Foundations Law DIFC Law No. 3 of 2018

PART 1: GENERAL........................................................................................................................................................ 1

1. Title ...................................................................................................................................................................... 1

2. Legislative authority............................................................................................................................................. 1

3. Application of the Law.......................................................................................................................................... 1

4. Scope of the Law.................................................................................................................................................. 1

5. Date of enactment................................................................................................................................................ 1

6. Commencement.................................................................................................................................................... 1

7. Interpretation........................................................................................................................................................ 1

8. Administration of this Law ................................................................................................................................... 1

9. Regulations........................................................................................................................................................... 1

PART 2: NATURE OF A DIFC FOUNDATION...................................................................................................................... 3

10. Nature of a Foundation....................................................................................................................................... 3

11. Duration of a Foundation ................................................................................................................................... 3

12. Objects and categories of Foundations.............................................................................................................. 3

13. Matters determined by DIFC law......................................................................................................................... 4

14. Limitations in Foreign Law.................................................................................................................................. 5

15. Heirship Rights................................................................................................................................................... 6

16. Foreign judgments.............................................................................................................................................. 6

PART 3: ESTABLISHMENT OF A DIFC FOUNDATION ....................................................................................................... 7

17. Creation.............................................................................................................................................................. 7

18. Constitution........................................................................................................................................................ 7

19. Charter................................................................................................................................................................ 8

20. By-laws .............................................................................................................................................................. 9

21. Default recipient............................................................................................................................................... 10

22. Council.............................................................................................................................................................. 10

23. Guardian............................................................................................................................................................ 11

24. The Registered Agent....................................................................................................................................... 12

25. Liability of Council members and others.......................................................................................................... 12

26. Reservation to Founder of powers to amend, revoke, vary or terminate ....... .................................................12

PART 4: PROPERTY OF A FOUNDATION ....................................................................................................................... 14

27. Capital endowment ............................................................... ...........................................................................14

28. Financial Resources .............................................................. ..........................................................................14

29. Qualified Recipients.......................................................................................................................................... 14

30. Depository receipts.................................................................................... ......................................................15

31. Limitation to the transferability of rights in respect of a Foundation.............................................................. 15

PART 5: ADMINISTRATION OF DIFC FOUNDATIONS ...................................................................................................... 16

32. Conduct of business .................................................................. ......................................................................16

33. Accounts and Accounting Records .......................................................... ........................................................16

PART 6: REGISTRAR .................................................................................................................................................. 17

34. Exercise of functions of the Registrar .............................................................. ...............................................17

35. Register to be kept and made available for public inspection ........................................................................ 17

36. Keeping of records by Registrar........................................................................................................................ 17

37. Registrar may change registration number of Foundation .............................. ................................................18

38. Power of the Registrar to refuse Documents............................................ .......................................................18

PART 7: JUDICIAL AND NON JUDICIAL PROCEEDINGS ................................................................................................. 19

39. Role of the Court in administration of Foundations.................................. .......................................................19

40. Power of the Court to order compliance........................................................................................................... 19

41. Power of the Court to order amendment of Charter or By-laws........................... .............................................19

42. Power of the Court to give directions............................................................................................................... 20

43. Power of the Court to protect interests under a Foundation ................................... ........................................20

44. Power of the Court to dismiss or appoint a Registered Agent.......................................................................... 20

45. Power of the Court to take action on behalf of others ........................... .........................................................21

46. General power of the Court in respect of orders ............................................................................................. 21

47. Power to set aside a transfer or disposition of property due to mistake ........... .............................................21

48. Power to set aside a transfer or disposition of property exercised by fiduciary power .................................. 22

49. Applications and orders under Articles 47 and 48 .......................................................................................... 22

50. Provisions for facilitating Foundation division or amalgamation .................................................................... 23

51. Arbitration of Foundation disputes.................................................................................................................. 23

52. Powers of the arbitral tribunal............................................................ ..............................................................23

53. Provision of information by a Foundation ............................................. ...........................................................23

PART 8: CONTINUATION AND RECOGNISED FOREIGN FOUNDATIONS.............................................................................. 25

54. Continuation of a Foreign Foundation in the DIFC .................................... .......................................................25

55. Charter of Continuance for Foreign Foundations.................................. ...........................................................25

56. Certificate of continuance for Foreign Foundations............................................... ..........................................25

57. Preservation of a Foundation............................................................................................................................ 25

58. Cancellation of registration ................................................................................. ............................................26

59. Foundation leaving the DIFC............................................................................................................................. 26

60. Conditions applicable to a Foundation leaving the DIFC ................................................................................. 26

61. Discontinuance and effect ............................................................................ ..................................................27

62. Recognised Foreign Foundations..................................................................................................................... 27

63. Continuation of company as a DIFC Foundation............................................................................................... 27

64. Charter of Continuance of a company............................................................................................................... 27

65. Certificate of continuance of a company......................................................................................................... 28

66. Preservation of a company as a Foundation .................................................. ..................................................28

PART 9: DISSOLUTION OF FOUNDATIONS .................................................................................................................... 29

67. Dissolution ........................................................................................ ...............................................................29

68. Court dissolution ............................................................................................................................................. 29

69. Distribution of property..................................................................................................................................... 29

70. Application of insolvency rules in winding up ................................................................................................. 30

71. Dissolution by the Registrar............................................................................................................................. 30

72. Publication of dissolution ................................................................................................................................ 30

PART 10: FINES AND FEES......................................................................................................................................... 31

73. Fines........................................................................................................ .........................................................31

77. Fees.............................................................................................................. ....................................................31

SCHEDULE 1 ............................................................................................................................................................ 32

SCHEDULE 2........................................................................................................ .....................................................37

SCHEDULE 3............................................................................................................................................................. 38