A Guide to ADGM DLT Foundations

ADGM has introduced a legal structure that is likely to be of particular interest to blockchain founders, protocol teams, and Web3 projects looking for a more credible institutional footing: the DLT Foundation. It is a purpose-built legal vehicle for distributed ledger technology projects, intended for structures involving protocol governance, DAO-style decision-making, ecosystem treasury arrangements, token-based coordination, grant programmes, and other blockchain-native use cases that do not fit neatly within ordinary corporate forms. As projects mature, this becomes a practical legal issue rather than a theoretical one. Informal governance, loosely documented token mechanics, and unstructured operating arrangements are rarely sufficient for projects that need to hold assets, allocate authority, engage counterparties, and establish a clear legal framework around the protocol or broader ecosystem.

The significance of the regime lies in the way ADGM has structured it. The framework is built around the key legal and governance documents that underpin these projects in practice, including the Charter, the White Paper, and where relevant, the Tokenomics Paper. It also draws a clear boundary between DLT-related activity that sits within the Registration Authority framework and activity that falls within the FSRA regulatory perimeter. This article considers what the ADGM DLT Foundation is designed to do, how the regime operates, where its regulatory boundaries sit, and the principal legal considerations for founders assessing whether it is an appropriate structure for their project.

What is an ADGM DLT Foundation?

A DLT Foundation is a legal entity established in Abu Dhabi Global Market for specific distributed ledger technology purposes. Under the ADGM framework, it is intended to use, deploy, develop, facilitate, or support distributed ledger technology, and it may also issue tokens, provided those tokens are not regulated by the FSRA.

From a regulatory perspective, that distinction is fundamental. A DLT Foundation is constituted and supervised under the ADGM Registration Authority framework. It is not, in itself, a financial services authorisation, and it does not dispense with the need for FSRA licensing where the proposed token, activity, or operating model falls within the FSRA regulatory perimeter. The structure should therefore be understood as a commercial legal vehicle for eligible DLT-related purposes, rather than as a regulated financial services licence.

In practice, the DLT Foundation may be relevant for protocol governance structures, ecosystem treasury arrangements, grant and community initiatives, token-based coordination models, and broader blockchain development activities. Its utility lies in providing a formal legal wrapper for these arrangements within a defined regulatory framework. It should not, however, be treated as an alternative route for carrying on regulated financial services activities without the appropriate FSRA authorisation.

What can a DLT Foundation do?

A DLT Foundation may be used for a range of blockchain-related purposes within the scope of the ADGM framework. The regime contemplates activities connected with the use, deployment, development, facilitation, or support of distributed ledger technology. It may also be used to issue tokens that do not fall within the FSRA regulatory perimeter, and to support related functions such as ecosystem development, community initiatives, grant programmes, education and training, and the holding of its own assets, including virtual assets.

In practical terms, this gives blockchain projects a recognised legal vehicle through which an on-chain ecosystem may be structured and administered. Depending on the design of the project, this may include protocol treasury arrangements, DAO governance structures, ecosystem grant mechanisms, token-based coordination models, and broader technology development initiatives. Its utility lies in providing a formal legal framework for those activities, provided that the relevant token model and operating activities remain outside the scope of FSRA-regulated financial services.

What is ADGM?

Abu Dhabi Global Market, or ADGM, is an international financial centre established in Abu Dhabi with its own civil and commercial legal framework based on English common law. It operates through a number of distinct authorities, including the Registration Authority and the Financial Services Regulatory Authority. In the context of DLT Foundations, the relevant authority at the registration stage is the Registration Authority.

That distinction is important from a structuring perspective. The fact that a project involves tokens, blockchain infrastructure, or other Web3 elements does not, in itself, mean that the FSRA is the immediate regulator. A DLT Foundation is established under the Registration Authority framework, and the FSRA becomes relevant where the proposed token, activity, or operating model falls within the financial services regulatory perimeter. The analysis therefore depends on the substance of the project rather than its terminology.

What are the advantages of using an ADGM DLT Foundation?

The ADGM DLT Foundation framework offers several practical advantages for serious Web3 teams.

1. A recognised legal wrapper for blockchain-native projects

Many decentralised projects reach a point where informal community arrangements are no longer sufficient. Treasury management, governance accountability, founder transitions, grant making, service provider contracts, and protocol stewardship all require a legal entity. A DLT Foundation provides that wrapper in a form specifically built for DLT-based ecosystems.

2. Governance flexibility

The regime is designed to accommodate customised governance arrangements. The Charter is the central constitutional document and can embed bodies, reserved matters, delegated matters, tokenholder voting procedures, amendment mechanics, issuance and vesting rules, and other DAO-style governance concepts. Importantly, the regime does not contemplate by-laws in the traditional sense. The Charter is intended to do the heavy lifting.

3. A clear perimeter split

ADGM has not positioned the DLT Foundation as an all-purpose crypto vehicle. It is explicitly limited to DLT purposes and token issuance outside the FSRA perimeter. That may sound restrictive, but in practice it gives founders more clarity. If a token is regulated, or if the business model involves regulated virtual asset or digital asset activity, that issue is meant to be identified early rather than ignored.

4. Structured transparency requirements

The registration process is designed around documents that actually matter in a blockchain project: the Charter, the White Paper, the Tokenomics Paper if applicable, and the DLT Framework if developed. That means the regulator is not simply reviewing a corporate form. It is reviewing the legal, governance, and disclosure architecture of the project.

5. Credibility with counterparties and ecosystem participants

A properly structured ADGM DLT Foundation can provide significantly more credibility than an informal offshore wrapper with vague governance terms. For counterparties, institutional partners, ecosystem contributors, and serious investors, the existence of a clear legal framework around governance, beneficial ownership disclosures, audit expectations, and filing discipline is often valuable.

Is a DLT Foundation the same as an FSRA licence?

No. This is one of the most important distinctions in the regime.

A DLT Foundation is registered and supervised by the ADGM Registration Authority. It is not authorised by the FSRA unless the project separately undertakes activities that fall within the FSRA regulatory perimeter. The registration application itself requires a declaration confirming that no Financial Services Permission is required for the intended activities. The framework also makes clear that DLT Foundations cannot participate in activities regulated by the FSRA or requiring FSRA permission.

So if the token is in substance a regulated token, or if the operating model includes regulated activities such as exchange operation, broker-dealer activity, custody, or similar financial services activity, the project cannot simply rely on the DLT Foundation registration alone.

Can a DLT Foundation issue tokens?

Yes, but only within defined limits.

The regime allows a DLT Foundation to issue tokens, provided those tokens are not regulated by the FSRA. Where the foundation intends to issue tokens, the registration package must include not only a White Paper but also a Tokenomics Paper, and the Charter must include detailed token governance provisions dealing with issuance, transfer, vesting, voting mechanics, token economics, and related matters.

If the foundation does not intend to issue tokens, it can still register, but the founders will generally need to provide a statement confirming that there is no present or foreseeable intention to issue tokens and that the Registration Authority will be notified if that position changes.

What kind of governance structure does a DLT Foundation require?

The governance structure of a DLT Foundation is centred on its Charter. Under the ADGM regime, the Charter is the principal constitutional document and is required to set out the foundation’s organisational and governance structure in detail. This includes matters such as the composition of governance bodies, appointment and removal mechanics, reserved and delegated matters, decision-making thresholds and quorum requirements, founder resignation provisions, beneficiary and tokenholder rights, audit procedures, amendment mechanics, liability provisions, and dissolution-related arrangements. Where the foundation intends to issue tokens, the Charter must also address tokenholder voting rights, issuance and transfer mechanics, vesting schedules, token economics, transfer restrictions, and the intended use of tokens.

A DLT Foundation is also required to have a Council comprising at least two and no more than sixteen councillors. The Council is responsible for carrying out the objects of the foundation, managing and administering its assets, and ensuring compliance by the foundation and its governance structure with the Charter and applicable obligations. Councillors are subject to express statutory duties, including duties to act in accordance with the Charter, to exercise powers only for proper purposes, to act honestly, in good faith and in the best interests of the foundation, to exercise independent judgment, to exercise reasonable care, skill and diligence, and to manage conflicts appropriately.

The regime also contemplates the appointment of a guardian where the Charter so requires, including following founder resignation. A guardian may be a beneficiary, tokenholder, or legal person, but may not be a founder, councillor, sole beneficiary, or sole tokenholder. The guardian is subject to duties broadly similar to those of councillors, including duties of good faith, independent judgment, care, skill and diligence, and conflict management.

Where tokens are issued, tokenholders may be given governance rights under the Charter. However, the Regulations expressly require that veto rights remain reserved to the DLT Foundation Council. Accordingly, tokenholder voting rights operate within the framework set by the Charter and remain subject to Council-level confirmation where required under the Regulations.

Does a DLT Foundation need a Company Service Provider?

As a general rule, yes. Under the ADGM DLT Foundation regime, a foundation is required to maintain a licensed Company Service Provider in ADGM unless it can satisfy the Registration Authority that it has substantial resources in the UAE and adequate governance policies and procedures such that an exemption is appropriate. In practice, many applicants use a Company Service Provider, particularly at the registration stage and during the early operational life of the foundation.

What are the minimum capital or endowment requirements?

The DLT Foundations Regulations prescribe a minimum initial asset value of USD 50,000. In practice, the Registration Authority expects this to be supported by appropriate evidence, such as a recent bank statement showing the relevant amount.

There is, however, an important point of detail in the source materials. The consolidated Regulations provide that the initial assets must be contributed in fiat currency or in stablecoins recognised by the FSRA, and not in any other form. Earlier Registration Authority checklist materials referred only to fiat currency. As a matter of interpretation, the consolidated Regulations should be treated as controlling. That said, applicants should ensure that both the proposed contribution method and the supporting evidence are aligned with the Registration Authority’s prevailing filing expectations at the time of application.

What documents are required to register a DLT Foundation?

The registration of a DLT Foundation is supported by a detailed documentary submission to the ADGM Registration Authority. The focus is not simply on incorporation formalities, but on whether the proposed structure, governance model, disclosure materials, and supporting documentation are consistent with the DLT Foundations regime.

The principal application documents generally include:

1. A name reservation for the DLT Foundation name.
2. The Charter signed by the founders.
3. A declaration of compliance, including confirmation that no FSRA permission is required for the intended activities.
4. A White Paper.
5. A Tokenomics Paper, if tokens are to be issued, or alternatively a founder statement confirming no present or foreseeable token issuance plans.
6. A hyperlink to the DLT Framework, if one has been developed.
7. The relevant commercial licence application.
8. Relevant disclosure information relating to founders, councillors, beneficiaries, beneficial owners, guardian if any, and auditors.
9. A statement of initial beneficial ownership and control.
10. Evidence of the initial asset amount.

Depending on the case, the Registration Authority may also require supporting evidence such as a legal opinion, independent White Paper or Tokenomics compliance reports, and a security audit or security and compliance report for the DLT Framework.

What is the process to set up an ADGM DLT Foundation?

The process generally involves the following steps:

1. Confirm that the proposed project fits within the DLT Purposes and does not require an FSRA permission.
2. Assess the token properly to determine whether it falls inside or outside the FSRA perimeter.
3. Decide whether the foundation will issue tokens at registration or remain non-token-issuing initially.
4. Engage a Company Service Provider unless there is a realistic basis to seek exemption.
5. Reserve the proposed name, which must end with “DLT Foundation”.
6. Prepare the Charter and map out the full governance architecture.
7. Prepare the White Paper and, if applicable, the Tokenomics Paper.
8. Finalise the DLT Framework if the project has developed one.
9. Assemble the evidence package, including beneficial ownership disclosures, KYC documents, initial asset evidence, and any assurance materials such as legal opinions or independent reports.
10. Submit the registration application and the commercial licence application to the Registration Authority.
11. Respond to Registration Authority queries and further evidence requests.
12. Once satisfied, the Registration Authority issues the certificate of registration and the foundation becomes a separate legal entity.

How long does the registration process take?

ADGM’s published materials indicate that the registration of a DLT Foundation can generally be completed within one month. That timeframe should, however, be read as the Registration Authority’s expected processing period for a complete application, rather than as the total time required to structure and prepare the application itself.

In practice, the more substantial part of the process usually takes place before submission. This includes preparing the Charter, settling the governance framework, finalising the White Paper and, where relevant, the Tokenomics Paper, preparing the DLT Framework where one has been developed, and obtaining any supporting legal opinions, independent compliance reports, or security assurance materials that may be required. The Regulations also permit the Registrar to request further evidence in relation to the Charter, White Paper, Tokenomics Paper, and DLT Framework. Where the Registrar is not satisfied after all requested documents have been submitted, the applicant must be notified of the reasons within one month.

What are the costs associated with applying for and maintaining a DLT Foundation?

The DLT Foundation fee schedule includes both initial and recurring costs.

The Registration Authority fees include:

1. Name Reservation Fee
   USD 200
2. Registration Application Fee
   USD 1,500
3. Commercial Licence Issuance Fee
   USD 8,000
4. Business Activity Fee
   USD 5,000
5. Annual Commercial Licence Renewal Fee
   USD 8,000
6. Annual Business Activity Renewal Fee
   USD 5,000
7. Confirmation Statement Fee
   USD 100 annually
8. Notifications and Change Filings
   Typically USD 100 per change item
9. Continuation to or from ADGM
   USD 7,500
10. Reinstatement
    USD 1,500

The fee schedule also contemplates additional data protection fees under the relevant ADGM rules, which are separate from the DLT Foundation fee table.

What are the ongoing compliance obligations?

A DLT Foundation is subject to continuing compliance, filing, and disclosure obligations following registration, and these should be built into the foundation’s governance and operational framework from the outset.

The principal ongoing obligations include the payment of annual renewal fees, the filing of a confirmation statement within one month of each registration anniversary, and the filing of annual accounts together with the auditor’s report within the applicable period. The regime also requires the annual accounts to be published on the foundation’s website, which is an important aspect of the disclosure framework and should be considered at the structuring stage.

Where applicable, the foundation may also be required to conduct security audits and file the relevant materials with the Registrar within prescribed timeframes following completion. In addition, certain changes, including changes relating to councillors and Company Service Providers, are subject to notification requirements within relatively short filing windows. The foundation must also maintain its beneficial ownership disclosures and ensure ongoing compliance with applicable legal obligations relating to anti-money laundering, sanctions, consumer protection, data protection, and cybersecurity.

A point that should be considered carefully in practice is the extent of the disclosure framework. Annual accounts filed with the Registrar are subject to public disclosure, and the separate requirement to publish those accounts on the foundation’s own website means that financial transparency forms part of the ongoing compliance position. For projects with particular sensitivities around treasury visibility, governance transparency, or broader financial disclosure, this is a matter that is generally better addressed at the structuring stage rather than after registration.

What are the common pitfalls?

A number of issues arise repeatedly where the DLT Foundation regime is approached as a relatively straightforward registration exercise rather than as a legal and governance framework requiring careful structuring.

1. Treating a regulated token or activity as falling outside the FSRA perimeter

This is often the most significant issue. If the token, the rights attaching to it, or the underlying operating model fall within the FSRA regulatory perimeter, the registration of a DLT Foundation will not remove the need for the appropriate FSRA authorisation. The analysis must be grounded in the substance of the arrangement rather than the terminology used to describe it.

2. Underestimating the importance of the Charter

The Charter is central to the legal architecture of a DLT Foundation and is expected to perform a substantially broader function than a conventional constitutional document. Deficiencies in the drafting of governance arrangements, tokenholder rights, reserved matters, decision-making mechanics, or operational authority are a common source of regulatory questions and may create structural weaknesses in the foundation itself.

3. Treating the DLT Framework as a high-level or promotional document

Where a DLT Framework has been developed, it is expected to reflect the project’s actual governance and technical model, including oversight arrangements, testing, monitoring, risk controls, and security architecture. A document that is drafted at too high a level, or that serves primarily a presentational purpose, is unlikely to meet that function effectively.

4. Overlooking beneficial ownership and control issues

Projects involving token-based governance often underestimate the extent to which voting rights, governance influence, or other control mechanisms may give rise to beneficial ownership and control considerations. This requires careful analysis at the structuring stage, particularly where governance rights are embedded in token design or held across a broader ecosystem.

5. Underestimating the ongoing compliance burden

The regime carries continuing filing, notification, audit, and disclosure obligations, including annual and event-driven filings within prescribed deadlines. These obligations should not be treated as administrative formalities. Failure to meet them may give rise to regulatory issues, including, in more serious cases, strike-off risk.

Is an ADGM DLT Foundation right for every Web3 project?

Not necessarily. The ADGM DLT Foundation is a useful structure for certain categories of Web3 projects, particularly where there is a genuine need for a formal legal wrapper around protocol governance, ecosystem treasury arrangements, grant programmes, decentralised community coordination, or token issuance that falls outside the FSRA regulatory perimeter. In those cases, it can provide a credible legal and governance framework for projects that require greater structural formality.

It is not, however, a universal solution for every blockchain or token-based business model. Where the substance of the project involves regulated financial services activities, including custody, exchange operation, brokerage, or other activities falling within the FSRA perimeter, the DLT Foundation should not be treated as an alternative to the appropriate regulatory authorisation. Equally, even where the structure is legally available, it may not be the right fit for founders who are not prepared for the level of governance, disclosure, documentation, audit discipline, and ongoing filing obligations that the regime entails. The relevant question is therefore not simply whether the structure is available, but whether it is appropriate to the project’s legal, operational, and regulatory profile.

How Can 10 Leaves help you?

10 Leaves advises founders, protocol teams, and Web3 businesses on the structuring, registration, and legal implementation of ADGM DLT Foundations. Our support is aligned to the ADGM Registration Authority framework and focuses on the legal, governance, and regulatory analysis required to establish a compliant foundation for blockchain-based projects. The regime is document-intensive and requires close alignment between the proposed objects of the foundation, its governance model, its disclosure materials, and the applicable regulatory perimeter.

Our services include assistance in:

1. Reviewing the proposed business model, token design, and governance arrangements, and advising on whether the project is appropriately suited to the ADGM DLT Foundation framework. This includes assessing whether the proposed activities remain within the Registration Authority framework or may cross into the FSRA regulatory perimeter. ADGM guidance expressly states that DLT Foundations may undertake DLT-related activities and issue tokens, but may not carry on FSRA-regulated activities or activities requiring FSRA permission.

2. Advising on the legal and constitutional architecture of the foundation, including founder arrangements, council composition, governance rights, reserved matters, tokenholder mechanics, treasury oversight, and the broader operating model to be reflected in the Charter. The Registration Authority checklist makes clear that the Charter is a core registration document and may require supporting compliance evidence, including a legal opinion acceptable to the Registrar.

3. Preparing and reviewing the principal registration documents, including the Charter, White Paper, Tokenomics Paper where applicable, founder statements where no token issuance is contemplated, and associated supporting materials for submission. The Registration Authority checklist also contemplates evidence that the White Paper and Tokenomics Paper comply with the DLT Foundations Regulations.

4. Supporting the preparation and review of the DLT Framework, where developed, together with related documentation around security and compliance expectations. The checklist specifically refers to the submission of a hyperlink to the published DLT Framework and evidence of compliance, which may be supported by a report following a security audit issued in favour of the Registrar.

5. Advising on registration readiness and related legal workstreams, including CSP appointment requirements, founder and appointee documentation, beneficial ownership and control disclosures, auditor appointment requirements, and evidence of the minimum initial asset. ADGM’s checklist requires these items as part of the standard registration package for DLT Foundations.

6. Supporting the application process through submission and regulatory engagement, including coordinating responses to Registration Authority queries and helping ensure that the registration package is legally robust, internally consistent, and fit for review.

For more information on ADGM DLT Foundations, or to discuss whether the structure is appropriate for your project, Contact us here.

About the Authors

1. Rohit Ghai is the Founder of 10 Leaves and Legability. Over two decades, he has advised founders, family offices, and institutional clients on structuring regulated businesses across the UAE — spanning DIFC and ADGM authorisations, SPVs, Foundations, and compliance frameworks. He works directly on mandates, not at arm's length. Connect with Rohit on LinkedIn.

2. Andal Seshadri is Legal Counsel at 10 Leaves and Legability and advises founders, financial institutions, virtual asset businesses, and emerging technology companies on regulatory, commercial, and compliance matters across the UAE. Her practice spans DIFC, ADGM, CMA, CBUAE and VARA frameworks, with particular focus on digital assets, fintech, tokenisation, payments, data protection, funds documentation and cross-border structuring. Andal holds a B.A., LL.B. (Hons.) in Law and is an Advocate enrolled with the Bar Council of India. Connect with Andal on LinkedIn.