If your primary assets are in Dubai, a DIFC foundation is generally the better choice. If you want simpler governance with a single council member, or you hold global corporate assets or Abu Dhabi property, an ADGM foundation is the better fit.
Both structures are built on common law principles and give you a legally separate entity that holds assets independent of its founder. The difference is in governance requirements, cost, and where your assets are located.
What is a DIFC Foundation?
A DIFC foundation is an independent legal entity that holds assets in its own name, separate from its founders and council members. It combines the corporate personality of a company with the asset-holding function of a trust, and it is governed by the DIFC Foundations Law No. 3 of 2018.
A DIFC foundation must maintain a registered office address inside the DIFC zone at all times and is required to have a council that manages its assets and fulfills its objectives. DIFC is the most common choice for family foundations in the UAE.
How to Set Up a Foundation in DIFC?
To set up a foundation in DIFC, you register through the DIFC online portal, get initial approval, secure a registered address, sign your founding documents, and collect your license. This is how to set up a foundation in DIFC:
Step 1: Apply online
Submit your application through the DIFC portal. You fill in the foundation’s details, who is on the council, and what the foundation is set up to do.
Step 2: Wait for approval
DIFC reviews your application and sends an approval email within 3 to 5 working days.
Step 3: Sort your address
You need an address inside the DIFC zone. This can be a leased office, a co-working desk, or a registered agent’s address if you do not need a physical presence.
Step 4: Appoint your people
You need at least one Founder, at least two Council Members, and an Authorised Signatory. A Guardian is only required if the foundation has a charitable or non-charitable object, and whoever is the Guardian cannot also sit on the council. All financial contributors must be disclosed.
Step 5: Sign your founding documents
You sign the foundation’s Charter and By-Laws digitally. The Charter covers the basics: the name, purpose, and who controls what. The By-Laws set the rules for how the foundation runs day to day. The Charter is required; the By-Laws are optional but worth having.
Step 6: Get your license
DIFC issues your operating license and registration certificate. Your foundation is now legally active.
What is the Cost of a DIFC Foundation?
Setting up a DIFC foundation costs AED 1,285 ($350) for the initial operating license, plus an AED 20 Knowledge and Innovation fee. There is no initial registration fee. If your foundation processes personal data, you have up to 6 months after your license is issued to file your Data Protection notification and pay the processing fee.
Here is a full breakdown of the fees:
Fee | Amount |
Initial Registration Fee | AED 0 |
Initial Operating License Fee | AED 1,285.38 + AED 20 ($350 + $5.45) |
Annual Renewal Operating License Fee | AED 1,285.38 + AED 20 |
Data Protection Fee (if processing personal data) | AED 2,754.38 annually |
Data Protection Fee (if NOT processing personal data) | AED 0 |
New Establishment Card (Normal) | AED 2,269.61 (optional) |
New Establishment Card (Express) | AED 2,409.16 (optional) |
Personnel Sponsorship Agreement Deposit | AED 2,497.30 |
What is an ADGM Foundation?
An ADGM foundation is an independent legal entity established in Abu Dhabi Global Market that holds assets in its own name on behalf of beneficiaries or to fulfill one or more lawful objectives. It has corporate status, meaning it can hold assets, enter contracts, and litigate in its own name.
Like its DIFC counterpart, an ADGM foundation does not issue shares and has no shareholders. The assets inside it are legally separated from the founder. They are commonly used to hold global corporate structures, international investments, and Abu Dhabi real estate.
How to Set Up a Foundation in ADGM?
To set up a foundation in ADGM, you reserve a name, apply for incorporation through the ADGM online registry, appoint the required roles, submit your constitutional documents, and pay the fees. The process is fully online and payment must be cleared before ADGM begins its review.
These are the steps to set up a foundation in ADGM:
Step 1: Reserve your name
Pick a name that includes the word “Foundation” and reserve it through the ADGM registry. This costs AED 734.50 ($200) and has to be approved before you can move to the next step.
Step 2: Apply for incorporation
Submit your application through the ADGM online registry. You declare what the foundation is for and provide details on everyone involved.
Step 3: Appoint your people
You need at least one Founder, one Council Member, and a Guardian. The Council Member runs the foundation. The Guardian’s job is to make sure the council actually follows the founder’s wishes. Unlike DIFC, you only need one council member, which keeps things simple.
Step 4: File your founding documents
Submit the foundation’s Charter and By-Laws to ADGM. These set out the purpose of the foundation and how it is governed.
Step 5: Pay the fees
Pay by card or bank transfer. ADGM will not start reviewing your application until the payment clears.
Step 6: Get your address
You need a registered address inside the ADGM zone to keep the foundation in good standing.
What is the Cost of an ADGM Foundation?
Setting up an ADGM foundation costs AED 3,672.50 ($1,000) in total, plus a mandatory $100 (AED 367.25) fee to file your annual confirmation statement. The annual renewal also costs AED 1,836.25 ($500). Here is the full breakdown:
Fee | Amount |
Name Reservation | AED 735 ($200) |
Application for Incorporation | AED 1,102 ($300) |
Commercial License Fee | AED 735 ($200) |
Data Protection Fee | AED 1,102 ($300) |
Business Activity Fee | AED 0 |
Renewal Fee | AED 1,836.25 ($500) |
What Is the Difference Between ADGM and DIFC Foundations?
The main differences between an ADGM foundation and a DIFC foundation in Dubai are council size, guardian requirements, cost, and which asset types each jurisdiction suits best. If you’re setting up a foundation in UAE, DIFC requires two council members and suits Dubai-based assets. ADGM requires only one council member and is better suited for global holdings or Abu Dhabi real estate.
Feature | DIFC Foundation | ADGM Foundation |
Location | Dubai | Abu Dhabi |
Minimum Council Members | 2 | 1 |
Guardian Required | Only for charitable objects | Yes, by default |
Initial Setup Cost | AED 1,285.38 + AED 20 | AED 3,673 ($1,000) |
Annual Renewal | AED 1,285.38 + AED 20 | AED 1,836 ($500) |
Mandatory Audit | Only if turnover exceeds $5M | Exempt from standard commercial corporate audits |
Best For | Dubai real estate | Global assets, Abu Dhabi property |
Set Up a Foundation in UAE With Momentum
Setting up a DIFC foundation or an ADGM foundation is a long-term decision. Getting the jurisdiction right from the start matters more than most people realise, because restructuring later is time-consuming and costly.
Momentum helps entrepreneurs and families evaluate both options, draft the documents, and coordinate with the relevant registration authorities from start to finish. Contact us today to discuss which jurisdiction fits your structure.
