How to Establish a DIFC Foundation in Dubai: Step-by-Step Guide 2025
Establishing a Foundation in the Dubai International Financial Centre (DIFC) offers unique advantages for wealth protection, succession planning, philanthropy, and strategic asset holding, all within the UAE’s most prestigious financial free zone. As you explore business setup in the UAE, the DIFC Foundation provides a compelling blend of legal strength, confidentiality, and tax efficiency. Here’s a detailed guide to help you through the process.
What Is a DIFC Foundation?
A DIFC Foundation is a separate legal entity - an “orphan” structure with no shareholders—that can hold assets, enter into contracts, and operate under its charter and bylaws. Governed by common-law principles, it combines aspects of both trusts and companies. Foundations are often used for asset protection, estate planning, family succession, charitable giving, and holding intellectual property or investments.
Key Benefits of Establishing a Foundation
- Independent Legal Identity: Functions as a standalone entity capable of owning assets.
- Robust Asset Protection: Offers robust safeguards against personal liabilities and creditor claims.
- Succession & Wealth Management: Enables structured, multi-generational succession with clear governance.
- Tax Efficiency: Exempt from corporate, capital gains, and income taxes on qualifying income.
- Privacy: Public registry contains limited foundation details; beneficiary identities remain confidential.
- Common-Law Framework: Governed by English-derived laws with independent DIFC courts and DFSA oversight.
Who Can Establish a DIFC Foundation?
Foundations are ideal for:
- High-net-worth individuals
- Family offices and family businesses
- Institutions with long-term wealth objectives
- Philanthropists and charitable groups
- Corporations aiming to hold intellectual property or investments
Steps to Set Up a Foundation in the DIFC
- Define purpose and governance: Choose whether the foundation is charitable or non-charitable and define its beneficiaries or purposes. Create a Charter and optional By-Laws.
- Appoint the Foundation Council: The governing body must include at least two council members (individuals or corporates). Optionally, you can include a Founder, Guardian, and Beneficiaries.
- Secure a registered office: A registered office address within DIFC is required, either through a serviced office provider or a commercial lease.
- Submit documents to DIFC Registrar: Documents must be submitted through the DIFC portal, usually with the help of a registered consultant. Required documents include:
- Completed application form
- Charter and By-Laws
- Details and IDs of Founder, Council, Guardian
- Proof of funding (no minimum capital required)
- Pay the fees and obtain approval from the Authority: Pay the registration fee. The processing time is typically 2–4 weeks, depending on document readiness.
- Establish bank account: Once registered, open a corporate bank account to manage capital funding and transactions.
- Maintain compliance: Ensure ongoing compliance by filing annual returns, reporting funds as needed, and following governance practices such as holding Council meetings.
Legal Framework & Support
Foundations are regulated under DIFC’s Foundations Law and supported by a transparent governance framework, templates, and compliance tools.
Benefits of DIFC’s Supportive Eco-System
- Enforcement via DIFC Courts
- Regulation by the DFSA for financial operations
- Strong KYC/AML compliance provisions
- Access to a vibrant professional services network, including legal, trustee, and fund advisors
- Networking and collaborative opportunities
How CLA Emirates Can Assist in Setting Up the DIFC Family Foundation
At CLA Emirates, we provide expert guidance on business setup in the UAE, including company formation in Dubai and business registration in the UAE. Our Foundation services include:
- Structuring and Charter/By-laws drafting
- Council and Guardian appointments
- DIFC application and approval handling
- Registered office arrangements
- Bank account introduction and setup
- Ongoing administration, annual compliance, and governance advice
Frequently Asked Questions DIFC Foundation(FAQs)
1. What is a DIFC Foundation?
A DIFC Foundation is a legal entity established under the Dubai International Financial Centre (DIFC) framework for the purpose of asset protection, estate planning, holding investments, or charitable activities.
2. Who can establish a Foundation in DIFC?
Both individuals and legal entities, whether residents or non-residents of the UAE, can set up a foundation in DIFC. The founder can appoint themselves or others as council members to manage the foundation’s affairs.
3. Is a physical office mandatory in DIFC for a Foundation?
Yes, a DIFC-registered office address is mandatory. You can opt for a flexi-desk or shared workspace depending on your operational needs. This is a part of the compliance for business registration in the UAE.
4. What is the typical timeframe for DIFC Foundation setup?
Once all documents are in order, company formation in Dubai’s DIFC can take 10 to 15 working days, depending on regulatory reviews and approvals.
5. Can a DIFC Foundation hold shares in other companies?
Yes. One of the key uses of a DIFC Foundation is to act as a holding structure, owning shares in UAE or international companies as part of strategic investment or succession planning.
6. Do I need to appoint a registered agent for setting up a DIFC Foundation?
While it’s not mandatory, working with an experienced registered agent or consultancy like CLA Emirates ensures accuracy, compliance, and efficiency in your DIFC business registration process.
Call for Consultation
Mr. Ragesh Mattummal | Partner
M: +971 50 357 8031
E: Ragesh.Mattummal@claemirates.com
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