Where a foundation meets the UAE Family Businesses Law

Federal Decree-Law No. 37 of 2022 concerning Family Companies (Businesses) was issued on 3 October 2022 and came into force three months after the day following its publication in the Official Gazette (Article 28).

Its application is opt-in, arising where the holders of most of a company's shares decide to register it in the Register as a family company and the company takes a form in the Companies Law, including the one-person company, or under free zone legislation (Article 3(1)). Public shareholding companies and general partnerships are excluded (Article 3(2)). It reaches free zone companies only so far as it does not conflict with that zone's laws on their organisation and registration (Article 3(3)), and companies within an Emirate only where that Emirate has no local legislation on them, covering only what it leaves open (Article 3(4)).

It makes available:

• A family charter, which the Ministry's English text calls the Family Chart. It may contain rules for ownership, the family's objectives and values, share valuation mechanisms, methods of profit distribution, the education and qualification of family members working in the company, and the handling of family disputes (Article 6(1)). Where it and the memorandum of association conflict, the memorandum applies (Article 6(3)).
• Restrictions on transfer. A partner wishing to dispose of a share must first offer it to the remaining family partners, though it may be assigned to the partner's wife or a relative up to the first degree unless the charter or memorandum says otherwise (Article 8(1)). Disposal to a non-family member needs approval of partners holding at least three quarters of capital, unless the memorandum sets another figure, and the shares may be re-designated as the non-voting class B (Articles 8(2) and 12).
• A share buy-back. The company may purchase not more than 30 per cent of its shares, on a reduction of capital or to buy or redeem the shares of a partner wishing to sell, or of a bankrupt or insolvent partner, where no other partner will. Partners holding a majority of the shares represented at the general assembly must approve unless the memorandum sets another figure, and the purchased shares carry no vote while held (Article 11).
• An option for the other partners to sell at high shareholdings. Where a single partner comes to hold not less than 90 per cent of the family company's shares, that partner must notify the partners from outside the family of a wish to buy their shares, and those partners may sell at an agreed price or one the committee determines. Article 9(3) applies the same duty at a separate threshold of not less than 95 per cent of the voting shares, running to the remaining family partners. On the wording of the Arabic text, which prevails over both official English renderings, the only obligation Article 9 imposes is that duty to notify: it sets no period within which the other partners must answer and no consequence where they do not sell. Published commentary is divided, and a government-partnered guidebook describes Article 9 as a compulsory sale rather than an option; no Committee decision, regulation or judgment applying Article 9 is recorded here.
• A dispute route. The memorandum or charter may provide for a board to attempt conciliation (Article 19(1)). Where there is none, it fails within three months, or the parties agree not to use it, and unless the memorandum provides otherwise, the Family Company Disputes Resolution Committee considers the dispute, with appeal to the competent court (Articles 19 and 20). Disputes of companies registered in the financial free zones follow those zones' laws (Article 21).

Article 24(1) provides that organising ownership and transfer of shares or assets under the decree-law or free zone laws, by sale, donation or usufruct, is not contrary to the Personal Status Law if made during the disposing partner's life. Article 24(2) allows an heir to remain a partner in proportion to the inherited share, or dispose of it subject to Article 8.

The buy-back, class structure, pre-emption regime and dispute committee are provisions addressed to the family company, its memorandum of association and its registration in the Register. Both foundation regimes separately provide that a foundation's assets may comprise any property (DIFC Article 27(2); ADGM section 15(1)).

In Dubai a local instrument also operates. Law No. 9 of 2020 Regulating Family Property, as amended by Law No. 21 of 2024, governs the Family Property Contract between members of a single family in business together or holding a common interest, over property they co-own in undivided shares. It must be attested by a Notary Public and registered with the Department of Economy and Tourism, and disputes go to a dedicated Tribunal (Articles 6 and 23).

Sources, all retrieved 11 August 2026:

• Federal Decree-Law No. 37 of 2022, Family Companies, Ministry of Economy English: https://www.moet.gov.ae/documents/20121/0/family+company+english+version+examined+and+correcetd.pdf/5639a956-fe15-6de2-a04e-c8f8ecb6c2bf?t=1674115232919
• Federal Decree-Law No. 37 of 2022, Family Companies, Ministry of Economy Arabic, which governs and states the Article 9 thresholds as ninety and ninety-five per cent: https://www.moet.gov.ae/ar/companies-legislations
• Dubai Law No. 21 of 2024 amending Law No. 9 of 2020, Family Property: https://dlp.dubai.gov.ae/Legislation%20Reference/2024/Law%20No.%20%2821%29%20of%202024%20Amending%20Law%20No.%20%289%29%20of%202020%20Regulating%20Family%20of%20Dubai.pdf
• DIFC Foundations Law, consolidated March 2022: https://edge.sitecorecloud.io/dubaiintern0078-difcexperie96c5-production-3253/media/project/difcexperiences/difc/difcwebsite/documents/laws--regulations/foundations_law_difc_law_no_3_of_2018_consolidated.pdf
• ADGM Foundations Regulations, consolidated January 2025: https://en.adgm.thomsonreuters.com/sites/default/files/net_file_store/ADGM1547_19329_VER01012025.pdf

This content is written with law firms and is educational only. A family should take its own advice on its own facts. Nothing here has been verified or endorsed by the programme as suitable for any family or any structure.