Federal Decree-Law No. 37 of 2022 · UAE Federal
Lets a company majority-owned by one family register as a family business with the Ministry of Economy, adopt a family charter on ownership, valuation and profit distribution, issue voting Category A and non-voting Category B shares, buy back up to 30% of its shares in defined cases, and resolve disputes through a reconciliation board or a dedicated committee.
Federal Decree-Law No. 37 of 2022 is the Family Businesses Law. Issued on 3 October 2022, it came into force three months after the day following its Official Gazette publication (Article 28); the portal records 10 January 2023. It creates an optional regime for a company majority-owned by one family, entered by registration with the Ministry of Economy, with tools the Commercial Companies Law does not offer: a family charter, voting and non-voting share classes, pre-emption and buy-back rights, and a dedicated dispute route.
Article 1 defines a family business as a company under the Companies Law in which most of the shares are held by members of a single family and which is registered as such; family includes relatives by descent and marriage. Article 3 applies the law to any company form under the Companies Law, including the one-person company, and to free-zone companies where it does not conflict with zone rules, but excludes joint-stock companies and partnerships. Article 4 creates the Ministry's unified register.
Article 6 allows a family charter covering ownership rules, values, share valuation, profit distribution, qualification of family members who work in the business and dispute handling; the articles of association prevail over it on conflict. Article 7 removes the limit on the number of partners and allows unequal profit rights. Article 12 creates Category A shares with profit and voting rights and Category B shares with profit rights only, and allows other classes under rules set by the Minister. Article 13 requires a portion of annual profits to be distributed in proportion to shares unless the articles provide otherwise.
Article 8 governs transfers: shares must first be offered to the other family partners, except transfers to a spouse or first-degree relative; sale to an outsider needs approval of partners holding three-quarters of the capital unless the articles say otherwise; if an outsider acquires shares the family partners may buy them back within 60 days, then the company within 30 days. Article 9 lets a partner holding 90% buy out non-family partners, and one holding 95% of voting shares the remaining family partners, at an agreed or committee-set price. Article 11 allows the company to buy back up to 30% of its shares, only on a capital reduction or to redeem a bankrupt or insolvent partner's shares.
Articles 14 to 17 cover management: one or more directors, at least one a natural person, appointed by partners holding 51% unless the articles differ, with duties of care, non-competition, annual reporting and fair treatment. Article 19 routes disputes first to a reconciliation board with three months to settle, then to an emirate Family Business Dispute Resolution Committee (Article 20), which decides within three months extendable once, with appeal to court; arbitration may be chosen instead. Article 23 ends family-business status when outsiders hold a majority of voting shares. Status: in force.
Companies incorporated under the Commercial Companies Law in any form other than joint-stock companies and partnerships, including one-person companies, and free-zone companies where zone rules allow, in which a single family holds most of the shares and which register with the Ministry of Economy; their family and non-family partners, directors and boards; and the emirate dispute-resolution committees.
English official text in 28 articles. Open the full text or jump to a provision:
| Article 1 | A family business is a Companies Law company in which most shares are owned by members of a single family and which is registered as such; family means relatives by descent and marriage, and the Cabinet defines a single family. |
| Article 3 | Applies to any company form under the Companies Law, including the one-person company, and to free-zone companies where consistent with zone rules; joint-stock companies and partnerships are excluded. |
| Article 6 | The optional family charter may cover ownership rules, values, share valuation, profit distribution, qualification of family members working in the business and dispute handling; the articles of association prevail on conflict. |
| Article 8 | Shares must be offered to family partners first, save transfers to a spouse or first-degree relative; sale to an outsider needs three-quarters of the capital; family partners may buy back an outsider's shares within 60 days and the company within 30 days. |
| Article 9 | A partner holding 90% of the shares may buy out non-family partners, and one holding 95% of voting shares the remaining family partners, at an agreed price or one fixed by the committee on expert valuation. |
| Article 11 | The company may buy back up to 30% of its shares on a capital reduction or to redeem a bankrupt or insolvent partner's shares that no family partner will buy, by majority at the general assembly; repurchased shares carry no vote. |
| Article 12 | Category A shares carry profit and voting rights; Category B shares carry profit rights only; the articles may provide for conversion and for other classes under rules set by the Minister. |
| Article 14 | Management by one or more directors, at least one a natural person, appointed by partners holding 51% unless the articles differ; a board may be formed and the chairman may not also be the director. |
| Article 19 | Disputes go first to a reconciliation board with three months to settle, then to the emirate Family Business Dispute Resolution Committee, which decides within three months extendable once, subject to court appeal; arbitration or a financial free-zone court may be chosen instead. |
| Article 23 | Family-business status ends when outsiders hold a majority of voting shares, with removal from the register and a buy-out offer for Category B shares; a partner's death, interdiction or bankruptcy does not end it unless the articles say so. |
| Article 28 | In force three months after the day following publication in the Official Gazette. |
None specific. Article 16 lets a court order a director's dismissal or compensation for breach of duty, without prejudice to penalties under other UAE laws.
We use this regime when a family-owned client wants succession settled inside the operating company rather than only above it. The charter under Article 6 lets the family write down who may work in the business, how shares are valued and how profits are split, and the Category A and B split under Article 12 lets the founder keep voting control while children or a spouse hold income rights. We pair the registered family business with a holding foundation where the family wants the shares held off the personal estate, and we draft the charter and the articles together so that the articles, which prevail, do not undo the charter. The pre-emption, 60-day buy-back and 90% and 95% squeeze-out rules in Articles 8 and 9 are explained to every partner before signing, because they bind heirs. The committee route under Article 19 is faster than litigation, and we provide for it, or for arbitration, in the articles.
| Cites | Civil Transactions Law 1985 (repealed) · Federal Arbitration Law · Financial Free Zones Law |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
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