The four layers of family business law that apply in Dubai

A rule encountered in connection with a family business in Dubai belongs to a layer, and reading it correctly depends on knowing which, because the layers have express precedence rules.

The federal layer is Federal Decree-Law No. 37 of 2022 concerning Family Companies (Businesses), with the unified Register kept at the Ministry under Article 4 and the four implementing decisions announced in December 2023 on the family charter, a family company's purchase of its own shares, classes of shares and registration. Registration is a decision of the holders of most of the shares under Article 3(1), and Article 3(2) excludes the public shareholding company and the general partnership.

The federal law itself states how it gives way.

• Article 3(3) applies it to family companies established in free zones only to the extent that it does not conflict with the applicable laws, regulations and legislation of the free zone concerned in relation to their organisation, incorporation or registration. Article 1 defines Free Zone as a financial or non-financial free zone established in the State, so this covers both kinds.
• Article 3(4) provides that where an Emirate has local legislation regulating these companies, application of the federal law is limited to aspects the local law does not regulate or stipulate. The same article allows an Emirate to authorise companies registered within its competence to enter the federal Register.
• Article 21 subjects settlement of disputes of family companies registered in the financial free zones to the legislation applicable in those zones.

Those provisions leave four layers in which a rule can sit: the federal law, the law of the Emirate, free zone legislation, and the financial free zones, which have their own registries, entity forms and courts.

The Dubai layer is Law No. 9 of 2020 Regulating Family Property in the Emirate of Dubai, as amended by Law No. 21 of 2024, which superseded Articles 2, 6, 17 and 23 of the original law and came into force on the day it was issued, 4 September 2024. In the amended Article 2, Family means the spouse and the blood relatives and in-laws up to the fourth degree, and Family Property covers movable and immovable property, copyright and related rights, industrial property rights, trademarks, and other rights subject of the contract. A Family Property Contract is an agreement concluded by family members who are engaged together in business, or have common interests, to regulate family property co-owned by them in undivided shares and determine how it is managed.

The amended Article 6 sets seven conditions of validity: all parties are members of a single family; all are engaged together in business or have a common interest; each partner's share is determined in the contract; the parties own or may dispose of the property; a Notary Public attests the contract under Law No. 4 of 2013; it is registered in the designated register maintained by the Department of Economy and Tourism; and it does not conflict with public order.

Forums differ by layer as well. The amended Article 23 gives the Tribunal for Settlement of the Disputes of Family Businesses and Family Property in the Emirate of Dubai, formed under Resolution No. 14 of 2023, all disputes arising from Family Property Contracts, subject to Article 3 of that Resolution. A Dubai Government announcement of 24 October 2023 described the body as formed within Dubai Courts, chaired by a judge of a rank not lower than an appeal judge, with two members experienced in the legal, financial and family business management fields nominated by the Director General of Dubai Chambers. It stated that where the family ownership contract provides for a council, a dispute is referred to that council for reconciliation, and that the body does not consider disputes before they have been submitted to the Centre for Amicable Settlement of Disputes and amicable settlement has failed.

Alongside the layers sits a support body rather than a regulator. Decree No. 45 of 2022 established the Dubai Centre for Family Businesses. A Dubai Government announcement of 2 February 2023 placed it within the Dubai Chambers organisational structure and described its work as technical and administrative support, generational succession and sector strategy. On its inauguration on 16 May 2023 the work described included leadership development, next generation training, governance sessions, adviser certification, policy recommendations and templates, and research. It issued governance guidelines on 11 July 2023.

Two instruments stay distinct. A Family Property Contract registered with the Department of Economy and Tourism regulates co-owned family property between family members. Registration in the federal Register confers family company status, and the adjusted company rules, on a company.

This content is educational and is written with law firms. It is not advice; the programme verifies or endorses no structure, and the family should take its own advice.