The ADGM Foundation

Foundations are a civil-law idea — Liechtenstein, Panama, the Netherlands — that common-law jurisdictions have adopted because they solve a problem trusts solve awkwardly. A trust is a relationship: trustees hold legal title, beneficiaries hold equitable interests, and nothing in that arrangement is a person. That works, and it also means every contract is signed by a trustee in that capacity, every bank has to understand the trust deed, and a change of trustee is an event.

A Foundation is a thing. It owns its assets outright, signs in its own name, and carries on when the people around it change. ADGM’s Foundations Regulations 2017 set it up with governance borrowed from company law: the Council owes statutory duties similar to the common law and equitable duties imposed on company directors [ADGM — Foundations regime].

The result is a structure a bank’s onboarding team can read quickly, which — for anyone who has tried to open an account for a discretionary trust — is not a small advantage.

Both are available; they are not interchangeable.

The Foundation suits founders who want to retain visible, structured control through a constitution — a Charter and By-Laws — and who value the entity being able to act in its own name. It suits holding operating businesses and property, and it deals better with counterparties who find trusts unfamiliar.

A trust suits arrangements where the flexibility of trustee discretion is the point, and where the structure will be read by advisers in jurisdictions that have understood trusts for centuries.

In practice the choice is often settled by two things: whether the founder wants a constitution or a discretion, and how the family’s existing advisers think. Neither is a technical answer, and anyone who gives you a technical answer without asking those questions is selling a product.

Note also the combination that is common in practice: a Foundation sitting above one or more SPVs, so the Foundation handles succession and each SPV ring-fences an asset.

The Founder

Each natural or legal person who subscribes their name to the Charter and endows the Foundation with a portion of its initial assets. The Founder may — but need not — also be a council member and a beneficiary [ADGM Foundations Regulations 2017].

The Council

The Council runs the Foundation and must consist of At least two councillors[ADGM Foundations Regulations 2017]. Its members carry statutory duties modelled on directors’ duties, which is what stops “the founder controls everything” being the operative reality of the structure.

The Guardian

The Guardian supervises the Council and ensures it acts in accordance with the Charter and By-Laws. Appointment is optional during the Founder’s lifetime and compulsory upon the Founder’s death [ADGM — Foundations regime].

That rule is the heart of the design, and it is worth pausing on. While the Founder is alive they can watch the Council themselves. Once they are not, somebody must, or the Council supervises itself — which is precisely the moment a succession structure is tested. Choosing the Guardian is therefore a more consequential decision than it appears at formation, when it is optional and easy to defer.

ADGM adds that all Foundation roles can be performed by either individuals or body corporates [ADGM — Foundations regime], which matters where professional continuity is wanted rather than a named individual who will also, eventually, die.

The ADGM Foundations Regulations include firewall provisionsdesigned to assist in protecting the rights of beneficiaries and preserving the Foundation’s assets from bankruptcy claims, claims in the event of divorce, and the effect of forced heirship rules [ADGM — Foundations regime].

Forced heirship is the one that brings most people to this page. Many legal systems prescribe how an estate must be divided regardless of what the deceased wanted. A structure whose governing law resists the importation of those rules is the point of the exercise for a great many international families.

Read ADGM’s wording carefully, though: “designed to assist in protecting”. That hedge is theirs and it is honest. Firewall provisions govern how ADGM law and ADGM Courts treat a claim. They do not bind a foreign court applying its own conflict rules to assets within its own reach, and no structure anywhere does. Anyone who tells you a Foundation makes assets untouchable is overselling — and on this subject the overselling tends to surface at the worst possible moment, years later, when nobody involved in the sale is still around.

The practical implication is that a Foundation is strongest where the assets, the structure and the forum align, and weakest where the substantive assets sit in a jurisdiction that will simply apply its own law to them.

ADGM states that Foundations have limited public disclosure with no individuals’ names on the public register, while there is full disclosure to the Registrar [ADGM — Foundations regime]. ADGM frames this explicitly as a balance — preserving client confidentiality “whilst maintaining transparency where required, in order to fulfil the objectives of ADGM in relation to reporting standards and international treaties to which UAE is party”.

For most private clients this reaches the objective more directly than the Restricted Scope Companydoes, and without the RSC’s requirement to be a subsidiary of a qualifying parent or the additional USD 3,100[ADGM RA — Schedule of Fees].

As always: this is public-register disclosure, not anonymity. Beneficial ownership reporting, tax residence and bank due diligence are unaffected.

Succession. The core case. Assets are held by an entity that does not die, under a constitution the Founder wrote, supervised after their death by a Guardian they chose.

Holding a family’s operating businesses. The Foundation sits at the top; shares in trading companies sit beneath it, often through SPVs so that each business is ring-fenced.

Consolidating international assets. Property, portfolios and interests across several countries brought under one governing law and one forum, rather than a patchwork of local wills.

Philanthropy. A Foundation must be established with one or more lawful objectives [ADGM RA — Schedule of Fees], and those objectives need not be a family.

Migration of an existing structure. ADGM permits redomiciliation of Foundations into and out of ADGM [ADGM — Foundations regime] — so an existing foundation elsewhere can potentially be moved rather than unwound and rebuilt.

What the Registrar wants, in outline [ADGM — Foundations regime]:

• The Foundation Charter — a model Charter is available for use — and the By-Laws. Together these are the constitution: objects, how the Council decides, what the Guardian may do, how beneficiaries are treated.
• Details of the Founder, Councillors, Guardian and beneficiaries, or of a Designee where there are no beneficiaries, with ID documents and evidence of appointment.
• Initial assets of at least USD 100[ADGM — Foundations regime].
• A registered office address in ADGM. ADGM states there is no physical office requirement for Foundations, but the registered address is mandatory [ADGM — Foundations regime].
• A company service provider, where the Foundation is non-exempt — in which case appointment is mandatory and the CSP normally provides the registered address.

The process is fully digital, and ADGM states that no attestation is required for documents [ADGM — Foundations regime] — materially lighter than jurisdictions requiring embassy legalisation.

ADGM quotes 3–5 days[ADGM — Setting up FAQs] to set up a new foundation once the Registrar has all required information [ADGM — Setting up FAQs], which is quicker than its general 10-business-day expectation. As ever, “once the Registrar has everything” is where the real time goes — and for a Foundation that means the Charter and By-Laws, which are drafting exercises, not forms.

ADGM’s published Registration Authority fees [ADGM RA — Schedule of Fees]:

• Name reservation — USD 200
• Application for registration — USD 300
• Commercial licence — USD 200
• Business activity fee — none
• Data protection — USD 300
• Total to register — USD 1,000[ADGM RA — Schedule of Fees]
• Annual renewal — USD 500 (licence USD 200 + data protection USD 300)

A Foundation attracts no business activity fee at all, which is what makes it the least expensive structure on ADGM’s schedule — cheaper to register than an SPV at USD 1,900[ADGM RA — Schedule of Fees], and dramatically cheaper than a non-financial company at USD 5,800[ADGM RA — Schedule of Fees].

Separately, the Foundation must be endowed. The floor is USD 100[ADGM — Foundations regime], and that is a formation requirement rather than a meaningful funding level.

What these figures exclude: the registered office, the company service provider where one is required, and — the real cost of a Foundation — the drafting. A Charter and By-Laws that actually reflect a family’s intentions are legal work, and they are where the money and the value both sit. A cheap Foundation with a copied Charter is a false economy that surfaces exactly once, at the worst time.

Figures from the ADGM Schedule of Fees, version dated January 2025. Fees, tax rules and requirements change. Verify current figures with the ADGM Registration Authority, the FSRA and the UAE Ministry of Finance before acting. This page is general information, not legal or tax advice.

• It is not a tax structure.UAE corporate tax is federal and the Qualifying Free Zone Person test applies. A Foundation does not change your tax residence, nor anyone else’s.
• It does not make assets untouchable.Firewall provisions are “designed to assist”, in ADGM’s own words, and cannot bind every foreign court.
• It does not work retrospectively. Transferring assets into a structure once a claim, a divorce or an insolvency is in prospect invites exactly the challenge you were trying to avoid. Foundations are built in calm weather.
• It is not anonymity. Full disclosure goes to the Registrar.
• It does not remove the need for advice in the asset’s jurisdiction. A Foundation holding French property still meets French law about French property.