A family that owns a business in the UAE now has more legal tools than it did five years ago, and the tools do not all do the same job. The federal family business law regulates how a company behaves when a family owns it. Dubai's family property law lets relatives put co-owned property under a single contract. A DIFC or ADGM foundation takes the shares out of individual hands altogether. Families and their advisers sometimes treat these as alternatives, and sometimes assume they stack neatly. Neither is quite right. This guide is about how they fit together.
Our guide to the family business company in the UAE already covers the federal law's main features and the three layer structure of operating company, holding company and foundation. Here we take that as read and look at the decision a family faces: the registry route, the foundation route, or both.
The three tools in one place
| Federal family business law | Dubai family property law | DIFC or ADGM foundation | |
|---|---|---|---|
| Source | Federal Decree-Law No. 37 of 2022 | Dubai Law No. 9 of 2020 | DIFC or ADGM foundations legislation |
| What it acts on | A company, once registered | Property co-owned by family members | The foundation's own assets |
| Who owns the shares | Family members individually | Family members, under the contract | The foundation |
| On a death | Shares pass to heirs; the family character continues | Heirs may join the contract or sell, subject to pre-emption | Nothing passes through the estate |
| Governing document | Articles of association and family charter | Notarised family property contract | Charter and by-laws |
| Duration | While the company remains registered | Up to fifteen years, renewable | Indefinite |
| Disputes | Reconciliation, then the emirate's dispute committee, with arbitration or financial free zone courts by agreement | A special tribunal formed by the Ruler | The centre's own courts |
What the federal register does, and what it does not
Federal Decree-Law No. 37 of 2022 concerning family businesses was issued on 3 October 2022 and took effect on 10 January 2023. Registration is a choice for the majority shareholders. The Ministry of Economy began accepting applications for the unified register in May 2024, under Cabinet Decision No. 109 of 2023. An application goes to the authority that licensed the company, which passes it to the Ministry for review. The family charter can be deposited with the Ministry as well, under Cabinet Decision No. 106 of 2023, but that too is voluntary.
The law is good at regulating behaviour between family co-owners. It restricts sales to people outside the family, gives the other partners a right to recover shares that reach an outsider, lets the company issue voting and non-voting share classes, and sends disputes to a reconciliation process before they reach a court. It also confirms that arrangements family members make during their lifetime about the ownership and transfer of shares are not in breach of the personal status law.
What it does not do is take the shares out of the estate. On a partner's death, unless the articles provide otherwise, the company's director stands in as trustee over the deceased's shares and supervises their transfer to the heirs, each according to the heir's legal share. An heir can stay in as a partner or sell, subject to the pre-emption rules. The company keeps its family character, which is valuable, but the ownership still fragments with each generation. That is the gap a foundation fills.
Two other points matter when a foundation is in view. The articles of association prevail over the charter where the two conflict, so a charter is only as strong as the articles beneath it. And the law applies in the free zones only to the extent that it does not conflict with the free zone's own legislation.
Dubai's own family property law
Dubai acted first. Law No. 9 of 2020 Regulating Family Property in the Emirate of Dubai was issued on 13 August 2020. It works differently from the federal law. Instead of registering a company, family members who co-own property sign a family property contract, attested by a notary public, that records each partner's share, appoints a manager and sets the rules for transfers. The property can be shares in commercial and civil companies, other than public joint stock companies, or any other movable or immovable property.
The contract has limits a foundation does not. Its term cannot exceed fifteen years, though the partners can renew it unanimously. It binds family members as co-owners; it does not replace them as owners. And disputes go to a special tribunal formed by the Ruler. The federal law, for its part, gives way to local legislation where an emirate has regulated these matters, so a Dubai family should ask its lawyers how the two laws interact for its particular assets.
What the foundation adds
A DIFC foundation, or its ADGM equivalent, is a legal person that owns assets in its own name and has no shareholders. Once the family's shares are transferred into it, a death changes who benefits and who sits on the council, on terms the founder set, but the shares themselves stay where they are. The foundation's charter and by-laws can carry most of what a family charter would: eligibility to benefit, distribution policy, the family's role in appointing directors of the companies below, and the process for resolving disagreement. Our comparison of a DIFC foundation and a trust explains why UAE families tend to prefer the foundation's model of retained control.
Demand is rising. The DIFC's first half results, published on 28 July 2026, put the number of foundations at 1,409, up 67 per cent in a year. That growth has coincided with 2026 being the UAE's Year of the Family, which has put family governance on more founders' agendas.
When the registry route alone is enough
Take a family in which three siblings each own a third of a mainland trading company, all work in it, and none has yet thought seriously about the next generation. Their pressing problems are between themselves: what happens if one wants to sell, how profits are paid out, what a cousin needs to have done before joining the business. The federal register answers those questions at company level, with a statutory process for disputes, and does so without moving any shares. For a family at this stage, registration and a well drafted charter may be the right first step, and the ownership question can come later.
The registry route also suits a family that wants the business to stay in individual names for reasons of its own, for example because the family's lawyers advise that a direct shareholding fits the family's estate planning better.
When the foundation alone is the better answer
The foundation becomes the better answer once the problem is what happens on a death. A founder who owns most of the business personally, with children who will not all work in it, gains little from a register that keeps the company's family character while the shares still divide between heirs. Putting the stake into a foundation means the business never has a shareholder who has died, and the founder's rules on benefit and control apply from the first day.
The foundation also suits families whose assets are not only one UAE company: property, investment portfolios, holdings in several countries. A foundation can sit above all of them through a holding company, which the federal register cannot, because it regulates one company at a time. Our guide to family office structuring and governance covers the point at which that holding layer grows into a family office.
When both make sense, and the question to settle first
Combining the tools is possible, but it is not automatic, and the order matters.
The federal law defines a family business as a company most of whose shares are owned by people belonging to a single family. A company owned by a foundation is owned by a legal person. On a plain reading it may not meet that test, and the English text of the law does not deal with foundations directly. We have not seen published guidance settling the point. Before a family transfers the shares of a registered family business into a foundation, its lawyers should confirm with the licensing authority whether the company can stay on the register, and what happens to any share classes and charter provisions if it cannot.
Where the answer allows it, combinations worth considering include:
- A foundation that holds the founder's own stake through a holding company, while a separate business co-owned directly by siblings stays on the register with its own charter.
- Registration and a charter adopted now, while the family takes the time it needs to agree the foundation's terms, with a planned move of the shares into the foundation later.
- A foundation at the top whose by-laws reproduce the family charter's rules, so that the family's governance survives even if the company below ceases to be a registered family business.
On disputes, the federal law lets the parties agree to take a family business dispute to arbitration or to the courts in the financial free zones, and it subjects disputes over family businesses registered in a financial free zone to that zone's own legislation. That makes it possible to bring the company's disputes and the foundation's disputes into the same forum, the DIFC Courts or the ADGM Courts, if the documents are drafted to say so and the lawyers confirm that the agreement works for the company concerned.
Charter, articles and by-laws
Whichever route a family takes, the governance rules live in more than one document, and they have to agree with each other. The federal law makes the articles prevail over a conflicting charter. A foundation's by-laws govern the foundation, not the company below it, so they act through the foundation's votes as shareholder rather than directly on the company. A Dubai family property contract is deemed to accept the articles of any company whose shares it covers.
The practical consequence is that the family's decisions need to be made once and then written into each document by lawyers working from a single brief. Our article on business control and succession planning sets out the questions that brief should answer, and the comparison of DIFC and ADGM foundations covers the choice of centre for the foundation itself.
A note on share classes outside the family business law
Share classes used to be one of the main reasons to register. That is changing. Federal Decree-Law No. 20 of 2025, which amends the Commercial Companies Law and came into force on 15 October 2025, permits mainland limited liability companies to issue more than one class of shares with different economic and voting rights, according to commentary from international law firms. Parts of the regime depend on implementing regulations, so a family should not assume it is available in its emirate without checking. Where it is, a company can separate economic benefit from control without registering, and the decision to register rests more on the charter, the transfer restrictions and the dispute process.
How Atlas helps
Atlas is a corporate service provider registered with the DFSA as a DNFBP, working in both the DIFC and ADGM. We form and administer foundations and the holding companies beneath them, keep their registers and filings current, and support the councils that run them. We do not give legal advice, draft wills or register companies on the federal family business register; we work alongside the family's lawyers, who advise on the federal and Dubai laws and draft the charter, articles and by-laws, so that the foundation side of the structure is ready when the legal design is settled. Where the structure raises tax or accounting questions, GTAG, our sister company in the GTAG/Assetica group, can assist.
If your family is weighing the register, a foundation or both, speak with the Atlas team about what the family owns and who is meant to own it next.
This article is general information and does not constitute legal, tax or regulatory advice. DIFC and ADGM rules change; confirm the current position with a qualified adviser for your specific case.
Frequently Asked Questions
Is registering as a family business in the UAE compulsory?
No. Under Federal Decree-Law No. 37 of 2022 the shareholders who own the majority of a company's shares decide whether to register it on the unified family business register. The Ministry of Economy began accepting applications in May 2024. Applications go through the licensing authority that issued the company's licence, which forwards them to the Ministry for review. Depositing the family charter with the Ministry is also optional. Joint stock companies and partnership companies are outside the law's scope.
Does registering as a family business solve succession?
Only partly. Registration keeps the company's family character on a death and restricts who the shares can be sold to, but the shares themselves still pass to heirs. The law provides that on a partner's death the company's director, unless the articles say otherwise, acts as trustee over the deceased's shares and supervises their transfer to the heirs according to each heir's legal share. If the family's aim is to keep the shares out of the estate altogether, a foundation does that and registration does not.
Can a company owned by a DIFC foundation still be a registered family business?
This needs checking before anyone relies on it. The federal law defines a family business as a company most of whose shares are owned by people belonging to a single family. A DIFC or ADGM foundation is a legal person with no shareholders, so a company it owns is not, on the face of it, owned by family members. The English text of the law does not address foundations directly. Ask the family's lawyers to confirm the position with the licensing authority before transferring shares.
What is a family property contract under Dubai Law No. 9 of 2020?
It is an agreement between members of one family, meaning the spouse and blood relatives and in-laws up to the fourth degree, who co-own property and are engaged in business together or share a common interest. It records each partner's share, appoints a manager, and restricts transfers to outsiders. It must be attested by a notary public in Dubai. Its term cannot exceed fifteen years, although the partners may renew it unanimously for further terms of up to fifteen years.
Where are family business disputes heard?
It depends on the tool. Under the federal law, disputes go first to any reconciliation body set up by the articles or charter, then to a family business dispute settlement committee in the relevant emirate, whose decisions can be appealed in court. The parties can instead agree on arbitration or on the courts in the financial free zones. Dubai family property contract disputes go to a special tribunal. Disputes about a DIFC or ADGM foundation's own constitution belong in that centre's courts.
Should the family charter or the foundation by-laws come first?
The thinking should come first and the documents second. The family needs to settle who may own, who may work in the business, how profits are shared and how decisions are taken before anyone drafts either document. Once those answers exist, the lawyers can decide which of them belong in a charter, which in the company's articles and which in the foundation's by-laws. Under the federal law the articles prevail over a conflicting charter, so the documents must be drafted together.
Key Takeaways
- Federal Decree-Law No. 37 of 2022 works at company level: a registered family business gets transfer restrictions, share classes, a family charter and a dispute committee, but the shares still belong to individuals and still pass to heirs on death.
- Dubai's Law No. 9 of 2020 is a separate, contractual tool: family members who co-own property sign a notarised family property contract for a term of up to fifteen years, renewable.
- A DIFC or ADGM foundation works at ownership level: it holds the shares itself, so nothing passes through an estate, and its by-laws carry rules that would otherwise sit in a family charter.
- The tools can be combined, but not automatically. A company owned by a foundation is owned by a legal person rather than family members, so whether it can stay on the family business register is a question for the family's lawyers and the licensing authority before the structure is built.
- Most families end up choosing by asking one question first: is the problem how the family behaves as co-owners, or what happens to the shares when an owner dies?