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DIFC trust law: key features and rules
DIFC trust law is the Trust Law, DIFC Law No. 4 of 2018, which governs a trust that chooses DIFC law in Dubai; ADGM in Abu Dhabi has its own framework. Below are the governing law, who may act as trustee, and the features and limits, each with its source. Take them to your lawyer before the deed is drafted.
Reviewed by a senior trust administrator, updated
The legal frame at a glance
What the law provides, with the source number for each item.
Key facts
- Perpetuity period
- A DIFC trust may continue indefinitely; no perpetuity rule applies[1]
- Foreign law rules
- In DIFC, foreign heirship rights are not recognised for trusts (Art. 15)[1]
- Reserved settlor powers
- In DIFC, a settlor may reserve powers to revoke or vary a trust (Art. 84)[1]
- Registration
- The Registrar's Register of DIFC foundations is open to inspection (Art. 35)[2]
Numbers in brackets point to the Sources list at the end of this page.
Swipe sideways to see the whole diagram.
- SettlorSets up the structure and transfers assets into it
- states the purpose and transfers assetsTrusteeHolds the assets and manages them under the trust deed
- applies assets toTrust purposeThe stated purpose the trust serves, in place of beneficiaries
- Enforcer can enforce the purposeEnforcerCan hold the trustee to the terms of the trust
- Trustee holds legal titleTrust assetsThe property held in the structure
Roles and notes
| Part of the structure | What it does |
|---|---|
| Settlor | Sets up the structure and transfers assets into it |
| Trustee | Holds the assets and manages them under the trust deed |
| Enforcer | Can hold the trustee to the terms of the trust |
| Trust purpose | The stated purpose the trust serves, in place of beneficiaries |
| Trust assets | The property held in the structure |
- A DIFC purpose trust holds assets for a purpose instead of named beneficiaries; the deed appoints an enforcer (Trust Law, Art. 39).
- The deed may appoint a protector, who holds only the powers the deed gives.
- In DIFC, a settlor can reserve powers such as varying the trust (Trust Law, Art. 84).
- The trustee named in the deed holds title and keeps the records.
- A letter of wishes sits beside the deed and guides, but does not bind, the trustee.
The governing law
UAE trust law is not one statute: DIFC and ADGM each have their own framework, and they are not copies of each other.
DIFC (Dubai). The Trust Law governs a DIFC trust (source: Trust Law). The Foundations Law governs a DIFC foundation.
A settlor may declare DIFC law as the governing law whether or not they live in the DIFC (Art. 11 of that Law).
ADGM (Abu Dhabi). ADGM has its own framework.
ADGM foundations are governed by its Foundations Regulations 2017 (source: ADGM, Foundations Regulations 2017). This page states the DIFC trust rules only; your lawyer confirms the ADGM trust rules.
The tax and reporting page explains what the trustee files.
Who may act as trustee
The deed names the trustee; families often choose a company for continuity. A professional trustee is a firm that acts for clients and keeps the records the deed requires.
We work with a local partner where the work is done in the UAE; your engagement letter sets out its role.
For a foundation, the council takes the place of a trustee. A DIFC foundation may, but need not, have a Registered Agent (source: Foundations Law, Art. 24).
Your lawyer advises on the choice of trustee for your deed.
Features the law allows
The DIFC Trust Law allows features that families comparing places ask about. The first four come from the Trust Law, read in the consolidated March 2024 text.
- No fixed end date. A DIFC trust may continue indefinitely, and no perpetuity rule applies (source: Trust Law).
- Reserved powers. A settlor may reserve powers such as revoking or varying the trust without invalidating it (Art. 84).
- Foreign heirship. In DIFC, foreign heirship rights are not recognised for trusts (Art. 15). Ask your lawyer how a court elsewhere sees it.
- Purpose trusts. A non-charitable purpose trust is valid if the deed appoints an enforcer (Art. 39).
- Foundations. A DIFC foundation is a body corporate separate from its founder (source: Foundations Law, Art. 10).
Each feature is a tool, not a result. Whether it works for your family depends on your residence, your assets and the law of the places where they sit.
Limits and requirements
In DIFC, the limits a family meets first are about records and disclosure.
The DIFC Registrar keeps a Register of foundations that is open to public inspection (source: Foundations Law, Art. 35). Plan for that if privacy matters to you.
What the trustee files is in the reporting guide, and the cost guide shows who charges for each task.
Sources and review dates
The DIFC statutes used here are the consolidated March 2024 texts, accessed 2026-11-05.
Your lawyer confirms how these points apply to your deed.
The overview of the UAE puts them in context, the set-up guide shows where each check happens, and the common questions page answers the practical ones.
Frequently asked questions
Which law governs a trust in the UAE?
It depends on the centre the deed names. A DIFC trust is governed by the 2018 Trust Law, and a settlor may choose DIFC law without living in the DIFC. The ADGM framework is separate, and your lawyer confirms the trust rules for an ADGM deed. The deed should name its governing law expressly.
Who may act as trustee in the UAE?
The deed names the trustee. Families weigh continuity, record keeping and the time the role takes: an individual may move or die, while a company keeps the records across generations. Our local partner in the UAE does the work there; your engagement letter sets out its role.
Can a trust in the UAE have a protector?
Yes, if the deed creates the role. A protector holds only the powers the deed gives, so the drafting decides how much oversight the role carries. Under the Trust Law of DIFC, the settlor may also reserve powers to revoke or vary the trust without invalidating it (Art. 84). Your lawyer advises on how the two roles fit together.
Sources
- Trust Law 2018, Dubai International Financial Centre (consolidated March 2024), read 2026-11-05.
- Foundations Law 2018, Dubai International Financial Centre (consolidated March 2024), read 2026-11-05.
- ADGM: Foundations Regulations 2017, read 2026-11-05.