Family businesses have long served as a cornerstone of the United Arab Emirates’ (“UAE”) economic and social landscape. Their contribution extends beyond commercial success, they embody the values of unity, resilience, and continuity that underpin the nation’s growth story.
Family Charters
At OH LLP, our lawyers play a central role in supporting family-owned businesses throughout the UAE. We advise families on the establishment, structuring, and governance of their enterprises, including the preparation and registration of tailored Family Charters that reflect the family’s values, define members’ rights and obligations, and set out mechanisms for decision-making, profit distribution, dispute resolution, and succession planning.
With extensive experience in corporate and family business law, OH LLP is recognized as one of the leading law firms in the UAE for assisting in the formation of family businesses and drafting Family Charters, helping families safeguard their legacy, maintain harmony, and ensure long term continuity across generations.
The Importance of Family Businesses in the Region
The importance of family businesses in the UAE and across the GCC is rooted in the region’s social and economic foundations. Family solidity and the intergenerational transfer of values and leadership have long been central to community stability and economic flexibility.
Family owned businesses make a major contribution to the UAE’s overall economic output and growth. They play a dynamic role in advancing the country’s long term vision of a diversified and sustainable economy. Over the years, many of these enterprises have evolved from modest family ventures into well-established, multi-generational structured businesses that continue to drive economic growth while preserving the heritage and identity of their founding families.
The UAE’s progressive and business friendly environment has further empowered families to establish and expand businesses that reflect their legacy and uphold their reputation, a clear reflection of the nation’s enduring commitment to entrepreneurship, innovation, and sustainable prosperity.
A Progressive Legal Framework: Federal Law No. (37) of 2022 on Family Businesses
Recognizing the strategic importance of family businesses, the UAE enacted Federal Law No. (37) of 2022 on Family Businesses, a forward looking part of legislation that provides a structured legal framework for their establishment, management, and succession planning.
This Law aims to strengthen family enterprises by:
- Facilitating the transfer of ownership amongst family members.
- Ensuring continuity and stability across successive generations.
- Regulating the creation and registration of Family Charters, which define governance rules, management structures, and dispute resolution mechanisms.
This legislative development reflects the UAE’s commitment to preserving family businesses as a national economic asset while ensuring they remain well governed and adaptable to changing market conditions.
Experience has shown that many family businesses face challenges during generational transitions particularly when the founder’s vision is not clearly documented or communicated. Doubts regarding ownership, management, or the strategic direction of the business can give rise to internal disputes that may threaten both family harmony and corporate stability.
A Family Charter serves as the most important governance tool that mitigates these risks by:
- Defining the roles and responsibilities of family members.
- Translating the founder’s vision into a shared, enduring family strategy.
- Establishing procedures for decision-making, profit distribution, and ownership transfer.
- Providing mechanisms for resolving issues and deadlocks and succession planning.
- Preparing the next generation of leaders to take on managerial and governance roles.
When carefully drafted and properly executed, a Family Charter not only safeguards the family’s business interests but also strengthens its cohesion, ensuring that the enterprise continues to thrive across generations.
With deep expertise in corporate and family business law, OH LLP has been at the forefront of advising family enterprises in the UAE. Our firm assists clients in drafting detailed Family Charters that are tailored to the family’s structure, values, and long term objectives.
Each Charter we prepare sets out a clear governance framework that covers shareholding arrangements, profit allocation, dispute management, and succession planning. We also work closely with families to develop leadership transition strategies, preparing the next generation with the knowledge, skills, and structures necessary to ensure the continued prosperity of the family business.
Our approach combines legal precision with a practical understanding of family dynamics, ensuring that both business stability and family unity are preserved.
The UAE government continues to prioritise the development of family enterprises as a key component of its economic diversification agenda. The Ministry of Economy & Tourism and the Dubai Department of Economy and Tourism have introduced initiatives and incentives aimed at strengthening the competitiveness, governance, and sustainability of family businesses across the Emirates.
Dubai Law No. (9) of 2020 Regulating Family Ownership in the Emirate of Dubai
At the Dubai emirate level, Dubai Law No. (9) of 2020 Regulating Family Ownership in the Emirate of Dubai, as amended by Law No. (21) of 2024, further enhances the legal landscape for family ownership structures. These legislative advancements collectively reinforce the UAE’s vision of empowering family enterprises as a driving force for sustainable national growth.
Family businesses remain one of the most dynamic pillars of the UAE economy. Their strength lies not only in their financial contributions but also in their ability to sustain shared family values, unity, and purpose across generations.
Families seeking to secure the continuity of their business should not postpone the process of formalizing their governance structures. Challenges related to ownership, management, and succession can emerge unexpectedly and proactive legal planning remains the most effective way to ensure enduring success and harmony.
This article has been written by the experts at OH LLP.
It reflects the personal opinion of the law firm and does not constitute legal advice
We at OHLLP understand that each client’s requirements are different and can provide you with dedicated and personalised legal opinion. Do not hesitate to contact us for further enquiries: info@ohllp.com
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