ADGM Foundation: A Comprehensive Guide
An ADGM Foundation is a separate legal entity established under the Abu Dhabi Global Market's legal framework that provides an alternative to traditional corporate structures and trusts for wealth management, philanthropic activities, and asset protection.
This presentation explores the key characteristics, benefits, and practical considerations for establishing and maintaining an ADGM Foundation, helping you understand if this structure aligns with your wealth management, succession planning, or philanthropic objectives.
TS
by Tariq Selah
Key Characteristics & Structure
Founder Control
Flexible governance arrangements
Legal Personality
Independent entity with perpetual succession
Limited Liability
Complete separation from personal assets
Confidentiality
Enhanced privacy protections
ADGM Foundations operate without shareholders or owners, being established with dedicated assets rather than ownership shares. The governance structure typically includes a Council (primary governing body), optional Guardian (to supervise council activities), and Beneficiaries (individuals or entities entitled to benefit), all defined in the Charter & By-laws.
Advantages of ADGM Foundations
Wealth Management & Succession
- Seamless transfer of assets across generations
- Avoidance of probate proceedings
- Preservation of family legacy and values
- Management of family businesses across borders
Asset Protection
- Ring-fencing assets from personal liabilities
- Protection from forced heirship claims
- Mitigating creditor risks
- Jurisdictional advantages
Philanthropic Activities
- Efficient structure for charitable endeavors
- Enhanced governance for initiatives
- Perpetual mission continuity
- Transparent operations with privacy
Establishing an ADGM Foundation
Preparation Phase (2-3 weeks)
Gather documentation and define foundation purpose
Application Process (1-2 weeks)
Submit Charter, By-laws, and required information
Registration Completion (1 week)
Finalize registration with the ADGM Registrar
Legal requirements include appointment of at least two Council Members, registration with the Registrar, submission of Charter and By-laws, and appointment of a Registered Agent in ADGM. The total establishment timeline typically ranges from 4-6 weeks depending on documentation readiness.
Required Documentation
Identity Documents
Certified passport copies (including signature page), UAE residence visa and Emirates ID for residents, and copies of any other passports
Residential Information
Full address details with supporting documents like utility bills or bank statements dated within 2 months
Professional Details
Occupation information, CV/Resume, and contact details including phone and email
Financial Documentation
Source of wealth and funds documentation, including bank statements, financial portfolios, or business documents
Regulatory Compliance
Annual Filing
Regular submission of required documentation to maintain good standing
Accounting Records
Maintenance of proper financial documentation
Beneficial Ownership
Keeping ownership information current and accurate
Structure Updates
Notification of changes to structure or purpose
ADGM offers a tax-neutral environment, though international tax implications, substance requirements, and compliance with global standards like CRS and FATCA must be considered. Foundations must maintain transparency with regulators while benefiting from the privacy protections offered by the structure.
Comparative Advantages
Versus Trusts
- Legal personality (unlike trusts)
- Greater founder control
- Defined governance structure
- Recognition in civil law jurisdictions
Versus Companies
- No shareholders or ownership interests
- Purpose-driven rather than profit-driven
- Perpetual existence
- Different governance requirements
Versus Other Jurisdictions
- Common law jurisdiction advantages
- ADGM's strategic location
- Robust regulatory framework
- International recognition
ADGM Foundations are best suited for high-net-worth families with cross-border interests, businesses planning long-term succession, philanthropic initiatives requiring perpetual structure, and comprehensive asset protection strategies.