DIFC and ADGM foundations are common-law foundations with their own courts. Both hold shares and property and govern succession without probate. Formation and charter are handled by licensed law firms; Exit Palm coordinates and implements. As of 09/2026.
Why these two exist
The Emirates have two jurisdictions operating under common law with their own English-language courts: the DIFC in Dubai and the ADGM in Abu Dhabi. Foundations, trusts and fund structures arise only there — the other zones provide no basis for them.
A foundation is something other than a trust. It is a separate legal person without shareholders that holds assets under a charter and by-laws and is administered by a council. Because it has legal capacity of its own, it can hold accounts, own shares and sue — which makes it more tangible for banks than a trust.
The three differences that matter
1. How the law is applied. ADGM adopts English law directly, including ongoing case law. DIFC has its own codified rulebook, oriented on common law but developed independently. For advisers from the English legal tradition ADGM is often more familiar; DIFC in turn sits closer to Dubai's land department and banks.
2. Cost and processing times. Both sit well above a RAK ICC structure. Between DIFC and ADGM the differences are smaller than the gap to the low-cost zones — and they change. Deciding on price alone means deciding on the wrong criterion.
3. Proximity to the operating business. If the operating company sits in Dubai and property in the emirate is to be held, much speaks for DIFC. If the family office and fund environment in Abu Dhabi matters, much speaks for ADGM.
What a foundation is good for
| Purpose | What it achieves | |---|---| | Succession | shares and property do not enter the estate; by-laws govern who receives what and when | | Separating ownership from control | the founder can retain influence without being the owner | | An umbrella over several companies | operating companies, shareholdings and property under one roof | | Order within the family | minor children, several marriages, siblings holding stakes |
The second point is also the most delicate. That very separation is the sensitive part for tax and belongs reviewed before it is built — not after.
Is the foundation recognised as opaque at home, or attributed to the founder? Does transferring shares trigger exit or deemed-disposal taxation? Does gift tax arise on endowment, and in which country? We raise these questions — your tax adviser and a law firm are the ones who may answer them.
When a foundation is not the answer
In many cases a holding is enough. It is cheaper, easier to explain and more bankable. A foundation pays off when wealth is to be ordered across generations — not when a single layer above the operating company is all that is needed.
And if the structure would have to be rebuilt in five years anyway, it is too early. A foundation that has to be set up again costs more than the one established cleanly later.
What we recommend
First check whether a holding suffices. If not, bring the law firm in early — they draft the charter, not we. Exit Palm coordinates, documents and implements the operational parts: companies, licences, accounts, visas.
Whether a foundation is the right tool for you is what the first consultation is for.
Exit Palm does not provide legal or tax advice. For legal and tax questions we work with licensed partners in Germany and the UAE. All information without warranty, as of the date shown.