Global philanthropic giving is a major economic force, with cross-border philanthropy totalling USD70 billion in 2023.* And not only is the scale of private capital dedicated to charitable purposes around the world growing, but philanthropists are also moving away from ad hoc donations towards structured, strategic giving through family offices and foundations that are more focused on qualifiable impacts.
The Dubai International Financial Centre (DIFC) Foundation provides an effective vehicle to do this. Operating under the DIFC’s internationally recognised common law framework, DIFC Foundations can be established to manage donations, charitable trusts and broader non-profit activities, while maintaining full control of the distribution of funds.
Legal form and purpose
Under the DIFC Foundation Law No. 3 of 2018, a DIFC Foundation is a legal person in its own right. It can hold assets, enter contracts and operate independently of its Founder. Control is maintained through the Foundation’s charter and by-laws, which define the purpose and decision-making framework. The Founder can retain certain powers or delegate them to a Council, which functions as the main supervisory body.
DIFC Foundations can be set up for charitable, non-charitable or mixed purposes. Charitable foundations must state a specific public benefit and appoint a Guardian to oversee compliance. This gives structure to private philanthropy, especially when donations are intended to support causes across multiple jurisdictions. Non-charitable Foundations, which are often used for wealth management, can also still support charitable activity as part of a broader mandate.
Unlike contractual arrangements or offshore equivalents, the DIFC Foundation creates a ring-fenced legal structure with statutory safeguards. It functions without shareholders or beneficiaries in the traditional sense, which keeps focus on the stated purpose rather than individual entitlements.
Who can use a DIFC Foundation and why?
These structures are typically used by high-net-worth individuals and families that have assets or commitments in multiple jurisdictions. Some use them to formalise long-standing charitable efforts, others to create new vehicles with specific cultural, religious or personal aims.
The by-laws, which are typically used to direct how funds are disbursed, which causes are eligible and what conditions apply, can remain private. Founders can retain oversight or pass decisions to the Council, while still defining broad goals through the charter.
Foundations can also be used by family offices as part of succession planning, particularly where giving is intended to continue across generations. Their appeal generally lies in the flexibility to set rules without being tied to one national regime. In some cases, they also help avoid exposure or scrutiny that would follow direct gifts or public structures elsewhere.
Federal vs DIFC charitable structures
Under the UAE Federal Law No. (5) of 2018 on Waqf, charities and endowments must register through the General Authority of Islamic Affairs and Endowments or the local Waqf authority. This involves religious board oversight, public reporting, and restrictions on how assets may be managed or used. In cases where philanthropic activities span multiple jurisdictions, this structure may not be appropriate.
The DIFC takes a different approach. Foundations are formed under its own legal framework, based on common law principles and administered by the DIFC Registrar. There is no requirement for religious supervision, and the Founder sets the terms through private documentation. Control stays with the Council or Founder, subject to the charter and by-laws.
With its focus on legal personality, asset protection and purpose-based governance, the DIFC model can therefore be used effectively for private giving, cross-border grants and long-term endowments that fall outside the traditional charitable categories under UAE Federal law.
Formation process
Setting up a foundation in the DIFC involves submitting a charter and by-laws to the Registrar. These documents name the Founder, set out the purpose and define how the foundation will be run. At a minimum, there must be one council member. If the purpose is charitable, a guardian must be appointed to supervise its activities. A protector can also be named, though this is optional.
Once filed, the Registrar issues a certificate of incorporation. Most applications are processed within a few working days, though timelines can vary depending on structure and the approvals required. Documents do not require notarisation unless so requested by a third party.
Some founders prepare additional internal governance rules or set limits on disbursements through the by-laws. Again, these do not need to be filed publicly. Foundations must keep proper records and meet ongoing filing requirements with the DIFC Authority.
Why the DIFC?
Structures established in the DIFC benefit from legal personality, a clear statutory regime and confidential internal governance. Foundations operate under common law, with English used as the working language, and enjoy recognition in many jurisdictions that do not typically recognise trusts. Documents are not made public unless the Founder chooses to disclose them.
For international families, this can simplify succession planning across borders or help structure giving across regions with different reporting rules. Control, purpose and confidentiality can be separated and formalised, while the Foundation’s assets are held independently from individual beneficiaries or executors.
The result is a structure that holds under pressure. It serves the Founder’s intent but does so through a legal form that remains consistent regardless of jurisdiction, beneficiary status or political change. These are crucial factors when putting long-term plans into practice.
How can Sovereign PPG help?
Whether you are establishing a charitable foundation, structuring long-term giving or managing cross-border philanthropic commitments, Sovereign PPG can support you with formation, compliance and regulatory engagement within the DIFC. Our team works directly with private clients, legal advisers and institutions to deliver clear, practical solutions that meet both regulatory and strategic priorities.
To speak with Sovereign PPG in Dubai, call +971 (0)4 456 1761 or, for Abu Dhabi, call +971 (0)2 448 5120.
You can also email to sovppg@SovereignGroup.com or use the contact form below.
*According to the Global Philanthropy Indices compiled by IU Indianapolis.
