A private foundation in the Dubai Multi Commodities Centre (DMCC) Free Zone is a modern, flexible vehicle for asset holding, succession planning, and private wealth management. It allows founders to consolidate diverse assets under a unified ownership structure, facilitating the further transfer of business or family wealth across generations.
- A DMCC foundation is a separate legal entity: assets transferred to it stop belonging to the founder, and beneficiaries hold no ownership rights until distributions are made.
- Set-up is modest — initial assets of just USD 100, a DMCC-based registered office and a council of at least two councillors.
- Founders can reserve powers to amend the Charter, appoint or remove councillors and beneficiaries, or dissolve the structure entirely.
- Transfers resist foreign forced heirship rules and creditor claims, though fraud or insolvency can void them within a three-year window.
- The confidential By-Laws are never filed with the Registrar, unlike the Charter.
Objects of a DMCC Foundation
The objects (purposes) of a DMCC foundation may include managing its assets and income, as well as distributing such assets and income in accordance with its Charter. As an asset management structure, a private foundation allows for precise determination of who will manage the assets and in what manner, as well as who will be entitled to distributions from the foundation and under what conditions.
As a general rule, a foundation cannot pursue the objects or conduct the activities of a non-profit entity (such as a charity, religious, or cultural organisation). Upon application by the foundation, the Registrar may fully or partially waive this restriction, subject to conditions and limitations on such activities where necessary. However, any such permission may be modified, suspended, or revoked at any time.
The key requirements for the establishment and operation of foundations in DMCC are set out in the DMCCA Foundations Regulations 2026, first published in September 2026 (the Regulations). Certain provisions of the DMCCA Company Regulations 2024 (concerning accounting, disqualification of officers, and grounds for licence suspension or termination) also apply to foundations.
Foundation Assets
A foundation is endowed with initial assets by its founder. These assets may comprise shares and equity interests in companies, real and personal property, various financial assets, intellectual property rights, and other holdings. The foundation’s assets must be managed and distributed solely to achieve its objects, in accordance with its Charter, By-Laws, and the Regulations.
The value of a foundation’s initial assets must be at least USD 100 or the equivalent in another currency approved by the Registrar (Article 11.1). The Charter or By-Laws may provide for the contribution of additional assets to the foundation.
Assets transferred to the foundation become its property under full legal and beneficial ownership, ceasing to be property of the founder. Similarly, the foundation’s assets do not constitute property of any beneficiary unless and until they are distributed to such beneficiary in accordance with the Charter or By-Laws.
Foundation Beneficiaries
A foundation operates in accordance with its objects and for the benefit of its beneficiaries. A beneficiary is an individual or legal entity that may benefit (e.g., receive monetary distributions) from the foundation. A beneficiary may be:
- expressly specified (named) in the Charter or By-Laws; or
- determined by reference to a class of persons or a relationship to another person.
The founder of a foundation may also be its beneficiary (although not expressly stated in the Regulations, this is not prohibited). The procedure for appointing, adding, or removing beneficiaries can be set out in the Charter or By-Laws. Furthermore, the By-Laws may impose specific obligations on a beneficiary as a condition for receiving benefits from the foundation.
A beneficiary possesses no proprietary rights in or to the assets of the foundation (neither ownership rights nor the right to claim assets as their own property), despite any contrary provisions under foreign law. Unless the Charter or By-Laws provide otherwise, foundation assets available for distribution to a beneficiary cannot be alienated in the event of the beneficiary’s bankruptcy, insolvency or liquidation, nor can such assets be seized, sold, attached or otherwise taken in execution.
DMCC Foundation as a Legal Entity
General Requirements
A DMCC foundation is an independent legal entity distinct from its associated parties – including founders, councillors, and beneficiaries. The foundation must be registered in the DMCC Register of Foundations and maintain a valid licence.
The name of the foundation must end with the words “Foundation FZCO” and be set out in full on all official transactions, contracts, promotional materials, invoices, correspondence, and publications. The foundation’s name must fully comply with DMCC corporate naming requirements.
The foundation must maintain a registered office located within the DMCC Free Zone to which all communications and legal notices are addressed. A foundation may – but is not required to – appoint a registered agent. If appointed, the office address of the registered agent may serve as the foundation’s registered office.
A foundation is subject to accounting and auditing obligations set out in Section 11 of the DMCCA Company Regulations. A copy of the foundation’s financial statements and related accounting records must be submitted to the Registrar upon request.
Registration of a Foundation in DMCC
A DMCC foundation may be registered by one or more persons by submitting an application signed by all founders to the Registrar, which must include:
- the foundation’s Charter;
- a declaration of compliance with regulatory requirements;
- “Confidential Disclosed Information”;
- a statement of initial beneficial ownership and control; and
- where a registered agent is appointed – their name, address, and date of appointment.
The application for registration must be accompanied by the requisite registration fee, as determined by the Registrar.
For each registered foundation, the Register of Foundations will maintain the following information:
- the foundation’s name and its DMCC legal entity registration number;
- the name and address of each councillor;
- the date of formation of the foundation;
- details regarding the payment of annual fees; and
- the name and address of the registered agent (if any), along with a history of any changes of registered agent.
Upon request, the Registrar may issue Certificates of Good Standing and Certificates of Incumbency in respect of a foundation.
According to a DMCC press release issued on 23 September 2026, the full launch of foundation registration – along with accompanying guidelines and procedures – was expected “in the coming weeks”. As of mid-October 2026, the DMCC Authority has not yet published formal guidance on foundation setup, application procedures, or the exact fee structure.
Confidential Information
Confidential information required to be disclosed by the founders upon the registration of a DMCC foundation (“Confidential Disclosed Information”) includes the names and addresses of all councillors, the guardian (if any), all named beneficiaries (if any), and all beneficial owners of the founder, where the founder is a legal entity.
The Registrar may disclose this information in all cases required under the rules and regulations in force within the DMCC Free Zone. Such information may be disclosed to the DMCC Authority, anti-money laundering authorities, law enforcement agencies, regulatory bodies, or relevant self-regulatory organisations operating in the financial, auditing, accounting, or legal sectors.
Management of a DMCC Foundation
Foundation Council
A DMCC foundation must have a governing body – a council consisting of at least two councillors (Article 14.1). The duties of the council include achieving the foundation’s objects, managing its assets, and performing any other acts required by the Charter, By-Laws, or the Regulations.
Councillors may be either natural or legal persons, including the founder. A natural person cannot be appointed as a councillor if they:
- are under 18 years of age;
- have been convicted, within the ten years preceding the appointment, of a criminal offence involving dishonesty;
- have been disqualified by the DMCC Authority or a UAE public authority from acting as an officer of a foundation or any other legal entity;
- are an undischarged bankrupt; or
- are deemed unfit by the Registrar.
Councillors are appointed and removed from office in accordance with the Charter and/or By-Laws. If an appointment according to the established procedure is impossible, a founder, guardian, or beneficiary may apply to the Court for the appointment or removal of one or more councillors.
A councillor who commits a breach of duty owed to the foundation is liable for any reduction in the value of the foundation’s assets resulting from such breach. Neither the Charter nor the By-Laws may relieve a councillor from liability for a breach of duty resulting from their own fraud, wilful misconduct, or gross negligence.
Powers Reserved by the Founder
A founder may reserve specific powers allowing them to control and, where necessary, adjust the structure and activities of the foundation. To this end, the Charter or By-Laws may explicitly grant one or more reserved powers to the founder or another designated person, including the right to:
- amend, supplement, or revoke the Charter or By-Laws;
- amend the objects of the foundation or to dissolve it;
- direct or approve the foundation’s investment activities;
- appoint or remove any councillor;
- appoint or remove a guardian;
- add or exclude any beneficiary;
- vary the rights and restrictions applicable to a beneficiary;
- petition the Court to dissolve the foundation; and
- transfer or redomicile a foreign foundation into the DMCC Free Zone.
Even where a reserved power is exercised, any disposition of foundation assets must be made through a resolution of the council.
Guardian
The Charter or By-Laws may provide for the appointment of a guardian during the founder’s lifetime. If there is no surviving founder, appointing a guardian becomes mandatory.
A guardian of a foundation may be a natural or legal person. The guardian must satisfy the same eligibility requirements as councillors (legal age, absence of a criminal record or disqualification, etc.) and cannot simultaneously serve as a councillor or be the sole beneficiary of the foundation.
The primary duties of the guardian are to supervise the management of the foundation and to ensure that the foundation and its council comply with the Charter, By-Laws, and DMCC regulations. Specific powers of the guardian may be set out in the Charter or By-Laws. The guardian must have access to all information necessary to exercise their powers, receive notice of council meetings, and be entitled to attend such meetings (without voting rights on resolutions).
DMCC Foundation Documents
As with similar legal structures, the content of the DMCC foundation’s governing documents – the Charter and By-Laws – is crucial for achieving results that align with the founder’s intentions and the beneficiaries’ interests, as well as for preventing operational deadlocks or the loss of control.
Foundation Charter
The Charter must contain mandatory terms and may include optional provisions as set out in the Regulations. If the Charter has no provisions regarding the constitution of the council, its functions, decision-making procedures, or the appointment, removal, and remuneration of councillors, such provisions must be included in the By-Laws.
| Mandatory Provisions in the Charter | Optional Provisions in the Charter |
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By-Laws
The By-Laws of the foundation (not filed with the Registrar) allow for maximum operational detail regarding the foundation’s procedures and management, including specifying:
- the circumstances under which foundation assets may be distributed, accumulated, or applied;
- the names and addresses of initial councillors and beneficiaries;
- the procedure for adding or excluding beneficiaries on a revocable or irrevocable basis;
- the powers reserved by or granted to any person in relation to the foundation (such as the authority to appoint or remove officers, make investment decisions, or approve asset allocations); and
- the conditions for exercising, restricting, or terminating the rights of beneficiaries.
A copy of the By-Laws (if any) must be maintained at the registered office of the foundation within the DMCC Free Zone and produced to the Registrar upon request. In the event of any conflict or inconsistency between the Charter and the By-Laws of the foundation, the Charter prevails.
Dissolution and Asset Distribution of a Foundation
A DMCC foundation can be dissolved:
- upon the expiration of the term for which it was established (if created for a specified duration);
- upon the full achievement of its objects, or where its objects become impossible to fulfil;
- in the circumstances specified in the Charter, By-Laws, or the Regulations;
- where the foundation is unable to pay its debts; or
- pursuant to a court order for dissolution (which may be applied for by the council, founder, guardian, beneficiary, or creditor).
Assets remaining after the completion of dissolution and settlement of liabilities are distributed to the beneficiaries in accordance with the Charter or By-Laws or, in the absence of specific provisions, equally among the relevant remaining beneficiaries. Where a foundation is established for a specific purpose, any remaining assets are applied towards achieving that purpose. If all beneficiaries renounce their entitlements or the foundation had no specific purpose, the remaining assets transfer to the Designee (if any) or, in the absence of a Designee, vest in the DMCC Authority.
Dispute Resolution
Under the Regulations, a “Court” is defined as the court of the Dubai International Financial Centre or such other court of competent jurisdiction as may be specified by the DMCC Authority. The Dubai International Financial Centre (DIFC) as a financial free zone has its own civil and commercial courts, which will serve as the forum for resolving certain matters involving DMCC foundations.
Pursuant to Article 32.7 of the Regulations, “any person with appropriate standing may apply to the Court to protect or enforce rights provided to them in these Regulations”. Court involvement is specifically required for:
- confirming amendments made to the Charter where the amendment procedure is not otherwise specified in the governing documents (Article 10.4);
- appointing or removing a councillor when it is impossible to do so under the established terms (Article 14.6);
- appointing a guardian in the absence of an authorised person to make such appointment (Article 16.2);
- removing a guardian for failure to perform their duties and appointing a replacement (Article 18.2);
- declaring (upon a creditor’s claim) a transfer of assets to the foundation void in the event of the founder’s bankruptcy or insolvency at the time of the transfer or intentional fraud committed against creditors (Article 24.2); and
- ordering the dissolution of the foundation upon application by the council, founder, guardian, beneficiary, or creditor (Article 26.2).
The foundation’s governing documents may also provide for the resolution of disputes via arbitration. An arbitration clause set out in the Charter or By-Laws – or, in its absence, a subsequent written submission agreement between the relevant parties – operates as a binding arbitration agreement.
How a DMCC Foundation Protects Assets from Foreign Inheritance Rules and Creditors
The Regulations protect foundations and property transfers made to them from the application of foreign laws, as well as against third-party claims against the founder.
A transfer of assets to a foundation cannot be set aside by reference to foreign (non-UAE) rules on forced heirship (mandatory inheritance shares) or any other provision of foreign law – including situations where foreign law prohibits or does not recognise the concept of a foundation. Foreign court judgments are not recognised or enforceable to the extent that they conflict with these protections.
Furthermore, a foundation or a transfer of assets to a foundation is not void, voidable, or liable to be set aside by reason of the founder’s bankruptcy, liquidation, or creditor claims, regardless of any foreign law provisions to the contrary. However, if a court establishes that the founder was insolvent at the time of the transfer or intended to defraud a creditor, it may declare the asset transfer void to the extent necessary to satisfy such creditor’s claim.
Any claims or legal proceedings seeking to set aside the registration of a foundation or a transfer of assets to a foundation cannot be brought after three years from the date of the respective act or transfer.
Foundations in DMCC and other UAE Jurisdictions
Private foundations are expected to become an essential component of the structuring solutions offered by the DMCC Free Zone. They complement operational entities designed for trading and services, as well as structures tailored for asset holding and management, such as holding companies, family offices, and Special Purpose Vehicles (SPVs).
DMCC – one of Dubai’s largest multidisciplinary free zones – is the fourth jurisdiction in the UAE to adopt a regulatory framework allowing for the creation of private foundations. Alongside DMCC, such UAE foundations can also be established in ADGM (Abu Dhabi), DIFC (Dubai), and RAK ICC (Ras Al Khaimah).
Tags: private wealth, UAE
