UAE Foundation Setup: DIFC, ADGM & RAKICC Asset Protection Compared

Why UAE Foundations Are Replacing Traditional Estate Planning

An estimated $1 trillion in assets will transfer to the next generation across the GCC by 2030. For high-net-worth families, the question is no longer whether to create a succession structure, but which UAE jurisdiction offers the right balance of asset protection, privacy, and flexibility. Foundations have emerged as the preferred vehicle, combining the control of a company with the wealth preservation benefits of a trust.

The UAE offers three foundation regimes: in Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), and Ras Al Khaimah International Corporate Centre (RAKICC). Each operates under English common law principles and provides independent legal personality separate from the founder. Unlike trusts where a trustee holds assets on behalf of beneficiaries, a foundation owns assets directly in its own name. This distinction matters for families seeking clearer ownership structures, reduced complexity, and protection from forced heirship rules that might otherwise apply under UAE federal law.

This guide examines the practical differences across all three jurisdictions: governance requirements, property ownership capabilities, privacy protections, tax implications, and the specific use cases where each foundation type performs best. We'll help you determine which structure fits your wealth protection and succession planning objectives.

What Is a UAE Foundation?

A UAE foundation is a corporate body with its own legal personality, created to hold and manage assets for specified purposes. Unlike companies, foundations have no shareholders. Unlike trusts, foundations own assets directly rather than through a trustee arrangement. This hybrid structure provides the governance clarity of a corporation with the wealth protection benefits typically associated with trusts.

The founder establishes the foundation by transferring assets and defining its objectives through a Charter. A Council (minimum two members across all UAE jurisdictions) manages the foundation's affairs, similar to a board of directors. Beneficiaries - called "qualified recipients" in RAKICC terminology - receive distributions according to the Charter and By-Laws. A Guardian may be appointed to oversee the Council's compliance with the founder's wishes.

Foundations can hold nearly any asset class: real estate, company shares, investment portfolios, bank accounts, artwork, intellectual property, and personal chattels. The assets become the foundation's property, creating separation from the founder's personal estate. This separation provides protection against creditors, simplifies succession, and allows wealth to continue across generations without probate proceedings.

DIFC Foundations: Dubai's Premier Wealth Structure

DIFC introduced its foundation regime under Law No. 3 of 2018, with amendments in 2022 and 2024 enhancing the framework. Operating within Dubai's established financial centre, DIFC foundations benefit from the jurisdiction's international recognition, direct access to DIFC Courts, and a Memorandum of Understanding with the Dubai Land Department for property ownership.

Structure and Requirements

A DIFC foundation requires minimum one founder (individual or corporate) and a Council of at least two members. The founder can serve on the Council. A Guardian is mandatory if the foundation has charitable purposes or specified non-charitable objectives. Neither the founder nor Council members need UAE residency. The foundation must maintain a registered office in DIFC, which can be satisfied through a registered agent.

DIFC foundations operate through two governing documents: the Charter (which sets objectives, assets, duration, and fundamental rules) and the By-Laws (which detail governance procedures, Council powers, and distribution mechanisms). Initial capital can be as low as USD 100, with no minimum paid-up requirement. DIFC is the only UAE jurisdiction permitting conversion of an existing company into a foundation.

Property Ownership and Tax Benefits

DIFC foundations can own freehold property in designated areas of Dubai under the MoU with the Dubai Land Department. This capability makes DIFC particularly attractive for families holding multiple Dubai properties who want unified ownership and succession planning. The foundation can purchase, hold, and transfer property without requiring probate proceedings upon the founder's death.

Following Ministerial Decision No. 261 of 2024, qualifying family foundations may be exempt from UAE corporate tax. This update enhanced the tax efficiency of DIFC foundations for wealth management purposes. Foundations do not fall within the scope of Economic Substance Regulations, reducing compliance obligations.

Unique Features

DIFC foundations can issue depository certificates representing the value of contributed assets, a feature unique among UAE jurisdictions. The regime specifically provides for arbitration as alternative dispute resolution. DIFC permits exclusively charitable foundations (ADGM does not, though both require Guardians for charitable objects). Annual accounts must be prepared per international standards and filed with the Registrar within 30 days of approval.

ADGM Foundations: Abu Dhabi's Privacy-Focused Alternative

ADGM launched the UAE's first foundation regime in 2017, positioning Abu Dhabi as a pioneer in common law wealth structures. The jurisdiction has attracted regional families and international high-net-worth individuals seeking a balance of confidentiality and regulatory credibility. ADGM's digital-first registration process typically completes in 3-5 working days.

Structure and Requirements

ADGM requires minimum one founder and a Council of at least two members. A registered agent must be appointed unless the applicant qualifies for exempt status. Exempt applicants include entities with substantial UAE assets and operations, UAE-licensed or regulated entities, or companies traded on UAE or ADGM regulated markets. Most private wealth foundations will require a Corporate Service Provider.

The minimum endowment is USD 100, similar to DIFC or RAKICC. At least one signatory must be a UAE resident - a requirement that can be satisfied through nominee services. The foundation's registered office must be within the ADGM jurisdiction (Al Maryah or Al Reem Island in Abu Dhabi).

Privacy Protections

ADGM offers enhanced confidentiality. the foundation's name remains confidential in ADGM, whereas in DIFC the name of the foundation is publicly available. The By-Laws, which contain beneficiary details and governance specifics, remain private and are only disclosed to the Registrar upon request by relevant authorities.

ADGM is the only UAE foundation regime with no ongoing annual requirement to file or audit accounts unless specifically requested by the Registrar. Accounting records must be maintained but need not be submitted routinely. This reduced disclosure burden appeals to families prioritizing discretion.

Property Ownership

ADGM foundations can own real estate in designated areas of Abu Dhabi. For Dubai property ownership, ADGM foundations face additional complexity compared to DIFC or RAKICC structures. Families with primary property holdings in Dubai may find DIFC or RAKICC more straightforward for real estate purposes, while those focused on Abu Dhabi assets will find ADGM well-suited.

RAKICC Foundations: The Efficient Option

RAKICC introduced its foundation regime under the RAK ICC Foundations Regulations 2019, becoming the fastest-growing foundations registrar in the Middle East. The jurisdiction combines competitive pricing with access to both DIFC and ADGM courts for dispute resolution - a choice unavailable in the other two regimes.

Structure and Requirements

RAKICC requires minimum one founder and a Council of at least two members, consistent with DIFC and ADGM. The founder can be an individual or corporate body and may serve as a Council member or Guardian. A Guardian is mandatory for charitable or specified non-charitable purposes. All foundations must engage a registered agent - there is no exempt applicant category.

The minimum capital requirement is only USD 100, the lowest among UAE foundation jurisdictions. Registration completes in approximately three working days after document submission. The regulatory framework follows the British Virgin Islands model rather than direct English common law application, though founders can choose either DIFC or ADGM courts for dispute resolution.

Property Ownership in Dubai

RAKICC foundations can own property in designated freehold areas of both Dubai and Ras Al Khaimah. The jurisdiction's relationship with the Dubai Land Department, established through the 2019 MoU covering RAKICC entities generally, extends to foundations. For families seeking Dubai property ownership through a foundation at lower cost than DIFC, RAKICC provides a viable path.

Privacy and Compliance

RAKICC maintains no public register relating to foundations - information on founders, Council members, and beneficiaries remains confidential per applicable laws. There is no requirement to file or audit accounts, though the registered agent must maintain accounting records at the registered office. These records are not subject to public disclosure. The regime remains subject to RAKICC AML requirements.

Direct Comparison: Choosing Your Foundation Jurisdiction

Minimum Capital and Costs

RAKICC requires the lowest initial capital at USD 100, followed by ADGM and DIFC at USD 100 with no mandatory paid-up amount. Professional fees for charter drafting, registered agent services, and ongoing administration should be factored separately.

Privacy and Disclosure

ADGM and RAKICC offers the strongest privacy protections: Council member identities are confidential, and there is no routine filing of accounts. RAKICC maintains no public register of foundation participants. DIFC requires annual account filing and makes name information available. All jurisdictions keep beneficiary details confidential.

Property Ownership

For Dubai property, DIFC offers the most established path through its long-standing DLD relationship. RAKICC provides equivalent Dubai property rights at lower cost. ADGM is best suited for Abu Dhabi property holdings. All three jurisdictions allow foundations to hold international assets, shares, and investment portfolios.

Court Access and Legal Framework

DIFC and ADGM each provide access to their respective common law courts. RAKICC uniquely offers founders a choice between DIFC Courts and ADGM Courts for dispute resolution. ADGM directly applies English law as a fallback, while DIFC has its own laws with English law as persuasive authority. All three jurisdictions conduct proceedings in English.

Which Foundation Jurisdiction Fits Your Needs?

Choose DIFC if: You hold or plan to acquire Dubai property, want the established credibility of Dubai's premier financial centre, need the ability to convert an existing company into a foundation, or require the option to issue depository certificates. DIFC suits families who value institutional recognition and thorough succession planning for Dubai-based assets.

Choose ADGM if: Privacy is paramount, you prefer minimal filing obligations, your property holdings are in Abu Dhabi, or you want direct English law application. ADGM works well for families seeking the strongest confidentiality protections and those comfortable with the higher minimum endowment requirement.

Choose RAKICC if: Setup efficiency is a priority, you want Dubai property ownership at lower setup costs, you prefer to choose your dispute resolution court, or you need the fastest registration timeline. RAKICC suits families seeking proven wealth protection structures without premium financial centre pricing.

How We Structure UAE Foundations

Our team advises families on the appropriate foundation jurisdiction based on their asset profile, privacy requirements, and succession objectives. We draft customized Charters and By-Laws that reflect the founder's specific wishes while ensuring compliance with the applicable regulations. We coordinate with registered agents, manage the registration process, and provide ongoing advisory support.

For clients with Dubai real estate, we structure foundations to work seamlessly with the Dubai Land Department requirements. For complex family situations involving international assets or business interests, we design governance frameworks that balance founder control with appropriate succession mechanisms.

Contact Gravity Power Management Consultancies to discuss which UAE foundation structure best protects your wealth and secures your family's future.

Article Written By:

Martin Kocher,

Investment Structuring Expert

Dubai, United Arab Emirates

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Disclaimer: Thank you for reading our article! This content is for informational purposes only and does not constitute legal, tax, or investment advice. Please consult qualified professionals for guidance specific to your situation.