What is succession planning in a family business?

It is the plan for passing a family business to the next generation. It answers 3 questions, each in its own document:

  • Ownership: who holds the shares after the founder, and on what terms they can sell them. This sits in the articles of association, any family holding structure and each owner's will.
  • Management: who runs the company day to day, and who appoints and removes them. This sits in the articles and the board's rules.
  • Leadership of the family: how the family takes decisions about the business, settles disagreements and prepares the next generation. This sits in a family charter.

Family businesses make up 90% of private companies in the UAE and produce 40% of its GDP, the Ministry of Economy said in December 2023. [3] The day-to-day governance rules, including the family charter, are in our guide to corporate governance in the UAE.

What does the UAE Family Business Law do for succession?

The law is optional. Partners who own the majority of a company's shares decide whether to register it as a family business. [1] It applies to companies of any form under the Companies Law, including one-person companies, and to free zone companies as far as the free zone's own rules allow. Joint stock companies and partnerships are excluded. [1]

Who counts as one family?

Since 15 August 2026, Cabinet Resolution No. 142 of 2026 defines "a single family" for the law. It includes: [2]

  • ascendants and descendants, however remote, and relatives who share a common ancestor
  • spouses, and relatives by marriage
  • distant kindred, as the law defines them
  • children placed in the family's care, or adopted, under UAE law
  • a family waqf (a private endowment) for any of these people
  • a company or other legal person that these people own or control by majority, or whose beneficial owners are mostly family members

So a family holding company, or a family waqf, can own shares in the registered family business and still count as family. [2]

How do you register a family business?

The application goes to the licensing authority that issued the company's licence, which passes it to the Ministry of Economy and Tourism. Once the Ministry has checked the company against the law, it registers it in the Unified Family Business Register [4][5] and issues a document confirming the registration. [1] Applications opened on 22 May 2024, and the first companies were registered by May 2025. [4][5]

In mainland Dubai, the Dubai Business Registration and Licensing Corporation treats registration as a reclassification of the existing company. The memorandum or articles are amended to reflect the family's ownership, and filing a family charter is optional. [6]

A family business can leave the register if partners owning at least three quarters of the capital ask for it. It loses its status, and can be removed from the register, if people outside the family come to own the majority of its voting shares. The company then continues in its earlier form. [1]

How does the law handle share transfers, deaths and buy-outs?

The general pre-emption rule (offer your shares to the other family partners first) is set out in our governance guide. The rules that matter most for succession: [1]

Situation What the law says Article
A partner sells to someone outside the family Needs partners owning at least three quarters of the capital to agree, unless the articles set another figure. The sale can be made conditional on the shares becoming non-voting 8(2) [1]
An outsider acquires shares any other way The family partners can buy them back within 60 days, at an agreed price or one set by the dispute committee. If they don't, the company has 30 days 8(3), 8(4) [1]
One partner holds 90% or more That partner can offer to buy the non-family partners' shares. They may sell at an agreed price or one set by the committee 9(1) [1]
One partner holds 95% or more of the voting shares That partner can make the same offer to the other family partners, who may sell on the same basis 9(3) [1]
The company buys its own shares Up to 30%, to reduce capital or to buy out a partner who wants to sell or is bankrupt, where no partner will buy 11 [1]
A partner dies Unless the articles say otherwise, the company's director takes charge of the shares and oversees their transfer to the heirs, each by their legal share. Each heir may stay as a partner or sell under the transfer rules 15(2), 24(2) [1]
A partner dies, is declared bankrupt or loses capacity The company keeps its family business status, unless the articles say otherwise 23(3) [1]
A partner sells, gives or grants the use of shares during their lifetime Arranging ownership this way under the law does not breach the Personal Status Law 24(1) [1]

The last row matters to families whose estates follow the fixed shares of the Personal Status Law. It covers only lifetime arrangements made under the Family Business Law or a free zone's laws. [1] The fixed shares, and how a family waqf must respect them, are in our guide to Shariah succession and waqf.

Can a family business issue voting and non-voting shares?

Yes. A registered family business may issue: [1]

  • Class A shares, which carry profits and votes
  • Class B shares, which carry profits only

The articles can set when one class converts into the other, and can create further classes with different votes, profits or priority rights. [1] Decision No. 108 of 2023 on share classes, announced by the Ministry of Economy, adds that where the articles are silent, changing or cancelling a class needs a vote of at least 75% of the partners with voting rights. [3]

So family members who run the business can hold the votes, while others receive dividends.

How are family business disputes settled?

The law sets a sequence: [1]

  1. A family board. The articles or the charter can create a board of partners, family members or outsiders to reconcile the parties. It has up to 3 months, unless they agree to extend.
  2. The Family Business Dispute Settlement Committee. Each emirate has one. It decides within 3 months, extendable by 3 more on a reasoned request, and can take urgent steps to keep the business running.
  3. The courts. The committee's decisions can be appealed.

The parties can instead agree on arbitration, or on the courts of a financial free zone. Family businesses registered in a financial free zone follow that zone's own dispute rules. [1]

What do Dubai's Family Ownership Law and Abu Dhabi's law add?

Where an emirate has its own law on family companies, the federal law applies only to matters that local law doesn't cover. [1]

Dubai Law No. 9 of 2020 Regulating Family Property (often called the Dubai Family Ownership Law) works through a contract between relatives rather than through the company's own documents. [6][7]

  • Who: spouses and relatives by blood or marriage up to the fourth degree, who work together or share an interest. [7]
  • What: shares in companies (except public joint stock companies), sole proprietorships and any other property. [7]
  • Form: the contract is attested by a notary public. It runs for up to 15 years and can be renewed if every partner agrees. It can be set to start on the death of a named partner. [7]
  • Heirs choose to join the contract or to sell their share, first offering it to the other partners. [7]
  • Selling to an outsider needs partners owning at least 51% to agree. Changing the contract needs 75%, unless it sets a higher figure. [7]
  • Management: a manager is appointed by partners owning two thirds. The contract can set the qualifications family members need to work in the businesses. [7]
  • Disputes: the law gives them to a special tribunal formed by resolution of the Ruler of Dubai. [7]

Abu Dhabi Law No. 10 of 2021 applies when all the company's owners ask the Department of Economic Development. [8]

  • "Family" means the spouse and blood relatives up to the fourth degree. Unlike the Dubai law, the definition does not mention in-laws. [8]
  • The founders can bar sales to anyone outside the family. Outsiders may own no more than 40%, and the company loses its status above that. [8]
  • Founders can hold double-vote shares, which keep their extra votes when inherited. [8]
  • The memorandum can direct up to 30% of net profits to heirs or other beneficiaries, named or identified by degree of kinship. The general assembly can raise the figure. [8]
  • After a founding partner dies, the partners have 1 year to transfer the shares to the heirs, which the Department can extend. [8]

Holding companies, foundations and the family business

When the founder holds shares personally, each block of shares passes through that person's estate. When a holding company or a foundation owns the shares, the business has one stable shareholder, and succession is planned at the level of that holding entity. [6] A family-controlled holding company still counts as family for the register. [2] The structures are compared in our guides to holding companies, foundations and trusts and foundations.

A structure doesn't replace a will. Shares held personally, including shares in the holding company, still pass under each owner's will or the default rules. See wills in Dubai and the UAE.

How is a family business transfer taxed in the UAE?

For individuals. The UAE has no inheritance, estate or gift tax on individuals. [6][11] For corporate tax, an individual's personal investment income is not treated as business income. [10]

For companies, the Corporate Tax Law has 4 rules that shape a restructuring: [9]

Rule What it does Main conditions
Transfers within a qualifying group (Article 26) [9] Assets move between 2 companies at book value, with no gain or loss One owns at least 75% of the other, or a third person owns at least 75% of both. Both UAE resident (or with a permanent establishment here), same year end, same accounting standards, neither exempt nor a Qualifying Free Zone Person. The relief is lost if, within 2 years, the asset leaves the group or the companies stop being in the same group
Business restructuring relief (Article 27) [9] A whole business, or an independent part, moves into a company in exchange for its shares, with no gain or loss Done under UAE law; the same residence, exempt-person, free zone, year-end and accounting conditions; and valid commercial or other non-tax reasons. The relief is lost if, within 2 years, the shares leave the group or the business is transferred on
Participation exemption (Article 23) [9] A holding company's dividends and gains from a shareholding are exempt At least 5%, held (or intended to be held) for 12 months, in a company taxed at 9% or more, plus further conditions. Not available for 2 years where the shares came through an Article 26 or 27 transfer
Related parties (Articles 34 and 35) [9] Deals between related parties must be priced at arm's length Relatives up to the fourth degree are related parties, as are companies they own 50% or more of, or control

Dividends a company receives from another UAE resident company are exempt. [9] Family foundations can apply to be treated as tax-transparent [6]; see our foundations guide. Tax filings and any representation before the Federal Tax Authority are for a registered tax agent.

Passing on a family business across borders

Which country's law applies? Under the UAE Civil Transactions Law, in force since 1 June 2026: [12]

  • succession is governed by the law of the country the deceased belonged to
  • a will is governed by the law it names, or otherwise the law of the testator's nationality
  • UAE law applies to a foreigner's will about immovable property in the UAE

So, unless a will chooses another law, the founder's home-country rules can govern who inherits shares in a UAE company. A family with assets in several countries needs wills and structures that agree with each other. The default UAE rules are in our guide to inheritance law in the UAE.

Indian families and the Hindu Undivided Family (HUF)

A Hindu Undivided Family (HUF) is a family unit that Indian tax law treats as a taxpayer in its own right, separate from its members. [13]

  • Residence: under the Income-tax Act 2025, an HUF is resident in India unless the control and management of its affairs is wholly outside India in that tax year. So the manager (the karta) moving to Dubai makes the HUF non-resident only if its control and management is then wholly outside India. [14]
  • Not ordinarily resident: an HUF can be "not ordinarily resident" if its manager has been non-resident in India in 9 of the previous 10 tax years, or in India for 729 days or less over the previous 7 tax years. [14]
  • Sending money abroad: the Reserve Bank of India's Liberalised Remittance Scheme is not available to HUFs. [15] The rules for individuals are in our guide to moving money from India.

An Indian chartered accountant or lawyer advises on a family's own HUF, FEMA and Indian tax position. Your Indian residence status is explained in NRI, RNOR or resident.

How Marlborough Gulf helps

What we do:

  • We map who owns, manages and leads the family business today, and what the family wants for each after the founder.
  • We compare the routes (the federal register, a Dubai family property contract, a holding company or foundation) against the family's countries and faiths, and design the structure.
  • We form and run UAE companies, including RAK ICC holding companies as a RAK ICC registered agent, keep the books, and advise on the corporate tax side of any restructuring.

What others do: law firms draft the articles, family charter, family property contract and wills. The licensing authority and the Ministry of Economy and Tourism register the family business. A notary public attests a Dubai family property contract. A registered tax agent acts for you before the Federal Tax Authority. In India, a chartered accountant or lawyer advises on the HUF.

Succession planning in the UAE →

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Common questions

What is succession planning in a family business?

It decides who will own, run and lead the business after the founder. In the UAE those decisions sit in the articles, a family charter, any holding structure and each owner's will. [1]

What is succession in a family business?

It is the handover of a family business's ownership, management and family leadership from one generation to the next. In the UAE, a registered family business can follow the Family Business Law's own rules on transfers and deaths. [1]

What is a Hindu Undivided Family (HUF)?

A family unit that Indian tax law treats as a separate taxpayer from its members. It is resident in India unless its affairs are controlled and managed wholly outside India. [13][14]

This guide is general information, not legal or tax advice for your circumstances. Rules differ between the emirates and each free zone.

Marlborough Gulf does not give investment, pension or insurance advice. Regulated services are provided by licensed firms, who contract with you directly.

Sources

  1. Federal Decree-Law No. 37 of 2022 Concerning Family Businesses, issued 3 Oct 2022, in force 10 Jan 2023, Articles 3, 4, 8, 9, 11, 12, 15, 19, 20, 21, 23 and 24 (UAE Legislation portal, state Active). Read 29 Oct

    https://uaelegislation.gov.ae/en/legislations/1608

  2. Cabinet Resolution No. 142 of 2026 Regarding the Determination of the Meaning of a Single Family in Family Businesses, issued 24 Jul 2026, in force 15 Aug 2026, Article 2 (UAE Legislation portal). Read 29 Oct 2026. https://uaelegislation.gov.ae/en/legislations/4588
  3. UAE Ministry of Economy, "Ministry of Economy launches Unified Family Businesses Registry and reviews four new decisions to strengthen the sector's governance", 26 Dec 2023. https://www.moet.gov.ae/en/-/ministry-of-economy-launches-unified-family-businesses-registry-and-reviews-four-new-decisions-to-strengthen-the-sector-s-governance
  4. UAE Ministry of Economy, "Ministry of Economy starts accepting applications for registration of family businesses in the unified registry", 22 May 2024. https://www.moet.gov.ae/en/-/ministry-of-economy-starts-accepting-applications-for-registration-of-family-businesses-in-the-unified-registry
  5. UAE Ministry of Economy, "Ministry of Economy announces registration of first batch of national companies in the Unified Family Business Registry", 22 May 2025. https://www.moet.gov.ae/en/-/ministry-of-economy-announces-registration-of-first-batch-of-national-companies-in-the-unified-family-business-registry
  6. Invest in Dubai (Dubai Department of Economy and Tourism), Family Businesses in the Emirate of Dubai: A Guidebook, April 2025, sections 2.2, 5, 7.1 and 12. https://www.investindubai.gov.ae/en/-/media/Files/2025/en-family-businesses-in-the-emirate-of-dubai-guidebook.pdf
  7. Dubai Law No. 9 of 2020 Regulating Family Property in the Emirate of Dubai, issued 13 Aug 2020, Articles 2, 4, 6, 8, 9, 10, 13, 16 and 23 (Dubai Legislation Portal). https://dlp.dubai.gov.ae/Legislation%20Reference/2020/Law%20No.%20%289%29%20of%202020%20Regulating%20Family%20Property%20in%20the%20Emirate%20of%20Dubai.html
  8. Abu Dhabi Law No. 10 of 2021 Concerning the Governance of Family-Owned Companies in the Emirate of Abu Dhabi, issued 29 Sep 2021, Articles 1 to 7 and 12, Abu Dhabi Official Gazette, 9th edition, 30 Sep 2021. https://www.abudhabi.gov.ae/-/media/sites/adgov/gazettes/2021/en/9english2021.ashx
  9. Federal Decree-Law No. 47 of 2022 on Corporate and Business Tax, Articles 22, 23, 26, 27, 34 and 35 (UAE Legislation portal, last update listed 1 Oct 2025; Ministry of Finance English text). https://uaelegislation.gov.ae/en/legislations/1582 https://mof.gov.ae/wp-content/uploads/2022/12/Federal-Decree-Law-No.-47-of-2022-EN.pdf
  10. Federal Tax Authority, Corporate tax: basis of taxation for natural persons, updated 6 May 2024. https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/basis.of.taxation.natural.person.aspx
  11. PwC Worldwide Tax Summaries, UAE: individual, other taxes, reviewed 9 Sep 2026. https://taxsummaries.pwc.com/united-arab-emirates/individual/other-taxes
  12. Federal Decree-Law No. 25 of 2025, Civil Transactions Law, Article 17 (1), (3) and (5); in force 1 Jun 2026 (UAE Legislation portal). https://uaelegislation.gov.ae/en/legislations/4011
  13. Income-tax Act 2025, section 2(77) ("person" includes a Hindu undivided family), Income Tax Department. Read 29 Oct 2026. https://www.incometaxindia.gov.in/w/section-2-1
  14. Income-tax Act 2025, section 6(9) and 6(13) (residence of a Hindu undivided family), Income Tax Department. Read 29 Oct 2026. https://www.incometaxindia.gov.in/w/section-6-1
  15. Reserve Bank of India, Liberalised Remittance Scheme FAQ, Q1, updated 6 Apr 2023. https://rbi.org.in/Scripts/FAQView.aspx?Id=115