At the end of June 2025, 842 foundations were registered in the DIFC, a 54 per cent year-on-year increase on DIFC's published figure. That number records use of the structure, without establishing an estate-value threshold or suitability for a particular family.
Suitability turns on the assets under consideration, whether each one can be transferred, the governance purpose, and the total cost. The question is whether a particular asset should be transferred during life to a separate legal person.
This piece is general information about UAE structures and procedure, not legal advice for a particular estate. The transfers this article describes are lifetime dispositions of property. It can engage company law, the rules of the register where an asset sits, creditor rights, and tax or reporting rules in other connected jurisdictions.
What a foundation actually is
The DIFC Foundations Law, DIFC Law No. 3 of 2018, starts with separate legal personality. Article 10(1) says: "A Foundation is a body corporate with a legal personality separate from that of its Founder(s) and any other person." Article 10(3) provides that it holds property in its own right. Under Article 27(4), a contribution of initial capital or further property alone creates no interest for the founder.
ADGM states the ownership consequence directly. Section 32(1) of the Foundations Regulations 2017 provides that assets transferred to a foundation have full legal and beneficial title in the foundation and "are no longer the property of the Founder or Subsequent Transferor". The DIFC Law reaches the ownership result through Articles 10, 27 and 28 taken together. The express statutory sentence appears in ADGM.
This distinction matters at death because an estate contains property still owned by the deceased. A completed transfer changes the owner during life. An intention to transfer, an asset list or a reference in a charter still requires the legal steps that change ownership.
The constitution has two parts. The Charter contains the name, objects and description of initial capital. The By-laws contain the operating terms, including Council functions, appointment and removal procedures, decision-making, and the terms on which property may be distributed or applied to recipients.
A DIFC foundation must have a Council of at least two members. Its core duty to act honestly, in good faith and in the foundation's best interests is fiduciary in nature. ADGM also requires at least two Councillors and imposes duties of good faith, independent judgment, reasonable care and conflict management.
The two regimes deal differently with the founder's death. In DIFC, powers reserved by a natural-person founder may last no longer than that founder's life and then lapse, regardless of the Charter's terms. The Council continues under the Charter and By-laws. In ADGM, section 26(1) requires a Guardian when no founder survives. That Guardian is appointed by the person empowered to do so by the Charter, the By-laws or otherwise in writing, and failing that a Councillor may apply to the ADGM Court.
What the foundation rules say about religion, and what they do not settle
Neither the DIFC Foundations Law nor the ADGM Foundations Regulations imposes an eligibility condition by religion on founders, Council members, Guardians, Councillors or recipients. The DIFC checklist names certified passport copies for each individual founder and Council member.
That finding concerns eligibility under these two foundation regimes and nothing wider. The sources reviewed for this article leave the onshore treatment of foundation-held assets on death unresolved. Where a person's recorded status is unclear or could be contested, that question goes to a UAE-licensed lawyer before any asset moves, because a transfer made on a premise that is later disputed is examined after a death, when the person who made it cannot explain it.
The heirship articles have defined limits
DIFC Article 15 provides that an heirship right conferred by foreign law in relation to a living person's property shall not be recognised as affecting ownership of immovable property in the DIFC or movable property wherever situated. Schedule 1 defines "Foreign Law" as any law other than DIFC law.
ADGM section 32(2) provides that a transfer to a registered foundation shall not be void, voidable or liable to be set aside by reference to a foreign rule of forced heirship or another law of a foreign jurisdiction. Section 32(3) defines that term by reference to a jurisdiction other than ADGM.
The definitions set the limit. Each provision addresses foreign law as defined by the enacting jurisdiction. Each addresses "the Court", defined in the relevant instrument as the DIFC Courts or ADGM Courts.
The official sources reviewed leave the onshore court's treatment of a foundation-held asset unresolved. The foundation statutes and registry materials address their own courts, while the Dubai Land Department materials address the asset register. What is established is when the question can arise, which is later, in a proceeding where ownership or the transfer is disputed. Which forum decides it, and on what test, is not established by any source reviewed.
DIFC also preserves the law of the place where an asset sits. Article 13(2)(b) says the DIFC choice-of-law provision does not validate a disposition of immovable property outside the DIFC when that disposition is invalid under the law of that place. Article 13(2)(d) also preserves foreign law when deciding whether the founder owned the transferred property in the first place.
The Funding Test
The Funding Test is a document-based review of an existing structure or a proposal. Each answer should appear in the Charter, By-laws, asset register, transfer documents, service agreements or relevant public register.
- Was the asset transferred and, where required, registered in the foundation's name? ADGM section 32(1) applies to assets transferred to or otherwise vested in the foundation. DIFC Article 28 defines foundation property as initial capital, further endowments accepted by the Council, investment proceeds and property acquired by the Council. An asset schedule records an intention. Ownership follows the legally effective transfer.
- May this foundation own that asset where it sits? DIFC Article 19(10) anticipates property that may be held only by a national of a jurisdiction or subject to nationality-related conditions. The Charter may contain terms enabling compliance. The asset's own register remains relevant.
- Which assets remain outside? Prepare a separate list of every personal asset. Those assets remain in the founder's estate and follow the succession rules applicable to them.
- Who serves on the Council, and how are replacements appointed? Record the names, appointment powers, removal powers, voting rules and replacement mechanism in the governing documents. The statutory duties continue as office-holders change.
- How will recurring costs be paid? Identify the source for licence renewal, registered office, any required service provider, administration, and any Council remuneration agreed under the governance arrangement. An illiquid holding needs an identified source of cash.
- What do the governing documents provide on the founder's death? In DIFC, reserved powers held by a natural-person founder expire by the end of that founder's life. In ADGM, a Guardian becomes mandatory when no founder survives. Read the operative clauses alongside the statute.
ADGM permits registration with initial assets of USD 100. DIFC requires the Charter to describe the initial capital without prescribing an amount in the cited provision. Registration creates the legal person. The transfer instruments and applicable asset registers establish what it owns.
A charter naming a villa does not move the villa
For Dubai real property outside the DIFC, the Real Property Register determines whether a disposition is effective. Article 9 of Dubai Law No. 7 of 2006, as superseded by Law No. 7 of 2019, requires dispositions that create, transfer, change or extinguish real property rights to be recorded. It states that those dispositions "shall not be deemed effective unless recorded in the Real Property Register."
Article 6 gives the Dubai Land Department exclusive authority to register real property rights. Article 7 gives the register conclusive evidentiary value, subject to challenge for fraud or forgery.
The review located neither a DLD-published rule, circular, guidance page or approved-structure list naming DIFC or ADGM foundations as eligible registered owners, nor a published DLD rule excluding them. Eligibility for a particular property remains a DLD registration question.
DIFC publishes a separate corporate vehicle for holding registrable assets. Prescribed Company Regulations 3.1.1(b) cover a company established or continued in the DIFC to hold legal title to, or control, one or more GCC Registrable Assets. The definition includes land and real property. Those Regulations govern the vehicle's DIFC licence. DLD acceptance for a particular plot remains a separate decision.
A transfer also has transaction costs. The current DLD sale-registration page states 2 per cent of value from the seller and 2 per cent from the buyer, plus trustee fees of AED 2,000 to 4,000 and VAT. The DLD fee schedule states 0.125 per cent for registering a gift of real property, subject to a minimum of AED 2,000.
Published registry fees and recurring requirements
| Item | DIFC | ADGM |
|---|---|---|
| Registration | Nil under the ROC Table of Fees, Rev. 18, dated 23 February 2023 | Included in the totals below |
| Licence and initial published charges | USD 200 for the foundation licence under the ROC Table. Schedule 3 of the Law states USD 350, so the published sources give different figures | USD 1,000 total under the Schedule of Fees 2025, or USD 800 on the ADGM Family Offices page. The USD 200 difference matches the name-reservation line |
| Annual renewal | USD 200 under the ROC Table. Schedule 3 states USD 350 for licence renewal | USD 500 under both ADGM sources |
| Minimum initial assets | Article 19(2)(c) requires a description of initial capital without prescribing an amount | USD 100 under section 13 |
| Registered office | Required at all times | Required at all times under section 5(1) |
| Service provider | A Registered Agent is optional under Article 24(1) | A licensed Company Service Provider is required unless the Registrar grants an exemption under section 18 |
These are registry figures and statutory requirements. They exclude professional drafting, a commercial registered-office arrangement, administration and any remuneration agreed for Council members. The Council's duties continue whether its members are paid or unpaid.
The official sources reviewed omit professional fees for establishing and administering either structure. Obtain a written scope covering formation, transfer work, registered office, service-provider work, annual filings, governance support and exit work. For the government charges on the ordinary will route, see the full cost breakdown, government fees included.
A transfer remains open to examination
Creditor treatment differs between the regimes. DIFC Article 14(3) preserves the transfer but makes the foundation liable where its Court finds both an intent to defraud a creditor and resulting insolvency. The liability is capped by reference to the interest transferred and any accumulation.
ADGM section 33(2) permits its Court to declare a transfer void to the extent of a creditor's claim when the transferor was insolvent at the time of transfer or intended to defraud a creditor. Section 33(3) places the burden of proof on the creditor.
DIFC also provides a mistake jurisdiction. Articles 47 and 48 permit the Court to declare a transfer voidable when the statutory conditions are met, including certain mistakes of law or about consequences. Article 49 gives standing to the transferor's personal representatives or successors in title and preserves other available grounds.
A foundation has to solve a transfer or governance problem
Consider personal holdings consisting of one unencumbered freehold apartment, a bank account and a personal vehicle, without an operating company or a continuing governance purpose. A foundation would add a separate legal person, a Council of at least two, annual renewal, a registered office and, in ADGM unless exempted, a Company Service Provider. Its value has to be tested against those additional duties and costs.
The Abu Dhabi Judicial Department publishes that a person who is not a UAE citizen may register a will with its Civil Wills Office regardless of religion, at AED 950 for a regular will and AED 2,500 for a special will. The DIFC register is established for non-Muslim testators, and the federal civil register carries the same status condition. A registered will names an executor and directs estate assets within the testamentary freedom that applies on the route used. The quoted government charge is a will-registration fee. Probate, court, translation and asset-transfer steps may create later charges.
A foundation question becomes live when a completed lifetime transfer and continuing governance serve a defined purpose. Examples include operating-company shares intended to remain under a governance framework, or a group of assets for which the Charter and By-laws provide continuing administration. Each asset must still be transferable to the chosen structure.
If company shares drive the question, start with what freezes when a shareholder dies. If the immediate decision concerns a will register, use which registry route could fit which profile. Cross-border arrangements also require coordinated, jurisdiction-specific legal and tax advice where relevant.
Last updated: 25 July 2026 · Changelog: 2026-07-25: first published.
Frequently asked questions
Does a foundation replace a registered will?
A foundation governs assets validly transferred to it. Personal assets left outside remain in the founder's estate. The two asset lists can differ, so both should be inventoried and matched to the relevant transfer documents or ownership registers. A will and a funded foundation therefore address different property.
Can a DIFC or ADGM foundation hold a Dubai freehold villa?
The reviewed DLD materials are silent on whether DIFC or ADGM foundations qualify as registered owners. DLD controls the Real Property Register, and registration is required for an effective transfer. DIFC's Prescribed Company regime addresses holding GCC Registrable Assets, including land. DLD retains separate authority over the plot. Ask a UAE-licensed lawyer about the specific property and proposed owner before signing transfer documents.
Who controls the structure after the founder dies?
The Council acts under the Charter, By-laws and applicable statute. In DIFC, powers reserved to a natural-person founder may continue only for that founder's life. The fee schedule separately lists a USD 100 charge for Charter amendment after a founder's death by Court Order. In ADGM, section 26(1) requires a Guardian when no founder survives, while section 11(5) provides for the Councillors to execute the By-laws in that situation.
Is a foundation private?
It is a registered structure. DIFC Article 35 requires a register available for public inspection. ADGM registration creates a certificate, registration number and Foundations Register entry, while section 9A requires a Statement of Initial Beneficial Ownership and Control. The boundary between public register information and material kept in the By-laws remains unresolved in the reviewed sources.
Can the foundation run the family business?
A DIFC foundation cannot operate as the trading company. Article 12(5) permits only commercial activities necessary for, ancillary to or incidental to its objects. Holding shares in an operating company is a separate arrangement, and its licensing and governance should be reviewed on the actual documents. For family liquidity during an estate administration, see why the accounts freeze, and what a family can still use.
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