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Synopsis of new UAE Family Business Law
Legal Development 11 January 2023 11 January 2023
A new UAE Federal Decree Law No.37 of 2022 on Family Businesses (the "Law") was issued in October 2022 and comes into force on 11 January 2023.
The Law aims to:
- establish a comprehensive legal framework for the ownership and governance of family businesses in the UAE, including by facilitating transfers between generations;
- support the continuity of family businesses and enhance their role in the private sector;
- provide mechanisms for the resolution of family disputes; and
- enhance the contribution of family businesses to the economy and competitiveness of the UAE.
Some of the highlights of the new Law include the following:
- a flexible, opt-in regime, based on voluntary registration;
- open to UAE businesses majority-owned by a single family (this concept is to be further defined by Cabinet Resolution);
- special benefits and incentives may be granted at federal and emirate level;
- different share classes are permitted – this is a ground-breaking development for onshore LLCs; and
- bespoke dispute resolution processes specific for family businesses.
We have prepared an in-depth special briefing, designed to support and inform our clients about the new Law, and its potential impact.