The Essentials 

Can privacy survive in an age of global transparency? Families, philanthropists, and wealth managers today face a pressing dilemma: international regulators are demanding ever-greater disclosure under FATF and OECD frameworks, yet confidentiality remains a fundamental pillar of effective wealth structuring. DIFC Foundations stand out as a powerful answer. With their flexible common law structure and internationally aligned regulations, they enable clients to safeguard sensitive information while complying with global standards. The ability to balance transparency with discretion makes them particularly attractive for families managing private wealth with DIFC Foundations, where safeguarding legacy, ensuring continuity, and preserving confidentiality go hand in hand. 

As global regulators tighten the net with FATF and OECD standards on beneficial ownership, families and philanthropists are finding their long-cherished confidentiality under pressure. Discretion in wealth structuring must be carefully engineered within a framework of compliance. 

With the common law flexibility and internationally respected regulatory environment of DIFC Foundations, they offer a powerful platform to reconcile two seemingly opposing forces: the demand for transparency and the right to privacy. For advisors, wealth managers, and family offices, the real challenge and opportunity lie in structuring foundations that can deliver both by managing private wealth with DIFC Foundations. 

The Global Push for Transparency 

Regulatory frameworks such as the FATF recommendations and OECD beneficial ownership standards are raising the bar for disclosure. Foundations are now expected to implement strict anti-money laundering (AML) controls and report on ultimate beneficial ownership. At the same time, clients and donors place a premium on confidentiality, making the balancing act more complex than ever. 

Private Wealth with DIFC Foundations: Why DIFC Foundations Are Uniquely Suited? 

The DIFC Foundation, built on a common law framework, offers significant flexibility. Its structure allows for bespoke governance, enabling privacy-preserving arrangements without compromising compliance. From nominee appointments to tailored charter provisions, DIFC Foundations provide mechanisms to protect sensitive information while meeting international obligations for managing private wealth with DIFC Foundations. 

DIFC’s regulatory alignment with global standards ensures that privacy does not come at the expense of credibility, a critical factor for families with cross-border interests. 

Practical Approaches of DIFC Foundations 

• Tailored Governance in the Charter and By-Laws 

DIFC Foundations allow for highly customized charters and by-laws. By clearly setting out roles, decision-making authority, and access rights, families can restrict who has visibility over sensitive information while still meeting disclosure requirements to the DIFC Registrar of Companies. 

• Nominee Roles within the DIFC Framework 

Professional service providers can act as nominees for council members or registered agents, ensuring that the foundation’s beneficiaries remain confidential while regulatory obligations such as maintaining a registered office and filing beneficial ownership details are properly managed. 

• Data Protection under DIFC Law No. 5 of 2020 

DIFC has its own robust Data Protection Law, modeled on international best practices such as GDPR. Foundations can leverage this framework by adopting secure record-keeping, controlled access, and encryption policies to ensure donor and beneficiary information is safeguarded against unauthorized disclosure. 

• Compliance Alignment with DIFC Registrar Requirements 

While managing private wealth with DIFC Foundations, they must maintain registers of beneficial owners and comply with AML/CFT standards, internal compliance frameworks can be designed to ensure that only regulators have access to this information, not the public. This protects confidentiality while aligning with FATF and OECD standards. 

Structuring Private Wealth with DIFC Foundations: The Balancing Act  

The tension between confidentiality and transparency is real but manageable. With thoughtful legal structuring and proactive compliance practices, DIFC Foundations can preserve donor privacy while satisfying international standards. 

As global regulators continue to tighten scrutiny, DIFC Foundations offer a model for privacy and compliance simultaneously. Legal advisors, wealth managers, and family offices that master this balance are best positioned to serve clients in an increasingly regulated, yet privacy-conscious world. 

How MS Can Help in Preserving Private Wealth with DIFC Foundations 

At MS, we help families, philanthropists, and institutions establish DIFC Foundations that strike the right balance between confidentiality and compliance. Our team combines expertise in corporate structuring, regulatory frameworks, and wealth governance to design tailored foundation structures that protect sensitive information while meeting international standards such as FATF and OECD requirements. From drafting governance clauses and implementing nominee mechanisms to advising on data protection and ensuring ongoing compliance with DIFC regulations, we provide end-to-end support. With deep local knowledge and international perspective, MS serves as a trusted partner in safeguarding privacy and managing private wealth with DIFC Foundations without compromising regulatory integrity. 

The Essentials 

Most wealth transitions fail because the next generation isn’t ready to lead and carry the legacy. What they need is a structure that supports not just asset transfer, but leadership, clarity, and continuity. Foundation setup in DIFC are fast becoming the solution of choice for families in the region, offering a robust legal framework that secures your legacy and empowers your heirs.  

Across the Gulf and beyond, families are facing a defining moment: a generational handover of unprecedented scale and risk. While structures are in place to protect wealth from external threats, it’s often the internal gaps that cause the most damage. Unprepared heirs, unclear succession plans, and a lack of shared purpose can quietly unravel what took decades to build. 

As families look to future-proof their legacy, Foundation setup in DIFC is emerging as a strategic solution for preparing the next generation to lead with clarity, confidence, and purpose. 

In this blog, we examine the very real risks of inheritance without preparation, and how Foundation setup in DIFC can act as a bridge between generations, aligning governance with growth, and values with vision. 

The Real Risk: Inheritance Without Preparation 

Globally, studies consistently show that over 70% of wealth transfers fail by the second generation, and nearly 90% by the third. But the failures aren’t because of taxes or investment losses, they’re due to breakdowns in trust, governance, communication, and preparedness. 

The common risks include: 

• Unprepared heirs who lack financial or governance literacy 

• Conflicts among siblings or extended family 

• Absence of a shared vision or family purpose 

• Overreliance on individual decision-makers without institutional support 

• Poorly structured succession plans leading to regulatory or tax complications 

The greatest risk to family wealth is the mismanagement from within. 

Why Next-Gen Readiness Can’t Wait? 

Today’s heirs are growing up in a vastly different world, one shaped by rapid innovation, global volatility, and shifting values. Many have global educations, diverse ambitions, and a desire to make meaningful impact. But without guidance, this independence can turn into fragmentation. 

If families fail to engage and equip the next generation early, they risk more than just financial erosion. They risk losing the very cohesion and vision that built the wealth in the first place. 

Foundation Setup in DIFC: A Structured Bridge Between Generations 

The DIFC Foundation is emerging as one of the most effective vehicles to proactively manage this generational shift. Far beyond a legal holding structure, it offers a governance-first approach to succession, giving families a platform to educate, empower, and engage heirs with clarity and control. 

Here’s how Foundation setup in DIFC help mitigate generational risks: 

• Defined Governance: By separating legal ownership from beneficial interest, families avoid power struggles and maintain clear oversight. 

• Ongoing Control: Founders can set conditions for distributions, decision-making rights, and governance succession. 

• Multi-Generational Representation: Family members can be involved through advisory councils or mentorship programs, creating a space for learning before leading. 

• Purpose Alignment: Foundations allow families to articulate their mission, whether philanthropic, investment-led, or legacy-driven, giving heirs a cause, not just capital. 

Turning the Foundation into a Learning Institution 

One of the most underestimated uses of a DIFC Foundation is as a real-world leadership lab for the next generation. Through structured involvement, such as shadowing the council, contributing to philanthropic efforts, or helping manage investment portfolios, heirs learn governance, accountability, and strategic thinking in practice. 

Many families also integrate custom education plans, covering: 

• Investment fundamentals and risk management 

• Fiduciary responsibilities and ethics 

• Impact investing and social responsibility 

• Legal, regulatory, and tax frameworks 

Rather than passively receiving wealth, the next generation becomes actively engaged in stewarding it. 

Foundation Setup in DIFC: Embedding Values, Not Just Structures 

A foundation is only as strong as the values it reflects. DIFC Foundations provide the opportunity to formalize family principles and long-term goals helping heirs connect emotionally and intellectually with the legacy they are inheriting. 

Whether the goal is preserving a family business, supporting charitable missions, or fostering entrepreneurial innovation, the structure becomes a living expression of the family’s identity.  

Foundation Setup in DIFC with MS: Your Partner in Preparing the Next Generation 

At MS, we support families in using Foundation setup in DIFC as strategic vehicles for preparing the next generation. Our team offers end-to-end support, from foundation formation and tailored governance frameworks to next-gen involvement and ongoing advisory. We help you embed purpose, ensure continuity, and equip future heirs with the tools to structure best. 

In an era of increasing cross-border wealth, succession planning, and governance demands, setting up a foundation has become a popular and strategic choice, particularly in jurisdictions like the Dubai International Financial Centre (DIFC). DIFC foundation setup is increasingly favored by high-net-worth individuals, family businesses, and corporations seeking a robust, internationally recognized structure for asset protection, estate planning, philanthropic activities, and legacy management. 

Here’s a step-by-step guide on how to establish a DIFC Foundation, ensuring full compliance and operational readiness in 2025 and beyond. 

Key Steps in Establishing a DIFC Foundation Setup 

Step 1: Define the Purpose and Governance Framework 

The first step is to determine the nature and purpose of your foundation: 

• Will it be charitable, focused on philanthropic goals? 

• Or non-charitable, intended for asset protection, family governance, or business continuity? 

Once the purpose is defined, you must draft the foundation’s legal framework: 

• Charter (mandatory): This sets out the foundation’s objectives, governance structure, powers, and duties. 

• By-Laws (optional): These are internal rules detailing how the foundation is run. They can remain private and are not filed with the Registrar. 

The DIFC foundation setup can be purpose-led or benefit specific individuals, and you may include optional parties like Guardians to enhance oversight. 

Step 2: Appoint the Foundation Council 

Every DIFC foundation setup must be managed by a Council, which serves as the governing body. The Council: 

• Must include at least two members (individuals or corporate entities) 

• May include or exclude the Founder, depending on the structure 

• Can appoint a Guardian, especially where beneficiaries are not defined or if the Founder wishes to retain a level of control 

• May also define Beneficiaries, though not always required 

• The Council is responsible for ensuring that the foundation acts according to its Charter and applicable DIFC laws. 

Step 3: Secure a Registered Office in the DIFC 

Foundations must maintain a physical registered office address within the DIFC. This address is crucial for regulatory communication and legal recognition. You can meet this requirement by: 

• Leasing a serviced office, or 

• Taking a commercial lease in the DIFC 

• Using a reputable service provider can help reduce overhead while fulfilling legal requirements. 

Step 4: Prepare and Submit Required Documents 

The application to establish a DIFC foundation setup must be submitted through the DIFC Registrar of Companies (RoC) portal, typically with the support of an authorized service provider or advisor. Required documents include: 

• Completed application form 

• Finalized Charter and optional By-Laws 

• Valid identification and details of the Founder, Council members, and Guardian (if applicable) 

• Proof of initial funding (no minimum capital requirement, but evidence of funding source is needed) 

Accuracy and completeness at this stage can significantly reduce processing time and queries from the Registrar. 

Step 5: Pay Fees and Await DIFC Approval 

Once the documentation is reviewed and accepted, the foundation’s registration fee must be paid.

• Typical timeframe: 2–4 weeks from submission to approval, depending on document readiness and any Registrar queries. 

Upon approval, the foundation receives a Certificate of Registration, officially recognizing its existence under DIFC law. 

Step 6: Open a Bank Account 

After registration of the DIFC foundation setup, the next step is to open a UAE-based corporate bank account for the foundation. This account will: 

• Hold foundation assets 

• Enable disbursements and receipts 

• Maintain financial independence from personal or corporate accounts 

Step 7: Ensure Ongoing Governance and Compliance 

Compliance doesn’t end with registration. DIFC Foundations are subject to ongoing legal and governance requirements, such as: 

• Filing annual returns with the DIFC Registrar 

• Holding and documenting Council meetings 

• Maintaining accurate beneficiary records 

• Updating the Registrar about any structural changes (e.g., changes in Council or Guardian) 

• Retaining a registered office at all times 

Non-compliance can result in administrative penalties, reputational risk, and legal complications, making ongoing support essential. 

How MS Can Help in Establishing a DIFC Foundation Setup? 

At MS, we bring deep jurisdictional knowledge and a tailored advisory approach to every foundation setup. Our team understands that no two clients are alike, and your foundation’s structure should reflect your vision, values, and long-term goals. 

Here’s how we can support your DIFC Foundation journey: 

• Advisory on Purpose & Structure 
  We help you assess the optimal purpose, structure, and governance model for your foundation, charitable or non-charitable, based on your goals. 

• Document Drafting & Regulatory Filing 
  Our legal and corporate team drafts your Charter and By-Laws, prepares supporting documents, and handles the entire submission process through the DIFC portal. 

• Registered Office & Local Presence 
  We provide compliant registered office solutions in the DIFC, ensuring a seamless operational setup from day one. 

• Liaison with DIFC Authorities 
  Our experts handle all communications with the DIFC Registrar, resolving queries and ensuring faster approval. 

• Bank Account Opening Support 
  We coordinate with local banks to support your foundation’s bank account opening process, including document preparation and introductions. 

• Ongoing Compliance & Governance 
  From annual filings to Council meeting documentation, we offer full post-incorporation support to ensure your foundation remains compliant, efficient, and future-ready. 

Creating wealth is a milestone. Preserving it across generations and jurisdictions is the true legacy challenge. 

For many families exploring wealth structuring in the UAE, setting up a trust or foundation is seen as the natural next step. These structures promise protection, continuity, and control. But too often, they’re treated as standalone solutions, quick fixes to complex questions. In reality, a trust or foundation is only as effective as the intent and clarity behind it. 

True wealth protection is about defining your purpose, distancing ownership without losing influence, and choosing structures that can adapt as your family evolves. Wealth structuring in the UAE, especially through DIFC and ADGM, offers the tools, but it’s the alignment between structure and strategy that determines success. Trusts offer flexibility and discretion; foundations provide formal governance and permanence. Each has its place, but neither works in isolation from vision. 

What you’re ultimately protecting isn’t just capital. 
It’s what the capital stands for. 
And that’s where purpose must lead and structure must follow. 

Intent First. Structure Second 

The strongest wealth structures start with purpose. Before deciding between a trust, foundation, or holding company, families must first get clear on what they actually want to achieve.  

• Is the goal to preserve wealth untouched for generations, or to enable access and entrepreneurship among heirs?  

• Is discretion paramount, or does transparency help build alignment and accountability? 

•  Do you see yourself gradually stepping away, or staying involved behind the scenes?  

These answers shape not just the choice of structure, but how it’s governed, who’s involved, and how it evolves. Without that clarity of intent, even the most sophisticated structure can fail to serve its purpose. With it, structure becomes not a template, but a tailored solution. 

Why Ownership Isn’t Always an Advantage!  

Ownership, while intuitive, often undermines asset protection when it’s too closely tied to the founder. Courts and creditors look at who actually controls and benefits from the asset. If you continue to make decisions, direct distributions, or override structure governance, even informally, the asset may still be considered yours in substance, exposing it to claims or challenges.  

In the context of wealth structuring in the UAE, particularly within ADGM and DIFC trusts and foundations offer clear mechanisms to create distance without losing intent. In a trust, the legal ownership of assets is transferred to a trustee, allowing the settlor to step back from day-to-day control while retaining influence through mechanisms like protectors, reserved powers, or letters of wishes. Similarly, a foundation, with its own legal personality, holds assets in its own name and is governed by a council, separating personal ownership from administration, yet allowing the founder to define purpose, appoint council members, and establish succession protocols.  

True protection requires a clear separation between ownership and control, using roles like protectors, councils, or letters of wishes to maintain influence without legal liability. In essence, effective structuring is about stepping back just enough to shield, not sever. 

Wealth structuring in the UAE: How Much Control Do You Really Need? 

This is the question that separates smart structuring from superficial fixes. 

Some families need day-to-day involvement. Others prefer to step back, ensuring the framework operates without intervention. There’s no single right answer, only one that aligns with personal goals, family dynamics, and long-term vision. 

In a trust, ownership of assets is legally transferred to a trustee, creating a clear divide between the settlor and the assets. This separation reduces personal exposure while still allowing the settlor to retain influence, through roles like protectors, reserved powers, or non-binding letters of wishes. A foundation, on the other hand, goes a step further by having its own legal personality. It holds assets in its own name and is managed by a council, not an individual, which distances the founder from control while enabling them to define the foundation’s purpose, shape governance rules, appoint key decision-makers, and set out succession plans. 

Questions worth asking: 

• Is my role in this structure operational or strategic? 

• Am I building this for legacy, tax neutrality, asset protection or all three? 

• Who needs to be involved, and at what stage? 

The Advantage of Wealth Structuring in the UAE: ADGM and DIFC as Global Structuring Hubs 

What sets ADGM and DIFC apart is not just their regulatory strength, but how thoughtfully they’ve developed legal vehicles like trusts and foundations to meet the evolving needs of global families for wealth structuring in the UAE. Both jurisdictions offer dedicated, modern frameworks for common law trusts, allowing settlors to separate ownership and control while preserving intent through roles like protectors and letters of wishes. At the same time, foundations, which are increasingly preferred by families seeking continuity, legal personality, and formal governance, are fully supported under both regimes. These structures come with clear rules around asset protection, succession, and purpose-driven governance, making them highly adaptable for multi-generational planning.  

How MS Can Help You Set Up a DIFC Foundation for Wealth Structuring in the UAE 

At MS, we offer comprehensive, end-to-end support for establishing DIFC foundations tailored to your specific legacy, asset protection, and succession goals. We assist in integrating the foundation into your wider strategy of wealth structuring in the UAE, ensuring alignment with cross-border considerations, tax efficiency, and long-term control. Whether you’re building a family legacy, safeguarding assets, or planning multi-generational governance, MS ensures that your DIFC foundation is more than compliant; it’s meaningful, secure, and built to last. 

The introduction of Ministerial Decision No. 261 of 2024 marks a pivotal moment for family foundations in the UAE. By allowing eligible entities to apply for Unincorporated Partnerships in the UAE, the new framework offers a path to tax transparency, operational simplicity, and greater alignment with long-term legacy goals. However, taking advantage of this opportunity requires a deep understanding of both legal structure and strategic intent.

Foundations must now consider how their setup aligns with Unincorporated Partnership criteria, how pass-through taxation impacts beneficiaries, and what ongoing compliance will entail. From wealth preservation and succession planning to regulatory reporting and control, this shift brings both challenges and powerful potential for those looking to structure their foundations with clarity and purpose.

Understanding Unincorporated Partnerships in the UAE

An Unincorporated Partnership is a contractual arrangement between two or more parties who agree to carry on a business without creating a separate legal entity. Unlike corporations or other registered entities, Unincorporated partnerships are not distinct from legal persons, but they do offer some significant operational and tax advantages.

In the context of family foundations and private structures, the Unincorporated partnership model can be highly attractive:

• Pass-through tax treatment – Income is taxed at the partner or beneficiary level, not at the entity level.
• Operational simplicity – Unincorporated partnerships may involve less administrative complexity compared to incorporated entities.
• Alignment with purpose – The model naturally aligns with goals like wealth preservation, succession planning, and philanthropy.
• Mandatory registration – To access the benefits of the Unincorporated Partnership regime, entities must formally register and obtain approval from the Federal Tax Authority (FTA). Only after successful registration can the pass-through tax treatment and other provisions be applied.

Unincorporated Partnerships in the UAE: A Closer Look at Ministerial Decision No. 261 of 2024

Ministerial Decision No. 261 of 2024, issued by the UAE Ministry of Finance, provides clarity on how Unincorporated partnerships in the UAE will be treated for corporate tax purposes under Federal Decree-Law No. 47 of 2022.

Key Highlights:

• Effective Date: Retroactively applicable from 1 June 2023.
• Application Requirement: Entities seeking UP status must formally apply to the Federal Tax Authority (FTA).
• Pass-Through Taxation: No tax is levied at the entity level. Instead, partners or beneficiaries assume the tax obligations directly.
• Annual Declaration: To retain UP status, a yearly declaration must be submitted, confirming ongoing eligibility.

This framework represents a significant strategic opportunity for family foundations looking to streamline compliance while aligning tax treatment with beneficiary outcomes.

Strategic Considerations for Family Foundations by Structuring Unincorporated Partnerships in the UAE

Before adopting the Unincorporated partnerships in the UAE, family foundations should weigh the following considerations:

1. Eligibility and Structure

Does the foundation’s legal setup and purpose qualify under the criteria for UP status? Structures already operating under a foundation law (like in DIFC or ADGM) may require careful alignment or restructuring.

2. Tax Treatment of Beneficiaries

Will the pass-through model be beneficial to the foundation’s beneficiaries? Consideration must be given to their personal tax circumstances (especially if they are tax-resident in other jurisdictions).

3. Compliance Obligations

Is the foundation equipped to manage the annual declaration and other regulatory responsibilities under the new regime?

4. Long-Term Objectives

Does this structure support the foundation’s strategic goals, including governance, legacy planning, and multi-generational control?

Simplifying Unincorporated Partnerships and Legacy Planning with MS

MS supports family foundations by offering a streamlined, end-to-end approach to structuring under the regime of Unincorporated Partnerships in the UAE. Our team begins by evaluating your current foundation setup and identifying the most tax-efficient options tailored to your goals. We handle the complete Unincorporated Partnership application process, including documentation and submission to the Federal Tax Authority, ensuring your structure meets all legal and regulatory requirements. To maintain compliance, we manage annual declarations and keep your foundation aligned with the latest tax law developments. Additionally, we provide strategic advice on legacy-focused tax planning, helping you structure intergenerational wealth transfers with simplicity, control, and long-term vision.

The UAE Federal Tax Authority (FTA) has released a comprehensive Corporate Tax Guide on the Taxation of Family Foundations, offering clarity on how these entities are treated under the UAE’s Corporate Tax regime. For families managing multi-generational wealth through foundations or trusts, this FTA guide on family foundations is essential reading.  

From fiscal transparency to filing obligations and structuring flexibility, the new guidelines mark a significant step in positioning the UAE as a robust jurisdiction for succession planning and asset protection.  

Annual Confirmation Filing: A New Mandatory Requirement in the Update FTA Guide on Family Foundations  

One of the most significant requirements outlined in the FTA guide on family foundations is the Annual Confirmation Filing. Family Foundations, or juridical persons fully owned and controlled by them and treated as Unincorporated Partnerships, must file a confirmation with the FTA within 9 months of the end of each tax period. In multi-tier structures, either the foundation or each individual entity can submit the annual confirmation.  

Important Deadlines:  

• For tax periods ending on or before 31 March 2025, the deadline is 31 December 2025. 

• For those aiming to benefit from the administrative penalty waiver for late registration, it is advisable to submit the annual confirmation by 31 July 2025, particularly for entities with a tax period ending 31 December 2024.  

Other Key Takeaways from the FTA Guide on Family Foundations:  

1. Option to Apply for Fiscal Transparency  

Family Foundations that meet the conditions under Article 17 of the Corporate Tax Law can apply to the FTA to be treated as an Unincorporated Partnership, effectively becoming fiscally transparent. This status exempts the foundation from corporate tax, passing income through to the beneficiaries who then report it in their own tax filings (if applicable).  

2. Unincorporated Trusts and Structuring Flexibility  

By default, unincorporated trusts are treated as Unincorporated Partnerships under the UAE Corporate Tax Law, making them fiscally transparent. These trusts also have the option to elect treatment as a Family Foundation, which can be strategic—particularly when managing or controlling entities that hold assets or investments. 

However, in certain cases, this election may not be necessary. 

According to the FTA guide, if an unincorporated trust is automatically treated as an Unincorporated Partnership and wholly owns and controls a juridical person, and that juridical person meets the conditions under Article 17(1) of the Corporate Tax Law, the “wholly owned and controlled” condition is considered satisfied, even if legal ownership technically resides with the trustee(s). 

This applies as long as the ownership and control chain is uninterrupted and made up entirely of fiscally transparent entities. 

3. Inclusion of Wholly-Owned Entities  

Entities wholly owned and controlled by Family Foundations (directly or indirectly) may also benefit from pass-through treatment if they are not engaged in commercial activities. These entities can also maintain different accounting periods, offering added operational flexibility.  

4. Tax Implications for Beneficiaries  

According to the FTA guide on family foundations, if a non-qualifying public benefit entity is a beneficiary, any taxable income (such as non-exempt dividends) should be distributed to the qualifying entity within six months from the end of the tax period. This underscores the importance of timely distributions.  

5. Applicability to Foreign Foundations  

The guide also explains how foreign foundations holding UAE assets to apply for fiscal transparency, subject to meeting UAE tax law requirements, strengthening the UAE’s global appeal for international families.  

6. Disclosure and Reporting Requirements  

Under the FTA guide on family foundations, only relevant entities, such as non-qualifying public benefit entities, are required to provide beneficiaries with sufficient information to assess their Corporate Tax obligations for each tax period. 

There’s no requirement for Family Foundations to distribute income to family members or share details unless the income is taxable in the hands of the beneficiaries. 

Regarding payments made to beneficiaries for services, these are deductible by the Family Foundation if conducted at arm’s length. However, the tax treatment of such income will be determined separately by each beneficiary and is not addressed within the guide. 

The FTA Guide on Family Foundations: Strengthening Tax Transparency and Wealth Protection 

The FTA guide on family foundations marks an important evolution in the UAE’s tax landscape, providing much-needed clarity for Family Foundations and similar structures. With fiscal transparency options, access to Free Zone tax benefits, and defined compliance expectations, the UAE further cements its reputation as a competitive jurisdiction for private wealth structuring.  

At MS, we are committed to providing you and your family with bespoke wealth planning solutions, including the strategic establishment of DIFC Foundations, enabling you to unlock significant tax benefits and long-term asset protection.  

UAE foundations have rapidly evolved into a mainstream vehicle for business continuity, intergenerational wealth planning, and tax efficiency. Once considered a niche structure, foundations are now at the forefront of asset protection and succession strategies, attracting individuals and businesses seeking long-term stability. 

The strength of a DIFC Foundation setup lies in its governance framework, which balances asset protection with the founder’s long-term vision and operational efficiency. This structure is upheld by key roles such as the Founder, who establishes the foundation; the Council, responsible for overseeing its operations; and the Guardian, who provides an extra layer of oversight when required. Additionally, Beneficiaries and a Default Recipient play crucial roles in asset distribution and continuity planning. 

Let’s break down these key governance roles, explaining their responsibilities and significance in making DIFC Foundations an essential tool for long-term wealth and business planning. 

Who Runs the DIFC Foundation Setup? Key Roles and Responsibilities 

Founder 

The Founder is the individual or entity that establishes the DIFC foundation setup and provides its initial assets. Unlike other corporate structures, DIFC Foundations do not have a share capital requirement, meaning there is no minimum contribution needed. The founder sets out the foundation’s purpose and structure, ensuring that it aligns with their long-term vision, whether it’s for wealth preservation, family succession, or philanthropy. 

Council 

The Council is responsible for managing the foundation’s assets and ensuring its objectives are met. This governing body plays a pivotal role in decision-making and administration. Key governance points include: 

• A council must have at least two members, who can be individuals or corporate entities. 

• The Founder is permitted to be a council member. 

• A council member cannot also serve as the Guardian to maintain oversight and accountability. 

Guardian (Optional) 

The Guardian serves as an oversight role, ensuring that the foundation operates according to the founder’s wishes. This role is optional except in cases where the DIFC foundation setup has charitable or specific non-charitable objects, where it becomes a mandatory position. A Guardian can be either an individual or a corporate entity. 

Beneficiaries/Qualified Recipients 

Beneficiaries (also known as Qualified Recipients) are the individuals or entities designated to benefit from the foundation’s activities. These may include family members, charities, or other organizations chosen by the founder. Interestingly, the founder can also be a beneficiary, allowing them to retain some benefits from the structure while ensuring the foundation’s long-term sustainability. 

Default Recipient 

The Default Recipient is an essential safeguard in DIFC Foundation setup. This individual or entity receives the foundation’s remaining assets in case it is wound up and no specific beneficiaries are identified. This role ensures that assets are properly distributed and do not remain unclaimed, preserving the integrity of the foundation. 

DIFC Foundation Setup: A Flexible and Secure Solution for Wealth and Business Structuring 

DIFC Foundations provide a sophisticated and flexible structuring solution, offering a distinct legal personality separate from their founders. Governed by DIFC laws, they ensure strong legal protection and governance, with limited exceptions. These exceptions arise when assets are located outside DIFC, and the founder’s ability to transfer them is restricted by the jurisdiction where the assets reside. 

They are particularly advantageous for high-net-worth individuals and families with assets across multiple jurisdictions, ensuring seamless succession planning. With DIFC’s well-developed ecosystem supporting financial and non-financial businesses including wealth management, legal advisory, and corporate services it remains a premier jurisdiction for establishing and managing foundations. 

Effortless DIFC Foundation Setup with MS: Secure, Compliant, and Tailored to Your Goals 

At MS, we make setting up a DIFC Foundation effortless, offering comprehensive support from start to finish. As a registered corporate service provider in DIFC, we take care of the entire process, ensuring full compliance with regulatory requirements. Our customized approach ensures your DIFC foundation setup is structured to align with your goals whether for wealth preservation, succession planning, or philanthropy. With MS as your trusted partner, you can secure, grow, and seamlessly transfer your wealth for generations to come. Let us guide you in unlocking the full potential of DIFC Foundations with expert insight and dedicated support. 

Dubai has become the go-to destination for the world’s wealthiest families and investors and for good reason. With its tax-friendly policies, robust financial infrastructure, and strategic location, it offers a level of security and opportunity that few other jurisdictions can match. 

But accumulating wealth is just one part of the equation. The real challenge? Protecting it, managing it efficiently, and ensuring a smooth transition to future generations. That’s where setting up foundations in DIFC is a sophisticated wealth structuring tool designed to give you full control, enhanced privacy, and long-term security. 

Whether you’re looking to shield assets, streamline succession planning, or support philanthropic ventures, setting up foundations in DIFC is the smart choice for those who think beyond today. 

Why Setting up Foundations in DIFC is the Ultimate Wealth Protection Tool? 

A DIFC Foundation is a powerful wealth structuring tool that offers limited liability, ensuring your personal assets remain separate and protected. With zero shareholders, you retain full control without external influence, while flexible governance allows you to tailor the structure to your specific needs. It is an ideal solution for succession and estate planning, helping to prevent disputes and ensure a smooth transition of wealth. Additionally, setting up foundations in DIFC provide confidentiality and robust asset protection, creating a secure framework to safeguard your wealth across generations. 

Your Step-by-Step Guide to Setting Up Foundations in DIFC 

Step 1: Gather Your Key People & Essential Documents 

Setting up foundations in DIFC starts with the right team and proper documentation. To launch your DIFC Foundation efficiently, you’ll need: 

• Founder: The individual or entity establishing the foundation. 

• Council Members: The key decision-makers managing its affairs. 

• Guardian (if applicable): An extra layer of oversight to ensure compliance. 

Pro Tip: Have all Know Your Customer (KYC) documents ready for each key player. Staying ahead on paperwork helps prevent unnecessary delays and speeds up the process. 

Step 2: Define Your Vision & Structure Your Legal Framework 

A DIFC Foundation operates based on two essential legal documents that shape its structure and governance: 

• The Charter: Defines the foundation’s purpose, governance rules, and structural framework. 

• The By-Laws: Outlines decision-making processes, asset distribution, and operational procedures. 

Pro Tip: While DIFC provides standard templates, customizing these documents ensures the foundation aligns with your long-term goals and unique requirements. 

Step 3: Secure Your DIFC Address 

Every DIFC Foundation must have a registered address within the Dubai International Financial Centre (DIFC). You have two options: 

• Lease an office in DIFC if you plan to operate from a physical space. 

• Use a corporate service provider’s registered address for a cost-effective and compliant setup. 

Pro Tip: If you don’t need a physical presence for setting up foundations in DIFC, a corporate service provider can handle compliance and administrative formalities for you. 

Step 4: Submit Your Application to DIFC 

Once all documents are prepared, it’s time to file your application with the DIFC Registrar of Companies. Your submission should include: 

• The Charter & By-Laws – Core governing documents.  

• KYC Documents – For founders and council members. 

• Proof of Registered Address – To verify your foundation’s location. 

Pro Tip: Attention to detail is crucial! Any errors or missing documents may lead to delays or additional queries from the regulators. 

Step 5: Respond to DIFC’s Review & Clarifications 

After submission, the DIFC Registrar will review your application. If any clarifications or additional information are required, responding promptly and accurately will keep the process moving smoothly. 

Pro Tip: Partnering with a legal or advisory expert can help tackle this step seamlessly, ensuring compliance with DIFC regulations. 

Step 6: Receive Final Approvals & Activate Your Foundation 

Once the DIFC Registrar grants approval, your DIFC Foundation is officially established. You can now execute its intended purpose, whether for wealth preservation, succession planning, or philanthropy. 

Pro Tip: Maintaining strong governance and compliance structures will ensure smooth operations and long-term regulatory alignment. 

Step 7: Open a Bank Account & Manage Operations 

With your foundation legally set up, it’s time to establish its financial infrastructure: 

• Open a bank account in the UAE or internationally to manage funds. 

•  Apply for visas (if needed) for council members or staff. 

Pro Tip: Choose a bank familiar with DIFC structures to simplify the account opening process and ensure smooth financial operations. 

MS: The Smart Choice for Setting up Foundations in DIFC & Compliance 

At MS, we specialize in seamless DIFC Foundation setups, providing end-to-end support to ensure a smooth and efficient process. As a registered corporate service provider in DIFC, we handle everything while ensuring full regulatory compliance. Our tailored approach guarantees that your foundation is structured to meet your wealth management, succession planning, or philanthropic goals. With MS as your trusted partner, you gain the confidence to protect, grow, and transfer your wealth across generations. Let us help you maximize the benefits by setting up foundations in DIFC with expert guidance every step of the way. 

As businesses expand and family wealth grows across generations, one question becomes increasingly important: How do you ensure long-term stability and succession while maintaining control? 

For many family-run enterprises, success is deeply tied to key individuals who drive operations, strategy, and growth. However, this key-person dependency can pose a significant risk. Leadership transitions, unforeseen events, and external pressures—such as economic downturns, regulatory changes, and geopolitical shifts—can destabilize even the most successful businesses. At the same time, evolving tax laws, cross-border wealth regulations, and increasing global mobility are forcing families to reconsider traditional wealth structures. 

Families today require a flexible, tax-efficient, and legally secure solution to protect their assets, minimize disputes, and ensure a smooth transition of wealth to future generations. With the benefits of DIFC Foundations, it is emerging as a preferred choice for high-net-worth individuals, business owners, and investors seeking long-term financial security and succession planning without compromising control. 

The Surge in DIFC Foundations: A Testament to Growing Demand 

Dubai International Financial Centre (DIFC) has solidified its position as one of the world’s premier financial hubs. Known for its business-friendly regulatory environment, international legal framework, and robust financial ecosystem, DIFC has become a go-to jurisdiction for global families and businesses looking to safeguard their assets and establish succession plans. 

In 2024 alone, family businesses registered in DIFC surged by 33%, increasing from 600 to 800. At the same time, DIFC Foundation structures saw a remarkable 51% rise, reaching a record 671 foundations. This exponential growth underscores the increasing reliance on DIFC as a jurisdiction of choice for asset protection and estate planning. 

What Are the Key Benefits of DIFC Foundation That Make Them the Preferred Wealth Structuring Vehicle? 

A DIFC Foundation is a modern, flexible, and highly secure structure designed for long-term wealth preservation, asset protection, and business continuity. Unlike conventional trusts or offshore holding companies, it offers a unique blend of privacy, legal separation, and governance flexibility, making it an ideal solution for families with multi-generational wealth. 

Here’s why the benefits of DIFC Foundation structures are making them increasingly popular among high-net-worth individuals, entrepreneurs, and business families: 

1. Asset Protection & Privacy: Shielding Your Wealth from External Risks 

One of the primary reasons families opt for a DIFC Foundation is asset protection. When assets are placed under a DIFC Foundation, they are legally separated from the Founder. This structure protects assets from potential claims by governments, creditors, legal disputes, or family conflicts, ensuring that wealth remains safeguarded for future generations. 

DIFC offers a high level of confidentiality, which is one of the key benefits of DIFC Foundation structures. Unlike many other jurisdictions, the names of Founders and Beneficiaries are not publicly disclosed, minimizing exposure to third-party claims, unwanted scrutiny, or reputational risks. This ensures that family wealth remains protected from external pressures while granting the Founder full control over succession planning. 

2. Maximizing Tax Efficiency with the Benefits of DIFC Foundation 

For families with assets spanning multiple jurisdictions, tax efficiency and inheritance planning are critical considerations. A DIFC Foundation optimizes tax efficiency by ensuring assets are structured in a way that reduces potential tax liabilities, including inheritance and estate taxes. 

DIFC Foundation allows for customized succession planning that aligns with the Founder’s long-term vision. This structure also helps eliminate succession-related conflicts, ensuring business continuity for family-run enterprises. 

3. Global Asset Holding with an Independent Legal Personality 

A DIFC Foundation is not just a wealth-holding structure—it is a legally distinct entity with global reach. One of the key benefits of DIFC Foundation structures is their ability to hold shares in companies, bank accounts, real estate, intellectual property, aviation assets, and investment portfolios across different jurisdictions. 

DIFC Foundation acts independently, allowing it to enter into contracts, hold assets, and make strategic financial decisions on behalf of its beneficiaries. This level of independence ensures a more streamlined, efficient, and legally secure approach to wealth management. 

4. Flexible Governance & Redomiciliation: Adaptability Over Time 

One of the most appealing benefits of DIFC Foundation is its governance flexibility. The Founder retains the ability to modify governance structures post-establishment, ensuring that the Foundation evolves to meet changing family and business needs over time. This mobility ensures continuity while allowing families to react to changing legal or tax environments in different jurisdictions. 

5. Cost-Effective & No Residency Requirement 

Compared to other wealth structuring options, a DIFC Foundation is highly cost-effective. The initial asset commitment is as low as USD 100, making it an accessible solution for families and businesses of all sizes. 

Another key advantage is that Founders and officers do not need to be UAE residents, and there is no requirement for a physical office. A corporate service provider’s address can be used, further reducing operational costs while maintaining full compliance. 

6. Limited Public Disclosure & Minimal Compliance Burden 

DIFC Foundations offer one of the most confidential structures in global wealth management. Unlike companies and trusts, which often require public disclosure of ownership details, DIFC Foundation maintains strict confidentiality with no public listing of Founders, Beneficiaries, or Officers. 

Additionally, compliance requirements are minimal. Unlike other jurisdictions that mandate annual filings, audits, and extensive reporting, DIFC Foundations only need to submit reports when explicitly requested by the DIFC Registrar. This significantly reduces administrative burdens and allows families to focus on their long-term financial objectives without unnecessary regulatory complexities. 

Secure Your Legacy with the Benefits of DIFC Foundation 

In an era of increasing global uncertainty, regulatory scrutiny, and evolving tax laws, families must take a proactive approach to protect their wealth and ensure seamless succession planning. A DIFC Foundation provides a secure, flexible, and internationally recognized structure that safeguards assets, ensures privacy, and enables long-term financial security. 

Whether you are a business owner, investor, or family leader, this structure offers the stability, control, and protection needed for generations to come. 

If you’re looking for a future-proof solution to protect your wealth and ensure a seamless succession plan, a DIFC Foundation setup could be the right fit for you. Contact MS today to explore how we can tailor a DIFC Foundation structure that aligns with your long-term goals. 

Wealth isn’t just about what you build—it’s about how you protect, manage, and pass it on. A DIFC Foundation offers a modern, flexible, and legally robust way to safeguard assets, ensure smooth succession, and structure corporate holdings. Unlike traditional trusts, it provides independent legal personality, perpetual succession, and strong asset protection, giving you full control over your legacy. 

Established within the Dubai International Financial Centre (DIFC)—a globally recognized financial hub—a DIFC Foundation benefits from a transparent regulatory framework, tax efficiency, and international credibility. Whether for family wealth planning, philanthropy, or business structuring, this is a future-proof solution designed to meet today’s needs and tomorrow’s ambitions. 

Cost-effective and efficient, setting up a DIFC Foundation comes with no registration fees and minimal ongoing expenses, making it an accessible yet highly strategic tool for preserving and managing wealth across generations. 

Here is the detailed breakdown of the DIFC foundation setup cost, ensuring full transparency in structuring your foundation efficiently. 

The DIFC Foundation Setup Cost—And Why It’s Worth It 

A DIFC Foundation is both cost-efficient and straightforward, making it an attractive choice for individuals and businesses looking for a secure and flexible wealth structuring solution. Below is a breakdown of the DIFC foundation setup cost and ongoing costs: 

• Registration Fee – $0 (No initial setup cost, making it highly accessible) 

• Annual Operating License Fee – $350 (Payable upon registration and annually thereafter) 

• Data Protection Notification – $750 

• Data Protection Renewal – $250 (Yearly) 

• Confirmation Statement – $300 (Yearly) 

• Knowledge and Innovation Fee – $5.45 (A standard regulatory charge applicable to all DIFC entities) 

The affordable DIFC foundation setup cost and maintenance costs, combined with strong legal protections and global recognition, a DIFC Foundation offers an efficient and strategic structure for wealth management, succession planning, and corporate governance. 

Beyond DIFC Foundation Setup Cost: Tax Benefits, Legal Strength, and Global Recognition 

A DIFC Foundation is a strategic solution for asset protection, succession planning, and corporate structuring, offering a strong legal framework, global recognition, and regulatory clarity. Whether for families preserving generational wealth or businesses structuring corporate assets, it provides a flexible, future-ready platform that aligns with both personal and commercial objectives. 

The recent UAE corporate tax update under Ministerial Decision No. 261 of 2024, which allows qualifying family foundations to be exempt from corporate tax makes the DIFC foundations more appealing. This update enhances the attractiveness of DIFC Foundations as a tax-efficient structure, ensuring that wealth is managed and transferred without unnecessary tax burdens. With the right structuring, families can enjoy greater financial security, enhanced asset protection, and reduced tax liabilities, making this an even more compelling choice for long-term planning. 

With minimal DIFC foundation setup cost, streamlined administration, and built-in legal protections, a DIFC Foundation stands as one of the most effective tools for safeguarding wealth, ensuring business continuity, and securing a lasting legacy in today’s evolving financial landscape. 

Your Wealth, Your Vision – MS to Ensure a Smooth DIFC Foundation Setup 

Setting up a DIFC Foundation requires precision, expertise, and in-depth regulatory knowledge—and that’s where MS comes in. As a leading corporate service provider in DIFC, we specialize in seamless foundation setup, regulatory compliance, and ongoing governance support, ensuring that your structure is built for long-term success. 

With years of experience in DIFC and deep expertise in corporate structuring, our team simplifies the process, handling everything from registration to compliance so you can focus on what matters most—protecting and growing your wealth. Whether you’re establishing a foundation for succession planning, asset protection, or business structuring, MS provides tailored solutions that align with your specific needs. 

Let’s build your legacy together. Partner with MS for a smooth, efficient, and expertly managed DIFC Foundation setup. Reach out to our team today!