PROTECT ASSETS, PLAN SUCCESSION,
& PRESERVE LEGACY WITH A DIFC FOUNDATION

A DIFC Foundation offers powerful advantages for wealth management, asset protection, and achieving your financial or philanthropic goals.

Scenario

Consider a wealthy entrepreneur, Mr. Ahmed, who wishes to secure his family’s financial future and support charitable causes. Based in Dubai, he establishes a DIFC Foundation, “Ahmed Family Foundation,” to manage his diverse asset portfolio.

Structure Implementation

1. Establishment of DIFC Foundation:
   • Mr. Ahmed sets up the Ahmed Family Foundation under DIFC Common Law, appointing a council comprising family members and a trusted financial advisor to oversee operations.
   • He transfers assets worth $50 million, including cash, stocks, and real estate holdings, into the Foundation.
2. Creation of Prescribed Companies (PCs):
   • The Foundation creates three PCs:
     • “Ahmed Real Estate PC” to manage a portfolio of commercial properties in Dubai.
     • “Ahmed Investments PC” to handle stock market investments.
     • “Ahmed Charity PC” to support educational initiatives.
   • Each PC is tailored to a specific sector, optimizing management and compliance.
3. Income Generation and Distribution:
   • Ahmed Real Estate PC generates $2 million annually from property rentals, which flows back to the Foundation.
   • Ahmed Investments PC earns $1.5 million from stock dividends.
   • The Foundation distributes $1 million to beneficiaries (e.g., Mr. Ahmed’s children and grandchildren) and allocates $500,000 to charitable causes via Ahmed Charity PC.
4. Long-Term Planning:
   • As Mr. Ahmed ages, he updates the beneficiary list to include a new grandchild, a process facilitated by the flexible governance of DIFC Common Law.

Benefits of the DIFC Foundation Structure

1. Asset Protection: The Foundation shields Mr. Ahmed’s $50 million asset base from personal creditors or legal disputes, ensuring long-term security for his family.
2. Tax Efficiency: With DIFC’s 0% corporate tax rate, the Foundation retains the full $3.5 million annual income, maximizing funds available for beneficiaries and charitable activities.
3. Sector-Wise Diversification: Creating multiple PCs allows targeted management of real estate, investments, and charity, reducing risk and enhancing returns across sectors.
4. Succession Planning: The structure provides a clear mechanism for distributing income to beneficiaries, ensuring Mr. Ahmed’s wealth supports his family across generations with minimal legal hurdles.
5. Charitable Impact: The Ahmed Charity PC enables structured philanthropy, such as funding schools in underserved areas, aligning with Mr. Ahmed’s legacy goals while offering tax and legal benefits.

Conclusion

The DIFC Foundation structure empowered Mr. Ahmed to protect his wealth, diversify investments, and plan for his family’s future and charitable endeavors. This case study demonstrates how the structure’s flexibility under Common Law and tax advantages make it an effective tool for high-net-worth individuals seeking robust estate and investment management.