What is a DIFC Foundation and How Does It Work

1. What is a DIFC Foundation and How Does It Work? Dubai has become a global hub for wealth management, succession planning, and asset protection. One of the most strategic tools for achieving these objectives is the DIFC Foundation. But what exactly is a DIFC Foundation, and how does it work? Understanding DIFC Foundation A DIFC Foundation is a legal entity established under the laws of the Dubai International Financial Centre (DIFC), an independent jurisdiction within the UAE. Unlike traditional corporate entities, a foundation is a hybrid structure that blends the features of a trust and a company, making it ideal for asset protection, estate planning, and philanthropic purposes. DIFC Foundations are governed by the DIFC Foundations Law No. 3 of 2018, offering strong legal certainty and flexibility for both individuals and corporate entities. Key Features of a DIFC Foundation •Legal Personality: It has its own legal personality, meaning it can own assets, enter contracts, and sue or be sued. •Founder: The person who sets up the foundation and defines its objectives. •Council: Similar to a board of directors, responsible for managing the foundation.

2. •Beneficiaries: Individuals or entities that benefit from the foundation's assets or income. •Guardian (optional): Ensures the foundation operates according to its charter and by-laws. •No Shareholders: Unlike companies, foundations have no owners or shareholders. How Does a DIFC Foundation Work? 1.Formation: The founder creates a charter and by-laws, sets the objectives, and registers the foundation with the DIFC Registrar. 2.Asset Transfer: Assets (real estate, shares, intellectual property, etc.) are transferred to the foundation, legally separating them from the founder's personal assets. 3.Management: The council manages the assets in line with the foundation's objectives, while the founder can retain a level of control depending on the structure. 4.Distribution: Profits or benefits can be distributed to beneficiaries based on pre-defined rules, much like a trust. 5.Continuity: DIFC Foundations are designed for longevity and continuity, making them suitable for succession planning and multi-generational wealth transfer. Common Uses of a DIFC Foundation •Wealth & Asset Protection •Estate & Succession Planning •Family Business Governance

3. •Philanthropy & Charitable Giving •Corporate Structuring and Holding Vehicles Advantages of Setting Up a DIFC Foundation •100% foreign ownership •Strong legal and regulatory framework •Protection from forced heirship rules •No requirement to disclose beneficiaries publicly •Flexible governance structure •Tax-efficient environment within DIFC Final Thoughts A DIFC Foundation offers a powerful, legally robust solution for those looking to secure their assets, plan for the future, and create a lasting legacy in the UAE. Whether you're an individual, a family office, or a multinational business, setting up a foundation in DIFC can offer both peace of mind and strategic advantage. Need help setting up a DIFC Foundation? Our experts at Avyanco UK can guide you through the entire process—from drafting the charter to registering your foundation and ensuring full legal compliance. Reference URL - https://bagganeha.livepositively.com/what-is-a- difc-foundation-and-how-does-it-work/