Purpose of a Foundation
A Foundation is a legal entity that combines features of a company and a trust, offering a structured and secure vehicle for asset protection, estate planning, wealth preservation, and philanthropic purposes.
Unlike a trust, a foundation has its own legal personality and can hold assets in its own name. It is commonly used for:
- Succession and estate planning
- Family wealth consolidation
- Charitable or philanthropic purposes
- Safeguarding assets from third-party claims
- Holding shares in family businesses or investment vehicles
Benefit of Establishing a Foundation- Purpose & Advantages
Establishing a foundation under DIFC or ADGM provides legal certainty and flexibility. The foundation structure offers several key advantages:
- Legal Personality – Foundations can hold assets, enter into contracts, and initiate legal proceedings in their own name.
- Perpetual Succession – Foundations continue to exist beyond the life of the founder.
- Founder Control – Founders can reserve certain powers or appoint a guardian to oversee the council.
- Confidentiality – Beneficiaries are not publicly disclosed.
- Asset Protection – Ring-fences assets from personal or business liabilities.
- No Beneficial Ownership Registration – Particularly attractive for privacy and succession planning.
- Flexible Purpose – Can be established for private, charitable, or mixed purposes.
Procedure of Registering a Foundation
DIFC Foundation Registration Procedure:
- Choose Foundation Name
- Prepare Charter and By-Laws
- Appoint Founder, Council Members, and Guardian (if applicable)
- Determine Registered Office within DIFC
- Submit Application to the DIFC Registrar of Companies
- Pay Registration Fee
- Receive Certificate of Incorporation
ADGM Foundation Registration Procedure:
- Choose Foundation Name
- Draft Charter and By-Laws
- Appoint Founder, Council Members, and Guardian (if applicable)
- Engage a Registered Agent (mandatory unless physically present in ADGM)
- Submit Application via ADGM’s online portal
- Pay Applicable Fees
- Certificate of Registration Issued
Benefit of the Registered Agent
A Registered Agent plays a key role in the administration and compliance of the foundation:
- Liaison: Acts as the point of contact with the Registrar and government authorities.
- Compliance Oversight: Ensures timely filings and regulatory compliance.
- Document Maintenance: Maintains statutory records and foundation documentation.
- Privacy: Shields the founder’s personal involvement in daily affairs.
- Local Presence: Mandatory for DIFC & ADGM if the foundation does not have a physical office.
Relevant Regulations
Both jurisdictions are governed by English common law principles and offer high transparency, investor protection, and legal recourse.
How HLS-Global UAE Can Assist
HLS-Global UAE offers end-to-end services with its expert for setting up foundations in DIFC and ADGM, including:
- Initial Advisory: Understanding objectives (asset protection, succession planning, etc.)
- Structuring: Recommending the optimal structure and jurisdiction
- Drafting Documents: Charter, By-Laws, Founder Declaration, Resolutions, and Regulatory Forms
- Liaison with Registrar: Filing and registration on your behalf
- Provision of Registered Agent (for ADGM) or Registered Office (for DIFC)
- Ongoing Governance: Council member services, compliance reminders, document safekeeping
- Confidentiality: Ensuring privacy and discretion throughout the process
- Cross-border Planning: Aligning foundation setup with global tax, estate, and legal considerations
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Disclaimer: All views expressed in this article are solely for informational purposes and should not be construed as legal advice. This information is for reference only and is bound to change in case of any amendments or changes to applicable laws. We do not assume any responsibility or liability for any errors or omissions in the content of this article, and do not make any warranties about the completeness, reliability and accuracy of the information expressed in this article.