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DIFC Foundations Law 2018 is Effective Immediately

DIFC Foundations Law 2018 is Effective Immediately

DIFC Foundations Law 2018 is Effective Immediately

Last Updated on May 26, 2021


The Dubai International Financial Centre (“DIFC”) is implementing its new foundation’s law with immediate effect from 21st March 2018. The foundations are used for the following objectives and many other purposes:

  1. As vehicles for family wealth/succession planning;
  2. In commercial transactions;
  3. For securitization structures;
  4. For long-term businesses holding; and
  5. As anti-hostile takeover instruments.

The DIFC Foundations are attune with the existing broad and sophisticated measures of the Free Zone.

Interested Parties:

The Foundations Regime is delightful news for an extensive range of international and national parties. These parties are inclusive of family businesses seeking continuance and succession planning solutions, family offices, entrepreneurs and business people who also have charitable and philanthropic aspirations. It also includes legal advisors and persons conducting commercial or wealth management activities in or from the DIFC.

Objectives and kinds of foundations:

The aim of the foundation is:

  1. to serve exclusively charitable objects, and
  2. one or more of:
    1. non-charitable purposes; and
    2. objects to benefit persons specified name, category, or class

Nevertheless, a foundation cannot carry out any profit-making activities, except those objectives which are ancillary or incidental to its goals. As per the law, the Foundation objectives must not be unlawful or against the public policy of the DIFC or the UAE.

The foundations might be subjected to particular governance protocols as per its objectives and activities. Also, they will be required to abide by the other regulatory provisions if engaging in those activities. 

Coverage of the Law:

The new law covers the following areas:

  1. The nature of a DIFC Foundation, including its objectives and the rights of heirs;
  2. How to establish a Foundation;
  3. The roles of the different members of the foundation, such as the Founder, Council and the types of property the Foundation can hold and in what circumstances;
  4. The administration requirements of the Foundation;
  5. The role of the Registrar;
  6. The effect of court and arbitral proceedings on the Foundation;
  7. How to continue a Foundation into or from another jurisdiction;
  8. How to dissolve a Foundation; and
  9. Fines and fees concerning the Foundation’s administrative obligations.

Our Assistance:

We at IMC are pleased in assisting our clients in registering and maintaining ongoing compliance with a Foundation by performing the following services:

  1. Incorporation process assistance,
  2. Providing valuable opinions on matters of Foundation goals and assets,
  3. Assisting on the issues of composition and powers of the foundation’s bodies,


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