The UAE Ministry of Economy has unveiled a groundbreaking initiative to reinforce the governance of family businesses with the launch of the Unified Family Businesses Registry under the Thabat Program. Four new cabinet resolutions have been issued to support the registry, which aims to enhance the competitiveness of legislation governing the family business industry in the UAE. Moreover, the registry ensures sustainability and leadership in line with the UAE’s vision to become a global hub for family businesses.
Family businesses
H.E. Abdullah bin Touq Al Marri, UAE’s minister of economy, underscored the crucial role of family businesses in global economies. Globally, family businesses contribute to 70 percent of private sector companies. They employ 60 percent of the workforce and contribute to 70 percent of the global GDP. In the UAE, family businesses make up 40 percent of the national GDP and constitute 90 percent of private companies. They support the national goal of doubling the GDP to AED3 trillion by 2031.
Visionary legislation and initiatives
Al Marri highlighted the UAE’s commitment to international best practices in developing family businesses. Initiatives such as the Thabat program exemplify the country’s dedication to sustainable growth and expansion into new economic sectors. The Family Charter, a key component, defines ownership rules, goals, and values, ensuring the success and continuity of family businesses across generations.
Meanwhile, H.E. Abdullah Ahmed Al Saleh, undersecretary for foreign trade and industry at the Ministry of Economy, outlined two pillars for the development of a robust family business ecosystem in the UAE. The first focuses on legislative aspects, exemplified by Federal Decree-Law No. 37 of 2022 on Family Businesses. Meanwhile, the second involves launching policies and programs like Thabat to facilitate the expansion of family businesses into new sectors, fostering a qualitative shift in the sector.
Unified registry implementation
The ministry’s decision to launch a unified registry aligns with Cabinet Resolution No. 109 of 2023 on the registration of family businesses. The registry ensures comprehensive and unified data, managed by the Ministry of Economy, as well as promotes transparency and efficiency in the sector. The registry includes controls and requirements for registration, emphasizing majority family ownership and adherence to the Family Business Law Decree.
Al Saleh detailed the five-step process for registering a family business in the UAE’s unified registry. The steps involve an application, verification, data sharing, ministry registration, and digital connectivity. These steps aim to streamline the registration process, ensuring that family businesses adhere to regulations and contribute to the country’s economic growth.
Moreover, the resolution outlines procedures for deregistering a family company from the unified registry upon request. Al Saleh emphasizes the importance of data accuracy and ownership percentages in determining deregistration. Partners have the right to object, fostering a fair and transparent process.
Three new resolutions
Al Saleh also introduced three additional resolutions supporting a sustainable environment for family businesses. These include:
- The online registration of the family charter (Cabinet Decision No. 106 of 2023)
- Mechanisms for family companies purchasing their shares (Cabinet Decision No. 107 of 2021)
- Controls for the issuance of multiple categories of shares (Cabinet Decision No. 108 of 2023)
These resolutions, Al Saleh said, will provide flexibility for family businesses. They also support their expansion across various business sectors. He also said that these national efforts to enhance the UAE’s attractiveness for family businesses, in alignment with the objectives of the next fifty years, will persist. Hence, the unified registry and accompanying resolutions mark a significant leap forward in the governance and sustainability of family businesses, positioning the UAE as a global leader in the sector.
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How to register a family business in the unified registry?
The registration process for a family business in the unified registry involves five steps. First, the majority shareholders of the family-owned business apply for registration in the official registry through the relevant authority in each emirate. Second, the relevant authority in the emirate, which also covers free zones, verifies that the family company meets all the specified regulations and requirements. Thrid, the relevant authority is in charge of connecting and sharing the mentioned data with the family-owned business, and any changes or updates made to it are communicated to the Ministry of Economy.
Then, the Department of the Unified Registry at the Ministry, after receiving the required data and documents, is responsible for managing the registration of the family company, and issuing a certificate. Finally, if there is no digital connection for data sharing between the Ministry and the relevant authority, the data must be shared using any other coordinated method between the two parties within three working days.
Benefit of unified family business registry
The unified family business registry will serve as a comprehensive and unified database. It will contain all information related to family companies in the country. Moreover, its implementation will also support the competitiveness of the legislation governing the sector in the UAE. The registry will also support family businesses to ensure sustainability and leadership. This solidifies the UAE’s position as a leading destination for local, regional, and global family companies.
It is an important step forward in strengthening the sector’s governance and regulating the registration procedures. Moreover, it builds an integrated work system for family enterprises in the UAE. In addition, it advances legislation and the technology infrastructure they currently benefit from.
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