Family Business Law in the UAE
Family businesses play a significant role in the UAE economy, contributing to sustainable investment, economic growth, and business continuity across generations. To support these businesses, the UAE introduced Federal Decree-Law No. (37) of 2022 concerning Family Businesses, providing a dedicated legal framework that regulates ownership, governance, succession, and dispute resolution.
At FHS Law Firm, our Family Business Legal Services help business owners establish legally compliant family businesses, protect family assets, develop governance structures, and resolve family business disputes while ensuring long-term business continuity.
Our experienced Family Business Lawyers provide strategic legal advice tailored to the unique needs of family-owned businesses operating throughout the UAE.
What Are Family Businesses in UAE Law?
Definition of a Family Business
A family business is a company established by members of a single family who own the majority of its shares and capital, exceeding fifty percent, allowing ownership and management to pass smoothly from one generation to another.
To regulate family-owned businesses, the United Arab Emirates issued Federal Decree-Law No. (37) of 2022 concerning Family Businesses, establishing clear legal requirements for companies seeking family business status.
Legal Requirements for Family Businesses
Ownership Percentage
Under UAE law, more than 50% of the company's shares or ownership interests must belong to members of the same family up to the fourth degree of kinship.
Registration in the Unified Register
The company must be registered in the Unified Register of Family Businesses maintained by the UAE Ministry of Economy to benefit from the protections and advantages provided under the Family Business Law.
Eligible Legal Structure
A family business may operate as any company type recognized under the Commercial Companies Law, such as a Limited Liability Company (LLC) or Private Joint Stock Company, excluding Public Joint Stock Companies, General Partnerships, and Simple Limited Partnerships.
Main Features of Federal Decree-Law No. (37) of 2022
Business Continuity
The law ensures that family businesses continue operating even after the death of a shareholder by regulating succession and share transfers between generations without interrupting business operations.
Family Charter
Family members may establish a Family Charter that defines governance rules, management procedures, succession planning, family values, and internal dispute resolution mechanisms before conflicts reach the courts.
Share Transfers
The law grants existing family members priority rights to purchase the shares of any family member wishing to exit the company before those shares are offered to third parties.
External Investors
Non-family investors may become shareholders provided their combined ownership does not exceed 49% of the company's capital while preserving the company's family business status.
Different Classes of Shares
The legislation permits the issuance of different categories of shares, allowing ownership rights, voting rights, and profit distribution rights to be allocated according to the family's governance strategy.
If you are planning to establish a family business or require legal advice regarding your ownership rights, our experienced legal team is ready to assist you.
Registration of Family Businesses in the UAE
Unified Register of Family Businesses
To benefit from the legal protections available under the UAE Family Business Law, eligible companies must be registered in the Unified Register of Family Businesses maintained by the Ministry of Economy.
Legal Documentation
Registration requires preparing the necessary legal documentation, verifying ownership structure, and ensuring compliance with the requirements established under Federal Decree-Law No. (37) of 2022.
Professional Legal Guidance
Our experienced legal team assists clients throughout the registration process, ensuring compliance with all legal requirements while protecting the long-term interests of the family business.
Family Business Dispute Resolution
Preventing Family Business Conflicts
Family businesses often face unique legal and commercial challenges arising from ownership succession, management responsibilities, profit distribution, and strategic decision-making. Establishing clear governance rules significantly reduces future disputes.
Family Council
The Family Business Law allows families to establish a Family Council responsible for resolving internal matters, promoting communication between family members, and supporting long-term business continuity.
Dispute Resolution Committee
Where internal discussions fail to resolve disputes, family business conflicts may be referred to the Family Business Dispute Resolution Committee before commencing court proceedings.
Alternative Dispute Resolution
The legislation encourages mediation and arbitration as efficient methods of resolving disputes while preserving family relationships and protecting business operations.
Family Business Arbitration
Efficient Resolution of Commercial Disputes
Arbitration provides family businesses with a confidential and efficient method of resolving disputes without lengthy court proceedings. Arbitration awards are legally enforceable under UAE law.
Protecting Business Continuity
Resolving disputes through arbitration helps preserve commercial relationships, maintain confidentiality, and minimize disruption to ongoing business activities.
Family Business Legal Services at FHS Law Firm
Comprehensive Legal Support
Our Family Business Legal Services provide strategic legal guidance throughout every stage of the family business lifecycle.
Our services include:
- Family business registration.
- Corporate restructuring.
- Family Charter drafting.
- Governance advisory.
- Succession planning.
- Shareholder agreements.
- Dispute resolution.
- Commercial arbitration.
- Regulatory compliance.
Our experienced Family Business Lawyers help families preserve wealth, protect investments, and ensure business continuity for future generations.
Why Choose FHS Law Firm?
Experienced Family Business Lawyers
Family-owned businesses require legal advisors who understand both commercial law and the unique dynamics of family ownership. Our lawyers provide practical legal solutions that balance business objectives with family relationships.
Protecting Family Wealth
We assist families in safeguarding business assets, preserving ownership structures, planning succession, and reducing legal risks through carefully structured governance frameworks.
Long-Term Business Continuity
Our legal strategies help businesses transition successfully between generations while maintaining operational stability and protecting shareholder interests.
Frequently Asked Questions
Q: What is considered a family business under UAE law?
A: A family business is generally a company in which members of the same family own more than 50% of the company's shares or ownership interests and is registered in accordance with the Family Business Law.
Q: Can non-family members own shares in a family business?
A: Yes. Non-family investors may own shares provided their combined ownership does not exceed the legal limit established under the Family Business Law.
Q: What is a Family Charter?
A: A Family Charter is an internal governance document that establishes rules for ownership, management, succession planning, dispute resolution, and family participation in the business.
Q: Why is succession planning important?
A: Succession planning ensures the smooth transfer of ownership and management between generations while protecting the long-term stability and continuity of the family business.
Q: How can FHS Law Firm assist family businesses?
A: Our lawyers assist with family business registration, governance, succession planning, dispute resolution, arbitration, corporate restructuring, regulatory compliance, and legal advisory services tailored to family-owned businesses.
Need Family Business Legal Advice?
Whether you are establishing a new family business, preparing a Family Charter, planning succession, or resolving ownership disputes, our experienced legal team is ready to assist you.
To speak with one of our experienced Family Business Lawyers, schedule your consultation today.
Explore our complete range of Family Business Legal Services and other legal practice areas to learn how we can help protect your family's business and legacy.
FHS Law Firm & Legal Consultancy
Al Reem Tower, Office No. 401
Electra Street, Abu Dhabi, United Arab Emirates
WhatsApp: +971 56 664 6374
