GCG Structuring

private clients / structuring / adgm foundation

ADGM foundations for asset protection and succession

01_introduction

An ADGM foundation does the same job as a DIFC foundation, but sits in the Abu Dhabi Global Market under the ADGM Foundations Regulations. It is the more coherent choice where a family already has an Abu Dhabi connection or is building alongside other ADGM entities set up through ADGM company formation. It is part of GCG’s wider Wealth structuring (hub) work.

02

01
What makes an ADGM foundation different from a DIFC foundation?

The differences are narrower than families expect. The two structures share the same foundations concept and most features. Both:

  • Hold assets in their own name
  • Are run by a council
  • Can appoint a guardian
  • Can be set up for the benefit of persons, for a purpose, or for both

What differs is the governing rules and the centre: an ADGM foundation follows the ADGM Foundations Regulations, so guardian requirements, registration and filing follow the ADGM framework. For a family the deciding factors are practical, which centre the rest of the structure sits in and where advisors and banking sit. The deeper foundation-versus-trust question is set out in DIFC foundation vs offshore trust.

How long does it take to set up an ADGM foundation?

 

Registration itself is a defined, quick step. The time is in the work before it.

 

Once intentions are settled and assets identified, what determines the timeline is:

  • Agreeing who benefits, and on what terms
  • Deciding council and guardian arrangements
  • Preparing each asset for transfer into the structure

Registration itself is a defined, quick step; the time is in the work before it.

Once intentions are settled and assets identified, what determines the timeline is:

  • Agreeing who benefits, and on what terms
  • Deciding council and guardian arrangements
  • Preparing each asset for transfer into the structure

GCG scopes that groundwork at the start, so registration is not held up by decisions left open.

03

How GCG sets up an ADGM foundation

GCG does not start from a centre.

The family’s assets and intentions are mapped first, and Abu Dhabi is recommended only where the analysis points there, whether because the rest of the structure sits in the ADGM or because the family already has a footprint there. From that point the foundation is built to the same standard as any GCG structure: the charter and by-laws drafted to the family’s position, the council and any guardian set to the control the family wants, and the structure reviewed by Peter Ivantsov before it is registered. GCG builds and maintains it; it does not manage the assets within it.

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Speak to GCG about an ADGM foundation

Whether an ADGM or DIFC foundation fits depends on your assets and where the rest of your structure sits. A first conversation establishes that before any structure is recommended.

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04_faq

The UAE does not levy personal income tax on individuals. A foundation is not transparent automatically. To be treated as a family foundation, and taxed on a look-through basis as if its assets were held directly by the beneficiaries, it must apply to the Federal Tax Authority. Approval turns on the foundation not carrying on any activity that would count as a business if the founder or a beneficiary did it directly, which is the condition that most often decides whether a structure qualifies. GCG confirms the position before the structure is built, because it shapes what the foundation can hold and do.

Yes while a founder is living, within the limits the charter and by-laws set. The position changes after the last founder has died: an amendment made by the council then requires confirmation from the ADGM Court, which can modify or refuse it. That is the reason to settle the amendment power deliberately at the outset, deciding which terms can change and which are fixed, rather than leaving it to be resolved later. GCG sets that when the documents are drafted, to match what the family wants to keep open and what it wants to lock.

A foundation is built to continue beyond the founder. Because the foundation, not the founder, owns the assets, the founder’s death does not put those assets into the personal estate or through probate. The council continues to administer the foundation according to the charter and by-laws, and the assets are held for or passed to the beneficiaries on the terms already set. This continuity is one of the main reasons families use a foundation for Succession (pillar).

An ADGM foundation has continuing obligations to the ADGM Registration Authority, including keeping its records current and meeting the centre’s filing requirements. GCG can maintain the structure so those obligations are met on time.