The UAE Family Business Law 2026: Federal Decree-Law No. 37 of 2022 — the Registry, Share Succession, and Dispute Resolution

Federal Decree-Law No. (37) of 2022 Concerning Family Businesses is the UAE’s first federal law regulating operating companies owned by a single family through voluntary registration in a family business registry, rather than through creating a separate asset-holding structure.

The law was issued 3 October 2022 and takes effect three months after publication in the Official Gazette; the exact effective date differs across sources — some cite 3 January 2023, while major international law firm Clyde & Co cites 11 January 2023.

The law expressly applies to companies across all free zones, including DIFC and ADGM, but remains subject to the applicable companies’ legislation in those zones for matters not addressed by the family business law itself.

A family company registered under this law retains its original legal form under the Commercial Companies Law (Federal Decree-Law No. 32 of 2021) — registering in the family business registry does not create a new type of legal entity but adds an additional regulatory layer to an already existing company.

⚠ The law expressly confirms that the transfer and ownership of shares under its provisions does not violate Federal Law No. 28 of 2005 on Personal Status — meaning the share succession mechanism set out in a family company’s articles can operate alongside Sharia inheritance rules rather than in conflict with them.

1. What Qualifies as a Family Business Under the Law

A family business under Federal Decree-Law No. 37 of 2022 is a company established under the applicable companies’ law, excluding public joint stock companies and general partnerships, whose majority of shares is permanently owned by members of a single family.

The law removed the shareholder-number cap that the Commercial Companies Law imposed on certain legal forms — a family business may have an unlimited number of partners provided the majority-family-ownership requirement is met.

2. The Family Business Registry: Voluntary Registration

Registration in the family business registry is voluntary (opt-in) — a company is not required to register to continue existing, but gains access to the law’s special mechanisms only upon registration.

ℹ The registry is intended to provide a centralised record of governance structures, succession mechanisms, and other information about registered family companies, and also underpins access to potential incentives and concessions granted at the Cabinet’s discretion.

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3. The Full Timeline: From Law to Support Ecosystem

Date	Event
3 October 2022	Federal Decree-Law No. (37) of 2022 Concerning Family Businesses issued (date confirmed by the official listing on uaelegislation.gov.ae)
3 or 11 January 2023	Effective date — three months after publication in the Official Gazette; the exact date differs across sources (Clyde & Co cites 11 January; several other sources cite 3 January)
May 2023	Official launch of the Dubai Centre for Family Businesses under Dubai Chambers
2023 (Resolution No. 14 of 2023)	The Tribunal for Settlement of the Disputes of Family Businesses and Family Property in the Emirate of Dubai formed
2023	Federal Law by Decree No. (31) of 2023 Concerning Trusts enacted — a separate, related instrument
2024	Law No. (21) of 2024 Amending Law No. (9) of 2020 Regulating Family Property in the Emirate of Dubai enacted — Dubai’s own emirate-level law aligned with the federal law

⚠ The discrepancy over the effective date (3 or 11 January 2023) could not be conclusively resolved during this verification pass absent direct access to the exact Official Gazette publication date — both dates are cited by authoritative sources, but 11 January 2023 is cited by major international firm Clyde & Co and is logically consistent with the three-month period running not from the issuance date but from a later Gazette publication date.

4. Key Mechanisms for Managing Shares

Mechanism	Content
Share classes	The constitutional documents may establish different share classes carrying different rights for holders
Share buy-back	The company may repurchase up to 30% of its own shares to facilitate a family member’s exit
Pre-emption right	Set by statute on any transfer, except transfers to a spouse or first-degree relative
Third-party transfer approval	Requires consent from holders of at least 75% of the share capital
Mechanism upon reaching 90%	If one family member holds 90% or more of the shares, the remaining shareholders may sell their shares at a price agreed between the parties or determined by a Committee under Article 9(2) of the law
Shareholder cap removed	The Commercial Companies Law’s shareholder-number restrictions for certain forms are lifted for family businesses

⚠ The mechanism triggered once one family member reaches 90% or more of the shares is not an automatic buy-out, but a right for the remaining shareholders to initiate a sale of their shares at an agreed price or one determined by a Committee under Article 9(2) of the law — a minority-protection mechanism, not an obligation on the majority holder to buy them out.

A repeat verification pass of the law’s primary text established: the law expressly allows for a separate document — a “Charter” — distinct from the company’s Articles of Association, with an express rule on priority in the event of a conflict between the two. The law also references a “Family Council,” whose committee may audit compliance with governance standards. Both concepts were absent from the earlier version of this article.

ℹ A separate source (the GCC Board Directors Institute) confirms: the law allows families to enter into “Family Constitutions” to regulate their affairs and the governance of both the family and the family business — meaning the law expressly contemplates two distinct governance documents, a company charter/articles and a family constitution/charter, not only the company’s own articles.

5. Dispute Resolution: Three Alternative Mechanisms

The law gives families the right to choose their own mechanism for resolving disputes related to the family company, rather than imposing a single mandatory route.

Three alternatives are available: a special Family Business Dispute Resolution Committee formed in each emirate under the law; the courts of the financial free zones (DIFC Courts, ADGM Courts); or arbitration — the choice is fixed in the family company’s articles or another applicable document.

✅ In Dubai, a dedicated Tribunal for Settlement of the Disputes of Family Businesses and Family Property has been formed under Resolution No. 14 of 2023 — a concrete institutional implementation of the committee mechanism at the emirate level.

6. How This Differs From a Family Foundation (AIFC/DIFC Structures)

A Family Foundation in AIFC or DIFC is a separate legal entity specifically created to hold a family’s assets and capital, rather than a mechanism for regulating an already existing operating company.

Parameter	Federal Decree-Law No. 37 of 2022 (Family Business)	Family Foundation (AIFC/DIFC)	Wills/Inheritance (personal succession)
Subject of regulation	An operating company owned by a family	A structure for holding family assets and capital	Distribution of personal estate after death
Is registration mandatory	Voluntary (opt-in) registration in the registry	Mandatory registration as a separate AIFC/DIFC legal entity	Not applicable — a will, not a legal entity
Applicability to an existing business	Yes — the existing operating company retains its form under the Commercial Companies Law	No — the foundation is created separately as an asset holder	No — governs succession, not operating activity
Dispute resolution mechanism	A committee in each emirate, financial free zone courts, or arbitration — the family’s choice	Set by the foundation’s constitutional documents and AIFC/DIFC jurisdiction	The court system of the relevant will jurisdiction

⚠ A family owning an operating business is not required to choose between these mechanisms — a Family Foundation in AIFC/DIFC is often used precisely to hold the shares of an operating family company registered under Federal Decree-Law No. 37 of 2022, meaning the two instruments can be used together rather than as mutually exclusive alternatives.

7. How This Differs From Wills and Personal Inheritance

A will governs the distribution of an individual’s personal estate as a whole after death, whereas Federal Decree-Law No. 37 of 2022 governs specifically the corporate mechanism for transferring shares within an already existing operating company.

ℹ The law’s express confirmation that share transfers under its rules do not violate Federal Law No. 28 of 2005 on Personal Status means a family company’s articles can provide for a share transfer mechanism distinct from the standard Sharia distribution of inheritance applicable to the founder’s other personal assets outside the company.

8. Dubai at the Emirate Level: The Link to the Federal Law

Dubai had its own emirate-level family property law — Law No. 9 of 2020 Regulating Family Property in the Emirate of Dubai — enacted two years before the federal law.

Law No. (21) of 2024 amended Law No. 9 of 2020, expressly citing Federal Law by Decree No. 37 of 2022 Concerning Family Businesses as one of its legislative bases — Dubai’s emirate-level law was aligned with the later federal instrument rather than fully replaced by it.

⚠ A company registered in Dubai’s own family business registry under the 2020 emirate law (as amended in 2024) and a company registered in the federal registry under the 2022 law are not necessarily the same mechanism — how the two registries interact for a company registered specifically in Dubai should be confirmed individually.

9. Common Mistakes

•       Assuming registration in the family business registry is mandatory for an existing family company. Registration is voluntary — a company is not required to register to continue operating in its existing form.

•       Confusing a Family Foundation in AIFC/DIFC with registration under Federal Decree-Law No. 37 of 2022 as mutually exclusive options. These are tools with different purposes that can be used together — a foundation for holding shares, the family business law for regulating the operating company itself.

•       Assuming the mechanism triggered at 90% ownership obligates the majority shareholder to buy out the remaining shares. This is a right for minority shareholders to initiate a sale, not an obligation on the majority holder to buy them out on demand.

•       Not fixing the choice of dispute resolution mechanism in the articles in advance. The law offers a choice among three alternatives, but absent an advance choice, a dispute may be resolved by default in a manner the family would not have preferred.

10. Who This Fits

•       Families with an existing operating company seeking to formalise governance and the intergenerational share transfer mechanism. The law provides a ready-made toolkit — share classes, pre-emption rights, dispute committees — without needing to design them from scratch.

•       Families wishing to structure share succession outside the standard distribution of personal estate. The law’s express confirmation of non-conflict with Federal Law 28/2005 provides legal certainty for such structuring.

11. Who This Does Not Fit

•       Families seeking a separate structure specifically for holding passive assets and capital, rather than regulating an operating company. A Family Foundation in AIFC or DIFC better fits this purpose than registration under this law.

12. When Professional Verification Is Essential

Self-assessment is worth supplementing with specialist advice when: choosing a specific dispute resolution mechanism and fixing it in the articles; assessing the interaction between federal-law registration and an emirate-level registry (particularly in Dubai); and structuring the combined use of a Family Foundation and family company registration for comprehensive family planning.

FAQ

What is Federal Decree-Law No. 37 of 2022?

The UAE’s first federal law regulating operating companies owned by a single family through voluntary registration in a family business registry.

Is registration in the family business registry mandatory?

No, registration is voluntary; the law’s special mechanisms are available only to registered companies.

How does the Family Business Law differ from a Family Foundation in AIFC/DIFC?

The law regulates an already existing operating company and preserves its original form; a Family Foundation is a separate legal entity created specifically to hold assets, not to regulate operating business.

What dispute resolution mechanisms are available under the law?

Three alternatives at the family’s choice: a special committee in each emirate, financial free zone courts (DIFC/ADGM), or arbitration.

What happens if one family member holds 90% or more of the shares?

The remaining shareholders gain the right to sell their shares at an agreed price or one determined by a Committee under Article 9(2) of the law.

Key Takeaways

•       Federal Decree-Law No. 37 of 2022 was issued 3 October 2022; the exact effective date (3 or 11 January 2023) differs across sources.

•       Registration in the family business registry is voluntary, not mandatory.

•       The law removed the shareholder cap and permits buy-back of up to 30% of shares.

•       Three dispute resolution mechanisms are available: an emirate committee, free zone courts, or arbitration.

•       The law differs from a Family Foundation (asset holding) and from wills (personal inheritance) in subject matter.

•       Dubai aligned its own 2020 emirate-level law with the federal law through a 2024 amendment.

Summary

Federal Decree-Law No. (37) of 2022 Concerning Family Businesses is the UAE’s first federal law regulating operating companies owned by a single family, through voluntary registration in a family business registry. The law was issued 3 October 2022 and takes effect three months after publication in the Official Gazette; the exact effective date is cited by different sources as either 3 or 11 January 2023. The law preserves a company’s original legal form under Federal Decree-Law No. 32 of 2021 on Commercial Companies, removes the shareholder-number cap, permits buy-back of up to 30% of shares, and establishes a pre-emption right on share transfers, except transfers to a spouse or first-degree relative. Once one family member reaches 90% or more of the shares, the remaining shareholders may sell their shares at a price agreed between the parties or determined by a Committee under Article 9(2) of the law. Three dispute resolution alternatives are available: a special committee in each emirate, financial free zone courts, or arbitration. The law expressly confirms that share transfers under its rules do not violate Federal Law 28/2005 on Personal Status. Unlike a Family Foundation in AIFC/DIFC (a separate asset-holding structure) and a will (personal inheritance), this law regulates the operating company itself, which retains its existing form.

Sources

• UAE Legislation — Federal Decree-Law No. (37) of 2022 Concerning Family Businesses, official text (uaelegislation.gov.ae)

• Al Tamimi & Company — Federal Decree-Law No. 37 of 2022 in relation to Family Companies (tamimi.com)

• GCC Board Directors Institute — Federal Decree-Law No. 37 of 2022 in relation to Family Companies, confirming the Family Constitutions concept (gccbdi.org)

• Charles Russell Speechlys — UAE Family Businesses Law Update (2022) (charlesrussellspeechlys.com)

• Clyde & Co — Synopsis of new UAE Family Business Law (clydeco.com)

• Dubai Legislation Portal — Law No. (21) of 2024 Amending Law No. (9) of 2020 Regulating Family Property in the Emirate of Dubai (dlp.dubai.gov.ae)

• Ministry of Economy & Tourism UAE — Legislations, official list of instruments (moet.gov.ae)

Disclaimer

This article is for informational purposes only and does not constitute legal, tax, or consulting advice. Application of the law to a specific family company depends on individual circumstances — consult a qualified legal adviser in the UAE before making decisions. Information is accurate as of July 2026.