private clients / structuring / difc foundation
DIFC foundations for private wealth structuring
01_introduction
Families whose assets sit across more than one country face a gap: nothing stands between those assets and the events that can unwind them, whether a claim against a business, a foreign forced-heirship rule, or a death without clear instructions. A DIFC foundation closes that gap. It is a legal person that owns assets in its own name, so what is transferred in is no longer held by any individual, sits outside the personal estate, and passes on the terms the family sets. It is established in the DIFC under the DIFC Foundations Law, as part of GCG’s wider Wealth structuring (hub) work for private clients.
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01
Why would a family choose a DIFC foundation over an offshore trust?
Why would a family choose a DIFC foundation over an offshore trust?
A trust is a relationship: a trustee holds assets and owes duties to beneficiaries. A foundation is an entity that holds assets in its own name, run by a council under a charter the family sets.
Founders who want to keep some defined influence, rather than hand assets to a trustee, tend to prefer it. GCG sets out the full comparison in DIFC foundation vs offshore trust.
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What can a DIFC foundation actually hold, and what can it not?
What can a DIFC foundation actually hold, and what can it not?
A DIFC foundation is built to hold and preserve assets rather than to trade. It can hold:
- Shares in operating and holding companies
- Real estate, held through the appropriate ownership route
- Investment portfolios and cash
- Intellectual property
- Interests in other structures
It is not built to run a business in its own name. Where a family also wants an operating entity, that sits as a separate layer beneath the foundation, through, for example, DIFC company formation.
03
How does a foundation protect assets differently from a company structure?
How does a foundation protect assets differently from a company structure?
A company gives limited liability, but its shares stay personal assets that can be inherited, divided, frozen or claimed. A foundation changes what is owned: transfer assets in and the individual no longer holds them, so there are no shares to inherit or divide.
Assets inside it sit outside the personal estate and are treated differently from directly held assets when claims, disputes or foreign inheritance rules arise.
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How GCG sets up a DIFC foundation
GCG starts with the assets, not the structure:
holdings are mapped first, and a foundation is recommended only where it fits what those assets need. The charter is drafted to the family’s own intentions and reviewed by Peter Ivantsov before it is put in place. GCG builds and maintains the structure; it does not manage the money within it.
Speak to GCG about a DIFC foundation
A first conversation establishes what your assets need before any structure is recommended.
04_faq
Does a DIFC foundation need a charitable purpose to be valid?
No. A DIFC foundation can be established for the benefit of named persons, for a purpose, or for a combination of the two. A charitable or philanthropic purpose is one option, not a requirement. Most family foundations are set up for the benefit of the founder’s family and future generations.
How many councillors does a DIFC foundation need at a minimum?
A DIFC foundation must have a council of at least two members. The council administers the foundation’s assets and carries out its objects, and GCG sets its composition when the structure is drafted.
How is a DIFC foundation different from an ADGM foundation?
Both are foundations with separate legal personality, established in a UAE common-law financial centre. A DIFC foundation is established in the Dubai International Financial Centre under the DIFC Foundations Law. An ADGM foundation is established in the Abu Dhabi Global Market under the ADGM Foundations Regulations. The practical differences sit in guardian requirements, registration and ongoing filing, and where the family wants the structure based. GCG covers the comparison in full on the ADGM foundation page.
What is the cost of setting up and maintaining a DIFC foundation?
Cost depends on how the structure is built: the assets going in, the number of underlying entities, whether a guardian is appointed, and the ongoing administration required. GCG provides a fee estimate once the structure is scoped, rather than a single figure that would not reflect the work involved.
Can a foundation be used instead of a will for succession planning?
A foundation and a will do different jobs, and many families use both. Assets held inside a foundation pass according to its charter and by-laws, without forming part of the estate that a will governs. Assets held personally, outside the foundation, still pass under a will. A foundation can carry the succession of the assets placed into it, which is often the larger part of a family’s wealth, while a Wills (pillar) covers what remains held directly. GCG structures the two together with the family’s wider Succession (pillar) plan so they do not conflict.