Federal Decree-Law No. 37 of 2022: what the family businesses law changed

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

The regime is opt-in rather than automatic. Article 3(1) applies the law to a family company existing when its provisions came into force, or established afterwards, where the holders of most of its shares decide to register it in the Register as a family company, and where it is established in one of the company forms in the Commercial Companies Law, including the one-person company, or under free zone legislation. Article 3(2) places the public shareholding company and the general partnership outside the scope.

Registration does not create a new type of company. Article 26(2) states that the family company is not a new form to be added to the forms of commercial company in the Commercial Companies Law, and Article 26(1) subjects family companies to that law and other applicable legislation for every matter for which the Decree-Law contains no special provision. The family company therefore sits on an existing corporate form and adjusts particular rules, in one case expressly as an exception to that law.

Article 4 establishes the unified Register at the Ministry, in coordination with the competent authority, which may keep its own register of family companies. The Ministry issues a document recording the registration and any change in the company's data. The Ministry launched the Unified Family Businesses Registry on 26 December 2023, alongside four implementing decisions covering registration of the family charter, a family company's purchase of its own shares under Article 11, controls on the issuance of multiple classes of shares, and registration itself. It announced the registration of a first batch of companies on 22 May 2025.

The adjustments to ordinary company rules include the following.

• Article 7(1) allows a family company any number of partners, as an exception to the Commercial Companies Law or the legislation applicable in the free zones.
• Article 7(2) provides that capital consists of shares giving their owners equal or differentiated rights in the company's profits, as agreed in the memorandum of association.
• Article 12 permits two classes of shares: class A carrying profits and a vote in the general assembly, and class B carrying profits without a vote. The memorandum may set conditions for conversion in either direction, and may stipulate other classes differing in value, voting power, profits and priority rights, with each partner's liability in proportion to the rights of that class.
• Article 11 permits the company to purchase not more than 30 per cent of its shares, either to reduce capital, or to purchase or redeem some or all of the shares of a partner who wants to sell, or of a bankrupt or insolvent partner, where there is no purchaser or redeemer among the partners.
• Article 8 sets a default pre-emption sequence. A partner disposing of a share offers it to the remaining family partners, with an exception permitting assignment to a relative up to the first degree or, in the words of the official English text, to the partner's wife. A disposal to a non-family member requires approval of partners holding at least three quarters of the capital, unless the memorandum stipulates another percentage.

Article 27 repeals every provision contravening or contradicting the Decree-Law, and Article 26(1) leaves the Commercial Companies Law to govern only what the Decree-Law does not. A description of what a UAE family-owned company may do with its own shares, or with differentiated voting rights, that does not proceed from this Decree-Law does not describe the position of a registered family company.

Two matters are left to instruments issued under the law. The meaning of a single family is reserved by the definitions in Article 1 to a resolution of the Council of Ministers issued on the recommendation of the Minister. Under Article 25(1) the Council of Ministers may issue decisions on benefits and incentives granted to registered family companies, and under Article 25(2) the competent authority in an Emirate may grant others.

On disputes, Article 19 allows the memorandum or the charter to provide for a board of partners, family members or third parties to attempt reconciliation, and otherwise refers disputes to the committee. Article 20 provides for a Family Company Disputes Resolution Committee in each Emirate, established by decision of the Minister of Justice or the head of the local judicial authority, presided over by a judge assisted by two experts specialised in the legal, financial and family company management fields.

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.