Anyone who set up a foundation or a trust in Abu Dhabi to hold family wealth chose, at the point of formation, the law governing the instrument. That choice also determined which transparency rules would apply. That reasoning no longer holds: the test has shifted to a different fact, and a structure built on the old logic will only reveal the mismatch if someone goes back and reads it.
What happened
Abu Dhabi Global Market (ADGM), the Abu Dhabi financial centre that operates under its own common law corporate regime, has published a set of amendments to its commercial legislation in 2026. Three of them matter. Bearer shares — instruments that vest ownership in whoever physically holds the certificate, with no owner named on any register — are now expressly prohibited. For trusts, the scope of regulatory obligations is determined by the location of the trustee, meaning the person or firm administering the assets, rather than by the governing law chosen for the trust. And foundations and trusts may no longer be established for purposes falling within the definition of a non-profit organisation adopted by ADGM for anti-money-laundering (AML) purposes.
What changes in practice
The bearer share prohibition closes an instrument that has already disappeared in most jurisdictions and that international bodies have flagged for years as a vehicle for opacity: anyone still holding them must convert to registered shares. The change of test for trusts is subtler and carries more weight. Previously, choosing the governing law also fixed the perimeter of identification and ultimate beneficial owner (UBO) reporting obligations. That perimeter now follows the trustee: if the trustee sits in ADGM, the ADGM obligations apply, whatever law governs the trust. Trustees themselves also carry more explicit duties to identify, record and report the person who settled the assets and the persons who benefit from them.
Who it applies to
Anyone holding an ADGM foundation or trust — typically used to hold shareholdings, real estate or financial assets and to organise succession. It also reaches structures set up with a professional trustee based in the UAE and a governing law drawn from another jurisdiction, which is a frequent combination. The bearer share prohibition, by contrast, applies to any ADGM company.
The exposure
The exposure is not an immediate penalty; it is the gap between how the structure was designed and how it is now read by those supervising it. A structure built to answer to one framework but in fact subject to the obligations of another produces incomplete ultimate beneficial owner filings — which is precisely the point banks and regulators are examining. It is also worth noting that assets held through an ADGM structure do not stop being relevant for tax purposes in the countries where the beneficiaries are resident: beneficial ownership transparency makes that link easier to read than it was.
What to do now
Holders of an ADGM trust or foundation should check three points with whoever drafted the instrument: where the trustee is located, which reporting obligations follow from that location, and whether the beneficial ownership filing on record is current against the new test. Holders of an ADGM company should confirm that no bearer shares remain in issue. Anyone using a foundation for purposes that might fall within the non-profit definition should take advice before renewal, because that route is now closed.
Sources
- https://www.adgm.com/media/announcements/adgm-registration-authority-publishes-amendments-to-the-commercial-legislation
- https://www.adgm.com/
Published 1 September 2026 on the basis of public sources and official United Arab Emirates instruments. This is not legal or tax advice. Verify your position with a qualified professional before acting.