Control continuity through a foundation, and what continuity does not cover

A foundation holds in its own name. The DIFC Foundations Law states it is a body corporate with a legal personality separate from that of its founder and any other person (Article 10(1)), and that a founder has no interest in it by virtue only of endowing it (Article 27(4)). The ADGM Regulations put the point positively: assets vested in a foundation are its own with full legal and beneficial title, are no longer the founder's, and are not any beneficiary's until distributed (section 32(1)). A foundation may, but need not, be established for a fixed period, and any event or period triggering its end must be in its by-laws (DIFC Article 11), so the instrument rather than a lifespan fixes its end.

What a recipient holds is also defined by the instrument. In the DIFC a qualified recipient has no right to or interest in the foundation's property other than a right to payment of amounts arising under the by-laws or a contract with it (Article 29(3)). In the ADGM no beneficiary or object has any rights in specie against the assets and, subject to the charter or by-laws, assets available for distribution are not capable of being alienated in a beneficiary's bankruptcy or liable to be seized or attached (section 34(1)).

Three features bear on how control passes over time.

• Reserved powers, which let a founder retain decision rights for a period. In the DIFC the categories are closed, each power must be detailed in full in the charter, and they lapse at the end of a natural-person founder's life, or fifty years from establishment for a legal person, notwithstanding the charter (Article 26(1) and 26(2)). In the ADGM the list at section 17 is wider, may be reserved to the founder or another person, and carries no lapse date, though any disposition of assets must still be made by resolution of councillors.
• Separation of administration from supervision. The council administers the property and carries out the objects (DIFC Article 22(1)), while a guardian takes reasonable steps to ensure it does so, may require it to account, and may be given power in the by-laws to approve or disapprove specified actions (Article 23(7) to 23(9)). A guardian may not also be a council member (Article 23(6)), and in the ADGM may not be a founder or sole beneficiary (section 26(3)).
• The by-laws, which hold the sensitive material. DIFC Article 20(2) allows them to prescribe how property may be distributed, to add or remove recipients revocably or irrevocably, to impose obligations as a condition of receipt, and to make a potential right liable to termination, restricted on alienation, or diminished on bankruptcy. Changes go to the registered agent, or the Registrar where there is none, within thirty days (Article 20(6)), not onto the register open to public inspection under Article 35.

Several things a foundation does not do are worth stating.

1. It does not settle direction. The council must conduct the foundation's affairs in accordance with its charter and by-laws and act in its best interests (DIFC Article 22(7) and 22(8)), and appointment and removal of members is left to the by-laws (Article 20(1)(b)). What the council should decide is not a question either instrument answers.
2. It does not create a family charter. Federal Decree-Law No. 37 of 2022 treats that as a separate document regulating family affairs and the family's relationship with the company, and provides that where it and the memorandum of association conflict, the memorandum applies (Articles 1 and 6(3)).
3. It does not itself fund a person who wishes to realise value. The DIFC provides that a foundation may issue securities including depository receipts representing rights to payment, while retaining full ownership of the property and any voting rights attached (Articles 30(1), 30(3) and 30(5)), and that unless the by-laws provide otherwise a right to receive payments is transferable, the by-laws being able to limit transferees (Article 31).
4. It does not override the law where the underlying asset sits. DIFC Article 13(2)(b) states that the DIFC governing law rule does not validate a disposition of immovable property outside the DIFC that is invalid under that jurisdiction's law, and Article 19(10) contemplates a charter restricting officers and recipients to nationals of a jurisdiction where property may be held only by its nationals.

Sources, all retrieved 11 August 2026:

• DIFC Foundations Law, consolidated March 2022: https://edge.sitecorecloud.io/dubaiintern0078-difcexperie96c5-production-3253/media/project/difcexperiences/difc/difcwebsite/documents/laws--regulations/foundations_law_difc_law_no_3_of_2018_consolidated.pdf
• ADGM Foundations Regulations, consolidated January 2025: https://en.adgm.thomsonreuters.com/sites/default/files/net_file_store/ADGM1547_19329_VER01012025.pdf
• Federal Decree-Law No. 37 of 2022 on Family Companies, Ministry of Economy English text: https://www.moet.gov.ae/documents/20121/0/family+company+english+version+examined+and+correcetd.pdf/5639a956-fe15-6de2-a04e-c8f8ecb6c2bf?t=1674115232919

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