A new family business ownership governance law has been issued in Abu Dhabi.
President His Highness Sheikh Khalifa bin Zayed Al Nahyan issued the law in his capacity as Ruler of Abu Dhabi.
The new law prevents selling shares or dividends of family- owned businesses to individuals or companies outside the family, and requires prior approval from family partners before a shareholder sells an equity stake to a non-family member.
It's aimed at strengthening the sector’s contribution to the economy and facilitates the transition to successive generations.
The provisions of this law are applied to family-owned businesses on an opt-in basis for owners or co-founders by submitting a request to the Abu Dhabi Department of Economic Development (ADDED).
ADDED will issue the executive and administrative regulations of the new law from March 2022.
The latest law is not applicable to family-owned businesses where non-family members own more than 40 per cent of shares.
In his capacity as Ruler of Abu Dhabi, Khalifa bin Zayed has issued a law regulating family business ownership to further enhance the sector’s contribution to the local economy and ensure smooth transition to successive generations. pic.twitter.com/vowdLDnFOr— مكتب أبوظبي الإعلامي (@ADMediaOffice) January 25, 2022