INTRODUCTION

ADGM Foundations Regime has been introduced as an alternative to trusts for financial planning and structuring.  ADGM Foundations allow the personal and corporate community to locally access a much sought after product from a world-class international financial centre for the first time in the United Arab Emirates, as well as offering an attractive alternative jurisdiction to international clients.


The regime was developed in close consultation with the advisory community to be highly flexible and to strike an appropriate balance between transparency and discretion, as well as competiveness in terms of cost and ease of process, with features benchmarked globally. 

ADGM Foundations are fast and simple to set up and manage (registered agents are voluntary), with straightforward ongoing reporting requirements.
ADGM Foundations can be used for a variety of purposes, including but not limited to, wealth management and preservation, family succession planning, tax planning, asset protection, corporate structuring, and for public interest foundations (excluding charities).   

 

BENEFITS OF FOUNDATIONS:

• Offers enhanced asset protection
• Provides a robust governance structure
• Additional assurance through guardian oversight
• Distinct legal personality, unlike a Trust
• Separation of liability whilst maintaining control of assets
• Perpetual existence after lifetime of the founder

 

WHY CHOOSE ADGM FOUNDATION's REGIME?

• Locally based option available for the first time
• Developed in close consultation with global advisors to meet local and international needs
• Benchmarked globally to offer high levels of flexibility
• Strikes an appropriate balance between transparency and discretion
• Quick and easy fully digital registration process, and competitively priced
• Additional comfort in using a reputable, world-class international financial centre
• Proximity to a range of internationally leading advisers in the ADGM community

 

HOW TO APPLY  

The Foundations application process is quick, simple and can be completed through the Online Registry Solution which can be accessed by clicking here.

 Reg Process Foundations

REGULATIONS

To view full ADGM Foundations Regulations, please click here.

FEES

 Fees

 

GUDIANCE

Guidance Notes - Incorporation of Foundations

 

MODEL CHARTER & BY-LAW

Model Charter

Model By-Laws

“This Model Foundation Charter is prepared in good faith for guidance purposes only and has no legal force; it sets out the minimum information which must be provided in accordance with subsection 9(2) of the ADGM Foundations Regulations 2017, and should be read in conjunction with the relevant ADGM Regulations and Rules, in particular the ADGM Foundations Regulations 2017, which may change over time without notice.  While Abu Dhabi Global Market (ADGM) makes every effort to ensure the accuracy and completeness of the information provided in this Model Foundation Charter, ADGM makes no representations and/or warranties as to accuracy, completeness, correctness or suitability of the information contained within it.  The information provided in this Model Foundation Charter is not to be deemed, considered or relied upon as financial and/or legal advice and should not be treated as a substitute for specific advice concerning your individual situation(s) obtained from your own financial and/or legal advisers.  Any action you take upon the information provided in this Model Foundation Charter is strictly at your own risk and ADGM will not be liable for any losses and damages in connection with the use of or reliance on information provided in this Model Foundation Charter.”

 

FAQs

ADGM has been working closely with local and international stakeholders and market panel of experts to understand their needs and developed a Foundations regime that addresses the unique requirements of families and asset owners in Abu Dhabi, regionally and globally. The ADGM Foundations Regime is in response to the needs of local and regional stakeholders who like to set up and manage their financials and assets closer to home.

There has also been a strong demand from Private Banks who want to be able to provide locally a full suite of structuring solutions to local and regional clients.

Foundations, like trusts, are used for a variety of purposes including wealth management, planning and preservation. Unlike trusts, however, Foundations are incorporated as a legal entity with their own distinct attributes and legal personality. In this respect foundations are similar to companies but without shareholders, making them suitable for wealth management across generations.

ADGM is continuing to evolve its offering to support local and international families and High Net Worth Individuals to efficiently manage their business and investment interests through several generations to come.

The Foundations regime supplements ADGM’s existing suite of products and services available to families. To date, the ADGM platform has been widely used by local families for structuring business interests, holding companies and Special Purpose Vehicles for holding a wide range of assets, as well as setting up family offices. ADGM also offers to a growing community of highly regarded professional advisory firms with extensive expertise in family wealth management.

For the first time in the UAE, the local private and corporate community and the Private Banks can work together and efficiently deploy this international product for a variety of services including wealth management and preservation, family succession planning, tax planning, asset protection and corporate structuring, without relying on foreign regulations and practice.

 The ADGM Foundations regime and regulations ensure a robust balance of client confidentiality and high standards of transparency under the ADGM’s internationally recognised legislative environment. International clients who seek to effectively manage and supervise their wealth and assets under a competitive and international jurisdiction are able to easily tap on the ADGM Foundations regime.   The ADGM Foundations regime also serves as an alternative to trusts for financial planning and structuring.


• Tax/Access to UAE’s DTTs (subject to the Ministry of Finance Requirements)
• Wealth Management
• Provides a robust governance structure – Foundation Council acts in an equivalent manner to a board of directors.  Council members’ duties are prescribed in the Foundations Regulations.  ADGM Foundations Regulations follow international best practice and set a legislative standard for the foundation council.  This standard includes statutory duties, such as those similar to common law and equitable duties of directors pursuant to the ADGM Companies Regulations 2015. 
• Assurance through Guardian oversight – Guardian supervises the Foundation Council and ensures that it acts in accordance with the Foundation’s Charter and By-Laws.  Appointment of the Guardian is compulsory upon Founder’s death and optional during Founder’s lifetime. 
• Distinct legal personality, unlike a Trust – Having a legal personality provides Foundations with flexibility to enter into contracts and arrangements directly, as a company would be able to.
• Separation of liability whilst maintaining control of assets – Foundation is a distinct legal entity which allows for separation of liability between Founder and the Foundation.
• Perpetual existence after lifetime of Founder – like a company, a Foundation is a perpetual concept, allowing arrangements to continue and therefore providing certainty after the Founder’s death.
• Asset protection mechanisms – increased protection from bankruptcy claims, claims in the event of divorce and from the effect of forced heirship rules. 

Though a foundation operates similarly to a common law trust, it has certain features more akin to a company, such as being incorporated with a separate legal personality and holding assets in its own name on behalf of beneficiaries.  Unlike a company, though, a foundation cannot carry out commercial activities, other than those necessary, ancillary or incidental to its purposes.

A key feature of a foundation (as compared to a common law trust) is the ability of the founder to retain more control over the foundation. 

In contrast, the settlor has a more limited role and, once assets are settled on trust, the duties of trustees are towards the beneficiaries, rather than the settlor.

  • Creating a new type of legal entity with its own distinct attributes;
  • Protecting the confidentiality of the foundation’s arrangements whilst ensuring that the Registrar can access sufficient information;
  • Governance controls and safeguarding the founder’s ability to exercise control over a foundation; and
  • Facilitating migrations from other jurisdictions to ADGM and vice versa
    The ADGM Foundations regime and regulations ensure a robust balance of client confidentiality and high standards of transparency under the ADGM’s internationally recognised legislative environment. International clients who seek to effectively manage and supervise their wealth and assets under a competitive and international jurisdiction are able to easily tap on the ADGM Foundations regime.   The ADGM Foundations regime also serves as an alternative to trusts for financial planning and structuring.

The ADGM Foundations Regime is designed in response to the needs and requirements of the local and international stakeholders, as well as inputs from market experts.  It is developed to enable Private Banks and other service providers to cater to the varying requirements of families and asset owners in Abu Dhabi, regionally and beyond.  ADGM Foundations regime is one of its kind.  On the global scene, these are the jurisdictions that offer a foundations regime, including : 

Civil Law Jurisdictions: - Principality of Liechtenstein - the Netherlands - Austria - Panama - Belgium - Malta - Luxembourg  

Common Law jurisdictions: - St. Kitts - The Bahamas - Antigua and Barbuda - Anguilla - Jersey - Vanuatu - Seychelles- Labuan - Belize - Isle of Man - Mauritius - Cook Islands - Guernsey

The most comparable jurisdictions to ADGM’s foundations regime are Jersey and Guernsey.

 

All ADGM foundations are required to have a physical presence in ADGM, either itself or through its registered agent.   Other jurisdictions have adopted different approaches in respect of the requirement for a registered agent. For example, Guernsey requires that a ‘resident agent’ must be appointed where neither a councilor nor a guardian are licensed fiduciaries, while Jersey requires at least one member of the council to be licensed to conduct foundations business.  We propose to leave it to the discretion of the founder whether to appoint a registered agent.

 

We welcome local, regional and international customers and families to take advantage of the efficient, hassle-free and market—customised Foundations regime to maintain their wealth, assets and financials.   The Foundations regime is anchored by ADGM as an IFC and based on an internationally-aligned legislative structure and framework.  ADGM Foundations regime facilitates migrations from other jurisdictions to ADGM and vice-versa.

ADGM Courts have jurisdiction over ADGM Foundations, as part their overall jurisdiction under Article 13 of Abu Dhabi Law No. 4 of 2013.  The ADGM Foundations Regulations preserve a pro-active role for ADGM Courts.

Like other common law jurisdictions, ADGM has incorporated “asset protection mechanisms” into its Foundations Regime.  These are known as “firewall provisions”, and are a familiar feature in common law trust jurisdictions, as well as Foundations jurisdictions. 


Of course, ADGM encourage founders to obtain independent legal and taxation advice on their proposed structures to ensure that their meet their intended objectives.

For a new entity, it should take about 3-5 days to set up and register their presence at ADGM. The ADGM team will provide the appropriate guidance to assist the entities.

ADGM has sought to balance preserving client confidentiality and maintaining transparency of ownership by splitting the formation process into two (2) separate elements:

Public and Private.

• Public Disclosure: A Foundation Charter, which contains limited information (the name of the foundation and the name of a fiduciary or nominee founder) will be submitted to the Registrar as part of registration requirements.  This would be publicly available (along with the registered address, registration date and service provider) and would allow third parties to verify the existence of the foundation and enable the foundation to demonstrate that it is properly constituted and in good standing.

• Private/Confidential Disclosure Foundation By-Laws governing, for example, the constitution of the foundation council would remain private and would only be provided to the Registrar upon request (and, if requested, would not to be made available for public inspection without consent of the founder).  However, the Foundation By-Laws and other non-public information would be disclosed to governmental authorities in limited circumstances, such as those prescribed in the ADGM Companies Regulations 2015.   

 

The ADGM Foundations regime is benchmarked with international best practices and its fees structure is very competitive.  More importantly, the local, private and corporate community now have the opportunity to work with the Private Banks and wealth managers to plan and execute an array of financial planning, wealth management and asset protection activities locally using ADGM Foundations platform, without relying on foreign jurisdictions.