TRW & Co · Private wealth
ADGM Foundations: Setup and Uses
An ADGM foundation setup gives a family a separate legal entity in Abu Dhabi to hold assets and plan succession, with confidential beneficiary details and initial assets of as little as USD 100. This guide covers registration, exempt and non-exempt applicants, the council and guardian, reserved powers, beneficiary rights, tax and practical uses.
Key pointA guardian is optional while a founder lives but compulsory once none survives, so name a successor guardian in the by-laws now. Otherwise a councillor must ask the ADGM Courts to appoint one at the moment the family can least afford delay.
At a glance
First UAE regime
The ADGM Foundations Regulations 2017, enacted on 14 August 2017, made ADGM the first jurisdiction in the UAE to offer foundations.
USD 100 initial assets
The charter must require initial assets worth USD 100 or the equivalent in another currency before the Registrar will register the foundation.
Council of two
A council of at least two councillors manages the assets, owing duties of good faith, independent judgement and reasonable care to the foundation.
Names kept confidential
Councillors, beneficiaries, guardians and beneficial owners of corporate founders are disclosed to the Registrar confidentially, not on the public register.
Service provider rule
Non-exempt foundations must appoint an ADGM-registered company service provider; exempt applicants with substantial UAE resources need not.
Swipe or scroll →
An ADGM foundation setup is an online registration with the ADGM Registration Authority under the ADGM Foundations Regulations 2017. The founder files a written charter, a declaration of compliance, the fee, a licence application and a confidential disclosure naming councillors, beneficiaries and any guardian. The result is a separate legal entity, run by a council of at least two, that families use to hold assets and plan succession, with initial assets of as little as USD 100.
This article explains the incorporation route, exempt and non-exempt applicants, the council and guardian, reserved powers, beneficiary rights, confidentiality, tax and the uses families make of ADGM foundations. For a wider comparison, see our article on foundations and trusts in the UAE and our guide to DIFC foundations.
ADGM foundation setup: the short answer
- Legal basis. The ADGM Foundations Regulations 2017, enacted on 14 August 2017, which made ADGM the first UAE jurisdiction to offer foundations.
- Minimum assets. The charter must require initial assets worth USD 100 or the equivalent in another currency.
- People. One or more founders, a council of at least two councillors, a guardian (optional while a founder is alive, compulsory afterwards) and a designee who benefits if there is no other beneficiary.
- Service provider. Non-exempt foundations must appoint an ADGM-registered company service provider; exempt applicants that show substantial UAE resources and adequate governance need not.
- Privacy. Councillors, beneficiaries, guardians and beneficial owners of corporate founders are disclosed to the Registrar confidentially, not on the public register.
The legal framework
The Foundations Regulations were made by the ADGM Board under the founding law of Abu Dhabi Global Market. ADGM applies English common law and equity directly, so concepts such as fiduciary duty are familiar to advisers from common-law countries. Disputes go to the ADGM Courts. The ADGM announcement of the regime describes the policy aims.
A foundation registered in ADGM owns its assets with full legal and beneficial title. Once transferred, they are no longer the founder's and are not the beneficiaries' until distributed. Transfers are protected by firewall provisions: they are not void or liable to be set aside by reference to a foreign rule of forced heirship or another foreign law, and foreign judgments inconsistent with that protection are not recognised. The protection has limits. The ADGM Courts can declare a transfer void to the extent of a creditor's claim if the founder was insolvent at the time or intended to defraud creditors.
ADGM foundations may have any lawful objects that include managing and distributing assets under the charter. The Regulations exclude a charitable purpose from a standard foundation's objects, although ADGM separately promotes public interest purpose foundations, so philanthropic designs need care.
The people and documents
Charter
The charter must state the foundation's name, the founders' names and addresses, its objects and any specific purpose, a description of the initial assets, provisions establishing the council, the designee, any registered agent, and the registered office in ADGM. If the charter does not provide for its own amendment, the founder may still amend it in writing during the founder's lifetime; after that, changes can require a council resolution and a court application.
By-laws
The by-laws set the council's functions and delegation, how councillors and any guardian are appointed, removed and paid, and how beneficiaries are added, removed or excluded. They stay internal, and the council can amend them by unanimous resolution unless the charter or by-laws say otherwise.
Council
The council must have at least two councillors; a founder or a company may serve. Councillors must act in line with the charter, use powers only for their proper purposes, act honestly and in good faith in the foundation's best interests, exercise independent judgement and reasonable care, and declare conflicts. Minors, people with mental incapacity or an undischarged bankruptcy, and dissolved companies cannot serve.
Guardian
While a founder is alive, the charter and by-laws decide whether there is a guardian. When no founder survives, a guardian must be appointed, if necessary by the court. Unless the documents say otherwise, the guardian ensures compliance with the charter, by-laws and Regulations, supervises the council, has access to accounting records and may attend council meetings without a vote. A guardian cannot be relieved of liability for fraud, wilful misconduct or gross negligence.
Reserved powers
The charter or by-laws may reserve to the founder or another person powers to amend the documents, change the objects or dissolve the foundation, direct investments, appoint and remove councillors and guardians, and add or exclude beneficiaries. Any disposal of assets must still be made through a resolution of the council.
Accounting records
The foundation must keep accounting records that are open to inspection by its councillors and any guardian, and failing to keep them is a contravention that can attract a fine. Accounting records, accounts and returns are not made public by the Registrar. Good records are also the practical evidence, in any later dispute or bank review, that the council is genuinely managing the assets for the foundation rather than for the founder personally.
The ADGM foundation setup process
ADGM describes its foundation registration as fully digital, with no personal visit or original hard copies required. A typical ADGM foundation setup runs as follows.
- Decide exempt or non-exempt status. Founders whose group can show substantial resources, experience and personnel in the UAE and adequate governance policies may apply as exempt; others appoint an ADGM-registered company service provider.
- Design the structure. Agree objectives, beneficiaries and the designee, council composition, the guardian's role and reserved powers, with tax advice for each beneficiary's country.
- Draft the charter and by-laws. Prepare the charter for filing and the by-laws for internal use.
- Prepare the confidential disclosure. Collect names and addresses of councillors, beneficiaries, any guardian and beneficial owners of corporate founders.
- File online. Submit the charter, declaration of compliance, fee, licence application and confidential disclosure through the ADGM registration system.
- Receive registration. The Registrar issues the certificate of registration and commercial licence electronically, or asks for more information.
- Endow and transfer assets. Transfer the initial assets and then shares, accounts and property, each subject to its own approvals.
Exempt status is not automatic. The Registrar expects evidence such as UAE commercial licences, staff numbers, governance and compliance policies and group structure charts. Families without an operating group in the UAE should plan on appointing a company service provider from the start.
Beneficiaries, information and confidentiality
Beneficiaries may be named or identified by class or relationship, and may be added, removed or excluded under the by-laws, revocably or irrevocably. A founder may be a beneficiary but can be the sole beneficiary only during their lifetime. If no beneficiary is named, the designee becomes the beneficiary. The by-laws can attach conditions to benefit.
Beneficiaries have the information rights the by-laws give them. These can include copies of the charter, by-laws, accounting records and returns on written request, and a right to petition the court to stop a change of purpose or a dissolution. Accounting records and accounts are not made public by the Registrar.
ADGM states that no individuals' names appear on the public register: the names of councillors, beneficiaries and guardians are held by the Registrar as a confidential disclosure, while the Registrar's internal Foundations Register records details such as the registration number, registered agent and councillors. That disclosure is available to public authorities where the law requires. For many families this privacy is the main reason an ADGM foundation setup is preferred over alternatives.
Common uses compared
| Use | How it works | Design point |
|---|---|---|
| Family holding entity | Foundation owns operating and investment companies | Council voting and guardian veto on major decisions |
| Succession planning | By-laws set beneficiaries and how control passes | Guardian becomes compulsory after the last founder dies |
| Asset protection | Separate ownership with firewall against foreign heirship rules | Transfers made while solvent and without intent to defraud |
| Specified purpose structures | Foundation pursues a stated purpose, with or without beneficiaries | Charitable purposes excluded from standard objects |
| Migration of an existing foundation | Overseas foundations can apply to continue in ADGM | Check the departing jurisdiction's rules |
| Family governance | Charter and by-laws embed family rules and dispute routes | Align with any family charter and shareholder agreements |
An ADGM foundation setup often sits alongside a family office and an Abu Dhabi non-Muslim will for assets that stay outside the structure.
Migration, revocation and dissolution
The Regulations allow an overseas foundation to apply to the Registrar to be registered in ADGM, which is useful for families consolidating structures from other jurisdictions. ADGM foundations can also move out. The Regulations contain rules on revocation and dissolution, including what happens to surplus assets; for a foundation with a specified purpose, surplus assets are dealt with under specific rules. Write a clear termination and distribution mechanism into the charter and by-laws so the outcome is not left to default rules.
ADGM or DIFC?
Families often shortlist both centres. The main differences are privacy, since the DIFC public register names founders and council members; the guardian rules, since a DIFC guardian is mandatory only for purpose foundations; the treatment of charitable objects, which the DIFC permits; and service provider requirements. Location of advisers and banks, and which court the family prefers, often decide the choice. An ADGM foundation setup tends to appeal most to families who value confidentiality and have ties to Abu Dhabi.
Cross-border points
Assets held abroad must be transferred under local law, and some countries may not recognise a foundation or may tax it as a company. Check how beneficiaries' home countries, such as the UK or India, treat distributions, and whether local land should be held through a company owned by the foundation.
Tax treatment
Under Article 17 of the Corporate Tax Law, Federal Decree-Law No. 47 of 2022, a family foundation that meets the conditions can apply to the Federal Tax Authority to be treated as tax transparent. Ministerial Decision No. 261 of 2024, published on 28 October 2024, updated the rules. See the Federal Tax Authority for guidance and our page on corporate tax in the UAE. Foreign tax rules where founders and beneficiaries live usually matter more. TRW & Co coordinates with tax advisers and registered tax agents and is not itself a registered tax agent.
Illustrative scenario: an Abu Dhabi family with a private group
This scenario is illustrative and uses generic parties.
A founder in Abu Dhabi owns a group of companies with several hundred staff and wants a holding vehicle that keeps family names off public records. Because the group has substantial UAE operations and written governance policies, the founder applies as an exempt applicant, using a group company's registered office.
The council has three members: the founder, the eldest child and the group's general counsel. No guardian is appointed during the founder's lifetime, but the by-laws name a trusted adviser to take the role on the founder's death, avoiding a court application. The founder reserves powers to direct investments and to add or exclude beneficiaries. The by-laws give each adult child a right to annual accounts and require family disputes to be mediated before any court proceedings.
Risks and common mistakes
Overusing reserved powers
The Regulations allow a wide range of reserved powers, and founders are tempted to keep them all. If the founder in practice controls every decision, the separation that supports asset protection and favourable foreign tax treatment is weakened. Reserve what is needed, include councillors who exercise real judgement, and keep council minutes showing decisions are made by the council.
No plan for the guardian
A guardian is optional while a founder lives but compulsory once none survives. If the documents do not say who will take over, a councillor must apply to the court for an appointment, causing delay and cost at a sensitive time. Name a successor guardian, or a mechanism for choosing one, in the by-laws from the start.
Designing a charity inside a standard foundation
The Regulations exclude a charitable purpose from a standard foundation's objects. Families who want to fund causes should take advice on whether a public interest purpose structure or another vehicle fits better, and check approvals needed for charitable activity in the UAE and recipient countries.
Leaving assets and people out of the plan
A foundation governs only what it owns. Assets never transferred pass under a will or default inheritance rules, and heirs who are not beneficiaries may challenge transfers abroad. Keep an asset schedule, complete transfers, maintain wills and explain the structure to the family.
What to do next: a checklist
- Decide whether you can qualify as an exempt applicant or need a company service provider.
- Choose councillors, a designee and a guardian or successor guardian.
- Limit reserved powers to what you genuinely need.
- Draft the charter, by-laws and confidential disclosure.
- Take UAE and foreign tax advice, including on Article 17 transparency.
- Plan asset transfers, approvals and wills for assets outside the structure.
- Set a calendar for accounting records, filings and council meetings.
TRW & Co advises on ADGM foundation setup, drafting and family governance, working with company service providers and tax advisers. Where proceedings before the ADGM Courts are needed, we work alongside registered ADGM practitioners; see our page on ADGM Courts proceedings. To plan an ADGM foundation setup, contact our Dubai team or email info@trw.co.
Frequently asked questions
01How do I set up an ADGM foundation?
Registration is online with the ADGM Registration Authority. The application includes a written charter signed by the founders, a declaration of compliance, the registration fee, a licence application and a confidential disclosure of councillors, beneficiaries, any guardian and beneficial owners of corporate founders. Non-exempt applicants file through an ADGM-registered company service provider. On approval, the certificate of registration and commercial licence are issued electronically. Most of the time goes into designing the charter and by-laws and planning asset transfers rather than the filing itself.
02What is the minimum capital for an ADGM foundation?
The charter must require the foundation to have initial assets with a value of USD 100 or its equivalent in another currency. This is a registration requirement, not a guide to what the foundation should hold. Further assets can be added after registration. Budget separately for the company service provider, registered office, annual fees and the cost of transferring shares, property and accounts into the foundation, which are usually far larger than the initial endowment.
03Does an ADGM foundation need a guardian?
Not while a founder is alive, unless the charter or by-laws require one. When no founder survives, a guardian must be appointed, by the person empowered in the documents or, failing that, by the court on a councillor's application. The guardian supervises the council, ensures compliance with the charter and by-laws, can access accounting records and may attend council meetings without voting. Naming a successor guardian in the by-laws avoids a court application later.
04Are ADGM foundations confidential?
Largely. The names and addresses of councillors, beneficiaries, any guardian and beneficial owners of corporate founders are provided to the Registrar as a confidential disclosure and are not shown on the public register. Accounting records and accounts are not made public either. The Registrar may disclose information to public authorities where the law requires, and banks will still carry out their own due diligence. This level of privacy is a key difference from the DIFC register.
05What is an exempt applicant for an ADGM foundation?
An exempt applicant is one that satisfies the Registrar that it has substantial resources, experience and personnel in the UAE and adequate governance policies and procedures. It need not appoint a company service provider and can use the registered office of a parent or related entity. Evidence can include UAE commercial licences, staff numbers, organisation charts and policies on governance, compliance and anti-money laundering. Applicants that cannot show this must appoint an ADGM-registered company service provider.
06Can an ADGM foundation be used for charity?
The Foundations Regulations exclude a charitable purpose from a standard foundation's objects, so a foundation set up to benefit a family cannot simply be given charitable objects. ADGM does promote public interest purpose foundations, and families with philanthropic goals should take advice on the right structure. Charitable activity in the UAE, such as public fundraising, may also need approval from the relevant authorities, and cross-border grants should be checked against the rules of recipient countries.
Sources and official materials
- ADGM Foundations Regulations 2017 — Charter, council, guardian, beneficiaries, firewall and confidentiality
- ADGM launches first foundations regime in the UAE — Announcement of the regime
- ADGM Foundations Regime overview — Exempt and non-exempt applicants, USD 100 initial assets
- Trusts in ADGM — How ADGM trusts differ from foundations
- Federal Tax Authority — Corporate tax guidance, including family foundations
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
