UAE Introduces Family Business Law To Boost Economy, Attract Investments

A new family business law will take effect early next year in the UAE as part of the country's efforts to create a roadmap for the growth of family ventures in the region.

Ministry of Economy Undersecretary Abdullah Bin Ahmed Al Saleh said during a media briefing on Monday that the legislation would help regulate the ownership and management of family businesses in the UAE.

He noted that the development of the legislation is a significant milestone for the UAE, as no other law of its kind has ever been created in the country.

"The family business sector is a major economic growth driver in most countries and they play a fundamental role in establishing new businesses, attracting investments and creating job opportunities in various sectors," he explained.

Al Saleh said the family business law, which will further strengthen the UAE's position as a premier destination for family businesses around the world, will not only ensure the growth and prosperity of such ventures in the region, but will also diversify their activities and aid their longevity throughout many generations.

He added that the initiative proves how much the UAE values the family business sector and acknowledges its contribution to the country's economy.

"The impact of this law on the economic development will be huge since 90% of private companies in the country are family businesses," Al Saleh said.

Family-owned businesses are part of sectors such as technology, shipping, logistics, tourism, property, retail and trade.

The undersecretary also revealed that the government had previously made significant strides to facilitate the growth of the sector, including the development of the "Thabat" program.

"A number of pioneering initiatives were launched in the last phase to develop the family business sector, most notably the FB-X family business platform and the 'Thabat' program," he said. "These are specifically designed to support family business investments, help diversify their activities and establish pioneering projects in the areas of the new economy and strengthen their partnerships and opportunities both inside and outside of the country."

One of the aims of the pioneering initiative is to turn 200 family-owned businesses into major companies by 2030, with a market value of over $40.84 billion and annual revenues exceeding $4.90 billion.

The UAE family business law was developed through the collaborative efforts of the Ministry of Economy, concerned federal and local authorities, and family businesses operating in the country. It will come in force in January 2023.