Dubai International Financial Center Foundations Law, Lexis ®Middle East Law, May 2018

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DIFC

Overview

The DIFC Foundations Law DIFC Law No. 3/2018 (the Foundations Law) has taken the best of the different Common and Civil Law legislations on foundations and blended it in one unique law. Amongst the innovations in the Foundations Law are: The DIFC Courts have the power to set aside transactions for mistake, along the lines of the jurisprudence which developed in England following the decision in HastingsBassvIRC [1974] 2 All ER 193 (HastingsBass) prior to its limitation by the decisions of the Supreme Court in Pitt v Holt [2013] UKSC 26 and Futter v HM Revenue and Customs [2013] UKSC 26 (Foundations Law articles 5052). The capacity to compulsorily settle intraFoundation disputes by arbitration (Foundations Law articles 5455). Redomiciliation of foundations (Foundations Law, articles 5761), available also in the ADGM (ADGM Foundations Regulations 2017 articles 3236) but not in the QFC. Recognition of foreign foundations (Foundations Law, article 65). Conversion of DIFC private companies to DIFC Foundations (Foundations Law, article 66) which is available to any company whose domestic law permits its domiciliation to the DIFC as a preliminary step since the DIFC Companies Law DIFC Law No. 2/2009 permits that (DIFC Companies Law, articles 144150.) Provisions for depositary certificates within DIFC Foundations are modelled on the Netherlands STAK (being the abbreviation in Dutch of “Stichting Administratiekantoor”) practice.

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co-written by David Russell AM RFD QC and Christophe Jolk, Lexis ®Middle East Law, May 2018

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