Abu Dhabi: The UAE Ministry of Economy launched a unified registry for family businesses on Wednesday, highlighting four new cabinet resolutions that will enhance the governance of these companies in the country.
Announcing the registry and its procedures, Abdulla bin Touq Al Marri, Minister of Economy emphasised about the importance of this sector to the economy. While family businesses account for 70 per cent of the private sector companies globally, they account for 90 per cent of all private sector business in the UAE.
In the UAE, the sector contributes 40 per cent of the national GDP.
In line with the UAE's economic vision for 2031, the new legislations and tools aim to boost the role of these family-owned enterprises towards achieving the national goal to double the country's GDP to Dh3 trillion by the next decade in accordance with the ‘We the UAE 2031’ vision.
The Ministry outlined the registration process which includes the following steps:
- The majority shareholders of the family-owned company apply for registration in the official registry through the relevant authority in each emirate
- The relevant authority in the emirate, which also covers free zones, verifies that the family company meets all the specified regulations and requirements.
- The relevant authority is in charge of connecting and sharing the mentioned data with the family-owned company, and any changes or updates made to it are communicated to the Ministry of Economy.
- 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 a certificate is issued thereof.
- 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.
The resolution also stipulates the procedures and conditions for deregistering a family company from the Unified Registry upon its request. As per the cabinet decision, there are two scenarios that call for the deregistration of a family company: either at the request of an interested party or by a decision from the competent authority.
Buying back shares
Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, also detailed the process for buying back of shares by families.
Shares can be bought back if:
- The family company's general assembly has approved the purchase process and authorized the board of directors or the family company manager, as necessary, to proceed with the purchase request.
- Then, the family company applies to the relevant authority to seek approval for the purchase, providing a commitment from the company to adhere to the obligations set by the authority
- The family company applying for the purchase is committed to executing the purchasing process within the period specified by the competent authority in approving the purchase request.
- After that, the relevant authority will make its decision to approve or reject the request within 15 business days from the date of the request
Al Saleh confirmed that these new resolutions will offer greater flexibility and facilitation for the operations of family businesses in the UAE, supporting the expansion of their operations across various sectors.
