Wealth structuring in the UAE has evolved rapidly, with the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) emerging as leading jurisdictions for asset protection, succession planning and family governance.
Nora Al Muhamad of Gateley Middle East shares how we can help clients understand the key differences between foundations and trusts, two of the most powerful tools for long-term wealth preservation in the region. Whether you’re a family business owner, entrepreneur or international investor, choosing the right structure is essential for protecting your assets and ensuring your legacy.
What defines a trust?
- No separate legal personality: a settlor transfers assets to a trustee, who holds legal title and manages the trust assets for the benefit of the beneficiaries according to a trust deed.
- Flexible distribution mechanisms: suitable for families with changing needs.
- Private estate planning: trusts are preferred for families where private arrangements govern how assets are held for the beneficiaries and for those familiar with common-law frameworks.
What defines a foundation?
- Has a separate legal personality and is able to own assets independently: a foundation is a separate legal entity, similar to a company but with beneficiaries instead of shareholders. Assets are allocated by a founder, owned legally by the foundation and managed by a council, sometimes overseen by a guardian.
- Ideal for long-term succession: foundations can continue indefinitely.
- Family governance: foundations are preferred where the founder wishes to put in place governance mechanisms and retain control over how assets are distributed to their beneficiaries.
Key differences between trusts and foundations
Trusts and foundations differ mainly in their legal status, governance and flexibility. A trust has no legal personality and relies on a trustee to hold and manage assets, whereas a foundation is a separate legal entity that owns assets in its own name.
They are governed by different documents: trusts use a trust deed, while foundations rely on a charter and by laws. Control also varies, with trustees holding primary authority in a trust, while foundations allow founders to retain some influence through their governance structure.
Registration requirements also vary; trusts may or may not need to be registered depending on the jurisdiction, while foundations must be registered in both the DIFC and ADGM. Each structure is subject to its own legislation.
Finally, trusts cannot legally own UAE real estate, whereas foundations face no such restrictions and can hold a wider range of assets.
Which structure should you choose?
Selecting the right structure is a highly personal decision and depends on far more than the legal features of trusts and foundations. The nature of your assets, your family dynamics, your long-term intentions and the level of control you wish to retain all play a central role in determining the most suitable approach.
As an international law firm, Gateley Middle East works closely with clients to understand their objectives in detail and to identify the structure, and jurisdiction, that best aligns with their circumstances. This includes considering how assets will be managed during your lifetime, how they should pass to future generations, and what governance framework will support your family’s values and long-term vision.
Backed by deep experience in DIFC and ADGM structuring, our family business experience, ability to draft wills, support from our UK-based teams and being licensed to act as a registered agent for such structures in the DIFC, we can provide a seamless, one-stop solution for your succession planning.
Whether you require flexibility, privacy, long-term continuity or a more formal governance model, we help you evaluate the options and build a structure that protects your wealth and supports your family’s future with clarity and confidence.