New family business law effective from Jan

LAW SET TO RAISE UAE’S POSITION AS FAMILY BUSINESS HUB

Family-owned companies in the GCC countries are relatively young, ranging in age between 40 to 60 years, and generate an annual revenue of nearly $100 billion.”

Abdullah Bin Ahmad Al Saleh | Undersecretary of the Ministry of Economy

The Ministry of Economy shared key details of the new UAE federal law on family business yesterday. The Federal Decree Law No. 37 of 2022 is part of the comprehensive Thabat programme that aims to turn 200 familyowned businesses into major companies by 2030, with a market value of over Dh150 billion and annual revenues exceeding Dh18 billion.

The Thabat programme was unveiled by Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum, Deputy Ruler of Dubai, and Deputy Prime Minister and Minister of Finance of the UAE, in September this year.

Once the law comes into effect in January 2023, it will provide the legal framework required to ensure the growth of family businesses, help diversify their activities, and facilitate their continuity and longevity through generations.

“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,” said Abdullah Bin Ahmad Al Saleh, Undersecretary of the Ministry of Economy.

Al Saleh pointed out that family businesses account for 70 per cent of the private sector companies globally, 60 per cent of the global workforce, and 70 per cent of the global GDP. In the UAE, 90 per cent of the total number of private companies are family businesses, and their investments cover the sectors of real estate, retail trade, tourism, industry, technology, shipping and logistics services.

Young companies

“Family-owned companies in the GCC countries are relatively young, ranging in age between 40 to 60 years, and generate an annual revenue of nearly $100 billion, and 50 per cent of the owners of these companies include five shareholders or less.”

Al Saleh pointed out that the law forms part of the UAE’s comprehensive efforts to outline a roadmap for the growth and prosperity of family businesses in the country and strengthen their operations in various economic and commercial fields, especially in the sectors of the new economy.