Empowering Family Businesses in the UAE: The New Family Business Law

Created On: October 10, 2023
Newsletter, U.A.E.

Modified On: January 12, 2026

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Family businesses have long been the driving force behind the thriving economy in the UAE. It significantly contributes to the growth and prosperity of the country. These businesses could operate without a comprehensive legal framework for governing their operations until recently. However, with the introduction of UAE Federal Decree Law No.37 in 2022, circumstances are different for family businesses.

Also known as the New Family Business Law, this is a groundbreaking legislation that marks a crucial moment for family-owned enterprises. It offers a wide range of provisions to strengthen family businesses in the country.

Facilitating Succession Planning

One of the primary objectives of the New Family Business Law is to support succession planning. Although this is a crucial aspect, family-owned companies tend to overlook the priority. Do you know that less than 15% of family businesses manage to survive into a third generation?

To address this issue, the new law facilitates smoother transitions of businesses between two subsequent generations. As a result, you can expect a more seamless ownership transfer for family businesses and control. It ensures that your family business can continue in the years to come. Forward-thinking enterprises are seeking professional assistance for succession planning for Dubai family offices from established companies.

Exception to Statutory Pre-emption Rules

The New Family Business Law introduces an exception to certain statutory pre-emption rules. This empowers family businesses with greater flexibility to manage their ownership structures. Due to this adjustment, they can create different share classes and allocate the same among shareholders.

Family businesses can also adapt to changing circumstances due to this newfound versatility which caters to their evolving needs. In the process, they can cruise on the path to long-term sustainability.

Effective Mechanisms to Resolve Disputes

The introduction of robust dispute resolution mechanisms is one of the benchmarks of the New Family Business Law. In recent times, public disputes have shed light on the challenges that family-owned companies encounter. This often results in adverse consequences for the concerned business.

To address this issue, the law has established “’Family Business Dispute Resolution Committees”. While the effectiveness of these committees is yet to be seen, this marks a significant step toward preventing and resolving disputes. Historically, these disputes have jeopardised the stability of family businesses.

The New Family Business Law applies across all Emirates and free zones within the UAE. Therefore, family businesses across the country would have access to a consistent legal framework. This promotes fairness in their operations.

For professional assistance in personal holding company formation and management and succession planning, reach out to a professional expert at the IMC Group. We continue to be one of the pioneers in assisting family businesses in the UAE.

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Empowering Family Businesses in the UAE: The New Family Business Law

Facilitating Succession Planning

Exception to Statutory Pre-emption Rules

Effective Mechanisms to Resolve Disputes

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