Foundations

What is a DIFC Foundation?

A foundation in DIFC is a legal entity governed by the DIFC Foundations Law, DIFC Law No. 3 of 2018. Unlike trusts, a foundation has a separate legal personality, making it an ideal vehicle for asset protection, estate planning, and charitable ventures.

Key Requirements for Setting Up a Foundation in DIFC

To establish a foundation in DIFC, the following conditions must be met:

A minimum of one founder is required.

At least two council members must be appointed to manage the foundation.

The foundation must maintain a registered office in DIFC.

The foundation cannot engage in commercial activities, except those necessary or incidental to its objectives.

If the foundation has charitable or specified non-charitable objects, it must appoint a guardian.

Steps to Set Up a DIFC Foundation

1. Initial Approval

Before registration, the entity must go through an initial approval process:

Select “Non-Financial” as the entity type and “Foundation” as the business sector.

The foundation can be set up for benefiting specific individuals, charitable causes, or other non-charitable purposes. The foundation's name must be unique. If it resembles an existing entity, evidence of relationship or consent is required.

Appoint Founders and Council Members with passport certifications and CVs required for individuals or certificate of incorporation, if a registered entity.
Appointing a Gaurdian and Registered Agent is optional.
Submit Government Authority Approval. If the foundation is exclusively charitable, federal or governmental approval must be obtained.

Founder	The individual/entity that establishes the foundation and contributes assets.
Council	Manages the foundation and ensures compliance with its charter.
Guardian (Optional)	Supervises the council to ensure adherence to the foundation’s objectives.
Beneficiaries	Individuals or entities who benefit from the foundation’s assets.

2. Register with DIFC

Once initial approval is granted, a standard or customized charter must be prepared and filed. If a registered agent is appointed, by-laws may not be required. Additional steps to register a DIFC Foundation include:

Confirming the registered address
Appointing at least one Authorised Signatory
Providing Data Protection Notification if the foundation deals with personal data as per Data Protection requirements.
Management Details
Applying for an Establishment Card if the foundation is required to hire employees

Documents required for submission include the Charter, Resolution of Founders (required for Body Corporate Founders only) and Personnel Sponsorship Agreement (if Establishment Card is required).

Key Features of DIFC Foundations

Unlike trusts, a foundation is a legally recognised entity capable of holding assets in its own name.
Assets held within a foundation are safeguarded against creditors, claims, and legal disputes.
Efficient Succession & Estate Planning
Tax Effective
Suitable for private wealth management, corporate structuring, philanthropic endeavors, and investment oversight.

Sovereign PPG can support you with setting up a foundation in DIFC. Email Dubai@SovereignGroup.com for more information and guidance with your foundation set up.