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UAE’S New Family Business Law Aims To Boost The Corporate Economy

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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boost contribution family businesses countryrsquos economy attract

To boost the contribution of family businesses to the country’s economy and attract more businesses to establish operations in the Emirates, the Arab world’s second-largest economy has launched a new Family Business Law called the Federal Decree-Law No. 37 of 2022 under the Ministry of Economy.

The law came into effect on January 2023. The new law will adhere to best global practices and seek to improve the nation's corporate governance structure. It will help double family-owned businesses’ contribution to the nation's GDP to $320 billion in 2032 by preparing them for the future economy.

The average age of family-owned businesses in the GCC nations is between 40 and 60 years old. These businesses have an annual revenue of close to USD 100 billion, and 50% of their owners are five or fewer shareholders.

The Ministry of Economy announced that Thabat Venture Builder, the first initiative of its kind in the area, will support businesses through a five-month program where they will examine how ideas can be transformed into workable business projects by utilizing emerging technology.

By 2030, the program hopes to turn 200 family business projects into significant businesses with a market value greater than AED 150 billion ($40.84 billion) and AED 18 billion in annual revenue.

According to the ministry, the new law applies to all family-owned businesses that are currently operating in the nation, as well as the owners of the majority of the company's shares who choose to register it as a family company in the unified register following the law's requirements.

The law also governs the right of redemption, the evaluation of shares and their categories, the family company's acquisition of shares, the capital of family businesses, how partners dispose of their shares, and the procedure for waiving them.

For any enquiries or information, contact ask@tlr.ae or call us on +971526443004

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