The DIFC foundation checklist includes essential requirements such as appointing a registered agent, securing a DIFC-based registered office, naming the foundation in line with DIFC conventions, and drafting its charter and by-laws.
Each step ensures the foundation meets DIFC’s legal standards for governance, asset protection, and succession planning.
This guide details:
- How does a DIFC foundation work?
- How much does a DIFC foundation cost?
- How to register with DIFC?
- Who is the founder of a foundation in DIFC?
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What is a foundation in DIFC?
A DIFC foundation is a legal entity established under the DIFC Foundations Law No. 3 of 2018.
Unlike a trust, it has its own legal personality, allowing it to hold assets, enter into contracts, and manage wealth independently from its founder.
Foundations in the DIFC are commonly used by family offices, corporates, and expats seeking to preserve and manage assets efficiently within a regulated, common-law framework.
What are the benefits of a DIFC foundation?
A DIFC foundation offers several advantages for individuals and families managing global wealth including:
- Legal independence: It owns assets in its own name, separate from the founder.
- Confidentiality: Beneficiary information and governance details remain private.
- Flexible control: The founder can retain oversight through council or guardian appointments.
- Succession planning: Ideal for multigenerational wealth transfer and family governance.
- Asset protection: Assets held under the foundation are shielded from personal liabilities.
These features make it especially attractive for high-net-worth individuals and international families structuring assets in Dubai.
DIFC Foundation Checklist: Key Requirements
Establishing a DIFC foundation must meet specific legal and procedural requirements that include:
- A founder (individual or corporate)
- A compliant foundation name following the DIFC foundation naming convention
- A registered office within DIFC
- A foundation Charter and By-Laws
- Appointment of DIFC foundation council members
- An optional guardian (mandatory only if beneficiaries are specified)
- The initial capital contribution
- Identification of beneficiaries where applicable
These core requirements ensure that the foundation is properly constituted and compliant with DIFC regulations.
Who is the founder of the DIFC foundation?
The founder of the DIFC foundation is the person or entity that establishes the foundation by contributing assets and defining its purpose.
The founder determines how the assets will be managed, appoints the council, and sets the terms through the foundation’s Charter and By-Laws.
Founders can be individuals, corporations, or family offices, depending on the foundation’s objective.
Once the foundation is registered, it becomes an independent legal entity; meaning assets no longer belong to the founder personally.
DIFC foundation naming convention
The DIFC foundation naming convention requires that every foundation name must:
- Be unique and distinguishable within the DIFC registry
- End with the word “Foundation”
- Avoid misleading terms or names suggesting government affiliation
- Be approved by the DIFC Registrar before registration
This ensures transparency and consistency across the DIFC registry.
Registered office within DIFC
A registered office within DIFC is mandatory for all foundations.
This office serves as the official address for correspondence, record keeping, and regulatory notices.
It can be located within the premises of a DIFC-licensed corporate service provider or law firm authorized to host registered entities.
How to register a foundation in DIFC?
To register a foundation in DIFC, applicants must follow these steps:
- Prepare documentation – Draft the foundation Charter and By-Laws.
- Submit the application – File the documents with the DIFC Registrar of Companies.
- Appoint the council and, if required, a guardian.
- Provide details of the registered office within the DIFC.
- Pay applicable fees – usually handled by the service provider.
- Receive the Certificate of Registration, which legally establishes the foundation.
The process typically takes between 2 to 4 weeks, depending on complexity and documentation readiness.
DIFC Foundation Charter and By-Laws
The DIFC foundation charter and by-laws form the core legal documents that define how a foundation is structured and governed.
The Charter outlines key public information, including the foundation’s name, purpose, registered office, and initial capital.
It is filed with the DIFC Registrar of Foundations and is publicly accessible.
The By-Laws, meanwhile, serve as the foundation’s internal governance manual, detailing how council members are appointed or removed, how meetings and decisions are conducted, and how assets and distributions are managed.
Unlike the Charter, the By-Laws remain confidential, providing an additional layer of privacy for founders, family members, and beneficiaries.
DIFC foundation council members
The DIFC foundation council members are responsible for the day-to-day management of the foundation and ensuring it operates according to its Charter and By-Laws.
Key duties include:
- Managing and safeguarding the foundation’s assets
- Acting in the best interests of the foundation and its beneficiaries
- Ensuring compliance with DIFC law and reporting requirements
The council must consist of at least two members (individuals or corporate entities), though larger family or business foundations may appoint more for broader governance.
How much does a DIFC foundation cost?
There is no official registration fee charged by the DIFC Registrar for establishing a foundation, but professional setup expenses usually range between USD 5,000 to 10,000, covering legal drafting, structuring, and advisory support.
The initial capital contribution can be as low as USD 100, depending on the foundation’s purpose.
Annual maintenance or professional service provider fees typically range between USD 1,000 to 3,000.
Who are the beneficiaries of a foundation in DIFC?
The beneficiaries of a foundation in DIFC are individuals, family members, or entities entitled to receive benefits or distributions as outlined in the foundation’s Charter or By-Laws.
In many family governance setups, the founder or their heirs may be named as beneficiaries.
For purpose-based foundations, beneficiaries could be charitable causes, employees, or corporate stakeholders.
If no beneficiaries are specified or if all cease to exist, the foundation’s remaining assets are typically transferred according to the Charter’s dissolution clause or to a default recipient appointed by the council, in line with DIFC law.
Conclusion
This DIFC foundation checklist serves as a practical roadmap for founders, confirming that all structural, governance, and compliance requirements are properly in place before and after registration.
It helps ensure smooth setup and long-term management of the foundation.
For expats and high-net-worth individuals, the DIFC remains a trusted and confidential jurisdiction for preserving wealth and securing family legacies across generations.
FAQs
Is DIFC a qualifying free zone?
Yes. DIFC is a qualifying free zone recognized by the UAE government.
It operates under a distinct legal framework based on English common law and offers 100% foreign ownership, tax advantages, and strong regulatory oversight.
Can a DIFC foundation hold shares?
Yes. A DIFC foundation can hold shares in local and international companies.
This makes it a popular choice for structuring corporate ownership, protecting assets, and managing family business interests under one controlled entity.
What is the cost of living in DIFC?
Rent for a one-bedroom apartment in DIFC typically ranges from AED 120,000 to 180,000 per year, while dining and daily expenses are comparable to upscale districts like Downtown Dubai.
The cost of living in the DIFC area is among the highest in Dubai due to its premium location and luxury lifestyle.
What is the difference between Dubai and DIFC?
Dubai is the broader emirate under UAE jurisdiction, while the Dubai International Financial Centre (DIFC) is a special economic free zone within Dubai that operates under its own legal and regulatory framework based on English common law.
DIFC focuses on finance, wealth management, and corporate services, offering companies 100% foreign ownership and tax advantages.
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