What a DIFC or ADGM foundation is, and how it differs from a trust and a holding company

A foundation in the Dubai International Financial Centre or the Abu Dhabi Global Market is an entity with legal personality of its own. The DIFC Foundations Law states that a foundation is a body corporate with a legal personality separate from that of its founder and any other person, and that it has the capacity, rights and privileges of a natural person (Articles 10(1) and 10(2)). The ADGM Foundations Regulations reach the same position: with effect from the date of registration stated in the certificate of registration, the foundation is a legal entity having separate legal personality and may sue and be sued (section 3(5)).

Two features separate a foundation from entities a family will have met before. It has no shareholders and no share capital. What a person may hold instead is such rights in respect of the foundation as its by-laws provide, assignable only if the by-laws so provide (DIFC Articles 10(4) to 10(6)). And the assets it holds are its own. The DIFC law states that the property of a foundation is not held by it upon trust for any other person (Article 10(3)), and that a founder does not have any interest in a foundation by virtue only of endowing it with its initial capital or further property (Article 27(4)).

The constitution comprises two documents:

• The charter, filed on establishment. In the DIFC it must contain the name, the objects, a description of the initial capital, the duration if the foundation is to subsist for a limited period only, and a declaration by each founder requesting the council to comply with its terms (Article 19(2)). In the ADGM it must also carry provisions for the establishment of a council, the name of a designee who becomes a beneficiary only where there is no other beneficiary, and the registered office address (section 9(2)).
• The by-laws, which carry the working detail. In the DIFC they must prescribe the functions of the council and the procedures for appointing, resigning and removing council members and any guardian (Article 20(1)). In the ADGM those matters must be set out in the by-laws where they are not in the charter (section 11(2)). Under DIFC Article 20(4), where the charter contains all the matters in Articles 20(1) and 20(2), a foundation need not have any by-laws.

A council administers the foundation; both regimes require at least two council members (DIFC Article 22(2); ADGM section 19(1)). A guardian supervises the council in defined circumstances: in the DIFC where the foundation has a charitable object or a specified non-charitable object (Article 23(1)), and in the ADGM once there is no surviving founder (section 26(1)).

The difference from a trust lies in what holds the asset. Under the DIFC Trust Law a trust comes into existence by an instrument in writing (Article 33(2)), and is created where, among other conditions, the trustee holds or has vested in him or it property for the benefit of a beneficiary or for a purpose (Article 34(1)). Title sits with the trustee. A foundation holds and contracts in its own name.

The difference from a holding company lies in ownership and in permitted activity. A holding company has shareholders holding transferable shares carrying economic and usually voting rights; a foundation has neither. DIFC Article 12(5) provides that a foundation may not carry out any commercial activities except those necessary for, and ancillary or incidental to, its objects, a restriction expressed as applying to the activities of the foundation itself. In the ADGM the objects must include the management of the foundation's assets and income and their distribution by the council in accordance with its charter (section 2(2)).

On registry figures, the ADGM requires the charter to commit the foundation to initial assets with a value of 100 US dollars or the equivalent (section 13), with name reservation at 200 US dollars and registration at 300 US dollars under the Foundations Regulations (Fees) Rules 2025. The DIFC sets registration at nil and most notifications at 100 US dollars (Schedule 3, Part 2), and a foundation must hold a licence pursuant to Article 9 of the Operating Law (Article 17(7)). Licence fees under the Operating Law, and legal and administration costs, sit outside those figures.

Sources, all retrieved 11 August 2026:

• DIFC Foundations Law, DIFC Law No. 3 of 2018, Consolidated Version No. 2, 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 2017, consolidated version January 2025: https://en.adgm.thomsonreuters.com/sites/default/files/net_file_store/ADGM1547_19329_VER01012025.pdf
• ADGM Foundations Regulations (Fees) Rules 2025: https://en.adgm.thomsonreuters.com/sites/default/files/net_file_store/ADGM1547_27653_VER01012025.pdf
• DIFC Trust Law, DIFC Law No. 4 of 2018: https://edge.sitecorecloud.io/dubaiintern0078-difcexperie96c5-production-3253/media/project/difcexperiences/difc/difcwebsite/documents/difc_docs/trust_law_difc_law_no_4_of_2018.pdf?sc_lang=en

This content is written with law firms and is educational only. A family should take its own advice on its own facts. Nothing here has been verified or endorsed by the programme as suitable for any family or any structure.