Trusts, Foundations and Private Trust Companies in the DIFC 

As part of our collaboration with the DIFC Family Wealth Centre, Equiom authored a thought leadership article examining the role of Trusts, Foundations and Private Trust Companies (PTCs) in the DIFC. This synopsis highlights the key themes from that piece, which were also discussed in a joint webinar, focusing on how these structures can support long-term wealth planning. 

Trusts: flexibility and confidentiality 

A DIFC trust is not a separate legal entity but a legal relationship where a settlor transfers assets to a trustee to hold for beneficiaries. Trusts offer a high degree of flexibility and discretion, allowing tailored succession and asset protection strategies. They are private (no public registration is required) and benefit from the UAE’s favourable tax environment, including no estate or inheritance tax. Applications include preserving family wealth across generations, facilitating estate transfers and shielding assets from claims, though careful structuring is needed to ensure compliance with international tax rules. 

Foundations: structure and continuity 

Unlike trusts, DIFC foundations have their own legal personality and are therefore self-owned. They involve a founder, council, guardian and beneficiaries, and are governed by a charter and bylaws. Foundations can exist indefinitely, making them attractive for long-term wealth planning, philanthropy and family business continuity. Their clear governance model provides both structure and flexibility, while enabling centralised wealth management. As incorporated entities, foundations can open bank accounts, enter contracts and even conduct limited commercial activities, subject to their charter. 

Private Trust Companies: control and customisation 

A PTC is a DIFC-incorporated company established by a family to act as trustee of one or more trusts. It gives families greater influence over trust administration, allowing direct participation in governance and decision-making. PTCs combine the privacy and asset protection benefits of trusts with the governance of a corporate entity. They are particularly suited to sophisticated wealth structuring, including the management of family businesses, real estate and luxury assets, while providing continuity across generations. 

Key distinctions 

• Legal form: trusts are legal relationships, foundations and PTCs are incorporated entities with legal personality.
• Control: trusts vest authority in trustees, foundations in their council, and PTCs in directors/shareholders (typically family members).
• Tax: DIFC trusts, foundations and PTCs all benefit from a 0% tax rate on income and gains within the DIFC and are exempt from VAT, but cross-border tax rules must always be considered.
• Governance: trusts are highly flexible but rely on trustee discretion; foundations offer structured governance; PTCs allow bespoke family-driven oversight.
• Applications: trusts excel at confidential asset protection and estate planning; foundations suit philanthropy and business continuity; PTCs provide tailored family control and succession planning.

Continuing the conversation 

There is no one-size-fits-all solution. The choice between a trust, foundation or PTC depends on the family’s appetite for control, confidentiality, governance and succession goals. The joint discussion with the DIFC Family Wealth Centre highlighted how these structures are applied in practice, underscoring the importance of tailored advice. 

If you are considering how best to structure your assets in the DIFC, our team can assist you in understanding the available alternatives and provide information to help you make informed decisions aligned with your long-term objectives. 

This material is intended solely for Professional Clients and Market Counterparties and no other parties should act upon it. 

The information provided in this document does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this document are for general informational purposes only. Furthermore, information in this document may not constitute the most up-to-date information. DIFC, DIFC Family Wealth Centre, Equiom, their partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article/guide or for any decision based on it. Users are encouraged to seek professional advice before acting on any information contained in this article. 

Equiom Fiduciary Services (Middle East) Limited is regulated by the DFSA.  For information on the regulatory status of Equiom companies, please visit https://www.equiomgroup.com/regulatory.