The Dubai Land Department (“DLD”) recently started registering real estate properties in the name of “DIFC Foundation”. Accordingly, this implies the acceptance of such entities under UAE law making them an appealing solution to individuals or Companies who can potentially benefit from setting up a Foundation. In the case that the Founder of the Foundation is the owner of the property before the transfer, the Transfer Fee will be 0.125%. In any other case the Transfer Fee will be 4%.
What is a DIFC Foundation?
DIFC Foundations are regulated by DIFC Law No. 3 of 2008 (“Foundations Law”). A Foundation is a body corporate with a legal personality separate from that of its Founder(s) and any other person. It can be established for a purpose(s) (charitable or not) and/or to benefit its beneficiaries but it can only carry on commercial activities that are necessary for, and ancillary or incidental to its objects. The Parties to a Foundation are: The Founder(s), Council (2+ individuals or legal entities that can include the Founder), Guardian and Beneficiary/ies.
Benefits of DIFC Foundations
The benefits of setting up a DIFC Foundation include but are not limited to:
- Recognition in the UAE because it is based on civil law jurisdictions (as opposed to the concept of a Trust);
- Regulation according to DIFC laws with no interference from other foreign laws;
- Possibility of re-domiciling the foundation from and to DIFC;
- Can be established for several reasons such as charity, wealth and asset planning and long-term business holding.
How can The Legal Group Help?
The Corporate Division would be pleased to help you set up a DIFC Foundation and advise you on its corporate structure to suit your needs as well as advise you on asset restructuring and wealth planning.