UAE’s legal and private-wealth environment without necessarily establishing an entirely new vehicle and transferring every asset individually.
A continuation requires careful coordination between the outgoing and incoming jurisdictions, including review of the existing constitutional documents, approvals, asset arrangements and any tax or regulatory consequences.
Is there a minimum amount of wealth required to establish a DIFC Foundation?
The DIFC Foundations Law requires the Charter to identify the Foundation’s initial capital, but the decision to establish a Foundation should not be driven solely by a statutory minimum amount.
The more important question is whether the family’s assets, succession requirements, governance needs and intended duration of the structure justify a Foundation.
A Foundation may begin with initial capital and receive additional assets after establishment. Those assets can potentially include company interests, investment portfolios, real estate and other property, subject to the applicable transfer, ownership and regulatory requirements.
The initial contribution and subsequent asset transfers should therefore be designed as part of the overall structure rather than treated simply as an incorporation formality.
RELATED SERVICES
Related Practice Areas
FAQ
Frequently Asked Questions
10 Leaves is a Corporate Service Provider in both DIFC and ADGM. Legability provides the legal documentation capability within the group. Together, this creates a coordinated approach to foundation establishment, legal drafting and ongoing administration.
The Charter and By-Laws are drafted with an understanding of how the foundation will actually operate: how decisions will be made, how powers will be exercised, how beneficiaries will be treated and how the structure will be administered over time.
Samra Noor
Legal Counsel, Corporate & Commercial
DIFC Foundations · ADGM Foundations · Charter & By-Laws Drafting · Succession Structures · SPVs