The Silent Shift: How One Family Empire Sparked the Most Powerful Wealth Structure...

As global wealth faces rising scrutiny, litigation risks and tax pressures, smart Entrepreneurs, High Net Worth individuals and Families are seeking smarter ways to protect and structure their assets regardless of whether they are located in the UAE or overseas.

One solution gaining unprecedented traction as to a clear alternative to Trusts is the Dubai International Finance Centre (DIFC) Registered Foundation. Registered Foundations grew a whopping 54% in 2024 which reflects the demand for robust asset protection. A Foundation is a powerful legal vehicle offering robust asset protection, privacy, and international recognition. Furthermore, protecting clients from probate or litigation matters as per the Majid Al Futtaim study case (see below).

This article breaks down why sophisticated Entrepreneurs and HNWI's are turning to DIFC foundations as a cornerstone of modern wealth and succession planning.

The best part... A DIFC Registered Foundation can be created remotely within 3 to 6 weeks without you suffering from a logistical migraine!

Lessons from Majid Al Futtaim (MAF): Why Registered Foundations Exist Today...

When Majid Al Futtaim, the founder of one of the Middle East’s largest conglomerates, passed away in 2021, questions over control and succession of his empire highlighted a structural gap in the UAE’s wealth management framework.

Despite his vast holdings, there was no clear mechanism in place to separate family interests from corporate governance while ensuring continuity and protection of the assets. The complexities of succession, inheritance disputes and cross-border holdings exposed the limitations of traditional structures like trusts and offshore entities in the regional context.

This high profile case became a wake-up call for policymakers and private wealth advisors: the UAE needed a modern, internationally recognised vehicle to handle legacy planning, asset protection and family governance for HNW / UHNW Individuals and Families.

As a result, the DIFC and ADGM introduced Registered Foundations, designed to:

• Provide a neutral, perpetual legal entity for holding and protecting assets.

• Resolve family business continuity issues through strong governance frameworks.

• Shield wealth from disputes, claims, and forced inheritance laws.

• Align the UAE with global wealth hubs like Singapore, Jersey and Liechtenstein.

In short, the Majid Al Futtaim succession complexities were the catalyst that accelerated the UAE’s push to formalise foundations as a secure and internationally respected structure for entrepreneurs and wealthy families.

The Stealth Resolution in Wealth Protection

Here is why traditional trusts are outdated. They depend on someone else holding assets 'for' you. A trust requires someone to hold assets for someone else. A foundation becomes the legal owner of assets indefinitely. This distinction creates powerful advantages for wealth protection.

The structure shields global assets and operating companies, regardless of location. London property, New York investments, Swiss accounts, artwork etc. all protected under the legal registered foundation framework.

A DIFC Foundation operates differently: it becomes the legal owner of assets indefinitely with the Founder having complete control.

That simple distinction unlocks enormous advantages for entrepreneurs and HNWI's who are serious about protecting what they’ve built.

• Asset Protection: Properly structured DIFC Foundations create an impenetrable shield around global wealth. Creditors, lawsuits, even divorce claims.

  
  

• Privacy by Default: Unlike other jurisdictions, DIFC Foundations require no public registry. Ownership stays confidential while still being recognised by global banks and institutions.

  
  

• Tax Efficiency: No income tax | No capital gains tax | No inheritance tax | 0.125% property transfer tax:- This makes international tax planning dramatically more efficient.

  
  

• Global Recognition: From property, investments, artwork, intangible assets, operating companies onshore or overseas, assets under a DIFC Foundation enjoy legitimacy across financial centres worldwide.

  
  

It is no surprise that DIFC foundations grew 51% in 2024, a surge driven by the ongoing exodus of sophisticated wealth holders.

Foundations v Trusts

Registered Foundation:

• Stringent legal protection based on English Common Law

• Regulated by (DIFC Foundations Law No.3 of 2018)

• A foundation can contract with external parties

• It can hold intangible and tangible assets

• Create Special Purpose Vehicles (SPV’s) holding shares in Operating Companies

• Create Multiple layer protection

• The foundation holds the legal and beneficial title to the assets

Trust:

• A trust is not a distinct legal entity

• The legal rights and obligations are with the trustees (rather than the trust itself) and the trustee in effect contracts in its own name on the trust’s behalf

• Legal ownership of the trust fund is with the trustees

• Beneficial ownership of the trust fund is with the beneficiaries

Real World Application Demonstrates Value

Example: Consider a tech entrepreneur with £10 million in London property, $5 million in U.S. investments and operating businesses with a certain valuation. Traditional structures offer limited defence against probate, litigation, family disputes and ongoing succession planning. One legal claim can unravel years of wealth building.

With a DIFC Foundation, those assets are untouchable. The Founder maintains full control through a management council, appointment of Guardians, chartered byelaws and special purpose vehicles (SPV's) guiding investment and succession decisions, while enjoying privacy and tax efficiency. In other words: protection without loss of control.

But here’s the kicker: A Registered Foundation is not for the masses. They require expert, strategic setup with an initial setup cost and yearly maintenance fees. Such costs are for those who see it as being a 'drop in the ocean' based on the enormous saving overall as per the above reasons for creating a foundation.

The cost of entry is not for everyone, hence they are so powerful. Scarcity breeds exclusivity, and exclusivity drives demand...

The Bottom Line

For entrepreneurs and HNWI's who think a few steps ahead and understand that wealth without protection is wealth at risk, the DIFC Registered Foundation is no longer optional, yet a necessary structure.

The new wave of smart wealth is already migrating. The question is, will you move now, or will you be left competing for structures and advantages that may no longer be within reach?

DIFC Foundations are not just for the wealthy... they are for the wise.

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