Understanding the New Age Requirements for Business Ownership in the UAE

The UAE has passed two separate federal laws that lowered the minimum age for business ownership from 21 to 18, but each law did something different.

The first, Federal Decree-Law No. 50 of 2022 (the Commercial Transactions Law), gave 18-year-olds the right to engage in trade and own businesses. It took effect in January 2023. The second, Federal Decree-Law No. 25 of 2025 (the new Civil Transactions Law), goes further. It lowers the general age of legal majority from 21 to 18, granting full legal capacity for contracts, asset management, and civil liability. That law takes effect on June 1, 2026.

Most guides treat this as a single reform. It isn’t. The distinction matters because each law governs different parts of a young entrepreneur’s legal life. Until June 2026, there’s a gap between what an 18-year-old can do commercially and what they can do under civil law.

Here’s what both laws actually mean for you, whether you’re 15, 18, or somewhere in between.

Two laws, one goal: how the UAE lowered the business age to 18

The change happened in two stages, each through a different federal decree-law.

• The Commercial Transactions Law (Federal Decree-Law No. 50 of 2022) replaced the old Commercial Transactions Law No. 18 of 1993. Under the old law, Article 18.1 required a person to be 21 years old to engage in trade. The new law changed that threshold to 18. Article 18.1 now states that anyone who reaches 18 calendar years of age and has no legal impediment is eligible to practice trade. Article 18.2 opened the door even wider: minors aged 15 and above can now trade under conditions set by a Cabinet resolution proposed by the Minister of Economy. The old law required a court order for this. That requirement is gone.
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• The Civil Transactions Law (Federal Decree-Law No. 25 of 2025) takes effect on June 1, 2026, and replaces Federal Law No. 5 of 1985. This is the broader reform. It lowers the age of legal majority itself (the age at which a person is considered a full legal adult for all civil purposes) from 21 to 18.

There’s also a technical detail worth knowing. The old Civil Transactions Law measured age in lunar Hijri years, not Gregorian years. Twenty-one lunar years is roughly equivalent to 20 Gregorian years. The new law switches to Gregorian years entirely, which removes that ambiguity and brings the UAE in line with international standards.

Why the distinction matters: Since January 2023, an 18-year-old has been able to register a business and engage in trade under the Commercial Transactions Law. But their general legal capacity (the ability to sign certain contracts, execute powers of attorney, and handle civil matters independently) remained governed by the old Civil Transactions Law, which still set the majority at 21. Once the new Civil Transactions Law takes effect in June 2026, that gap closes. An 18-year-old will have both trading capacity and full civil legal capacity.
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What 18-year-olds can do independently

Even before the Civil Transactions Law takes effect, persons aged 18 and above can already conduct several business activities without a guardian’s approval. In particular:

• Open bank accounts. 18-year-olds can open their own bank accounts without needing approval from their guardians.
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• Incorporate companies. They may incorporate a company in their name without the approval of a guardian.
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• Obtain trade licenses. Under the Commercial Transactions Law, anyone aged 18 with no legal impediment can apply for and hold a trade license.

After June 1, 2026, the scope of independent action expands. With full legal capacity under the new Civil Transactions Law, 18-year-olds will generally be able to enter binding contracts, manage and dispose of assets, and assume civil liability in their own name, without requiring guardian involvement for most transactions.

That said, specific regulatory requirements (such as minimum capital for certain license types, or sector-specific approvals) still apply regardless of age. Full legal capacity doesn’t waive licensing or compliance obligations. It removes the age-based guardian requirement.
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What still requires guardian or court approval

While the new age of majority provides broader opportunities, there are some important nuances that young entrepreneurs should understand.

• Powers of attorney and certain legal documents. Even with the right to trade at 18, the current legal framework means that 18-year-olds may not have full legal capacity to sign a power of attorney or certain types of legal documents on their own. In this regard, a guardian may still be required to execute POAs or specific contracts on the young person’s behalf. This limitation is expected to be largely resolved once Federal Decree-Law No. 25 of 2025 takes effect in June 2026. Until then, it’s a practical constraint that affects day-to-day business operations, particularly when appointing representatives or signing notarized agreements.
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• Court approval for real property. Where real property is held in the name of a minor (someone under 21 until June 2026, or under 18 after that date), its disposition typically needs to be sanctioned by the court. This applies whether the minor is selling, transferring, or otherwise disposing of the property.
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• Voidable transactions. Under the new Civil Transactions Law, financial acts by a discerning minor that involve both benefit and detriment are treated as voidable in the minor’s interest. This means a guardian can seek to annul such a transaction within one year of learning about it, and the minor themselves can seek annulment within one year after reaching majority. For young business owners, this creates an extra layer of scrutiny on certain deals. It’s a protection, but also a factor that counterparties and investors should be aware of.
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Business activities for 15- to 17-year-olds

For minors below 18 years but above 15 years, trade can be conducted, though subject to certain approvals. The type of these approvals is determined by the nature of the transaction.

Under Article 18.2 of the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), a minor who reaches 15 calendar years of age may practice trade subject to controls and conditions issued by a Cabinet resolution at the proposal of the Minister of Economy. This is a meaningful change from the old law, which required both a minimum age of 18 and a court order for the same activity.

Specific requirements for 15- to 17-year-olds include:

• Bank accounts. They need the consent and signature of a guardian to open and operate a bank account.
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• Employment. If the minor is to be employed, this is only permitted with the consent of the guardian. (UAE labour law also sets 15 as the minimum employment age, with juvenile work permits required for those between 15 and 18.)
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• Disposing of real property. Where property is held in the minor’s name, its disposition typically requires court approval.

The new Civil Transactions Law adds another path. It lowers the age at which a minor can apply for judicial authorization to manage their own financial assets, including business interests, from 18 Hijri years to 15 Gregorian years. This doesn’t mean a 15-year-old automatically gains control of a business. It means a court can grant that authority if it determines that doing so is in the minor’s best interest. It’s a structured path, not an automatic right.
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Practical considerations: free zones, mainland, and freelance licenses

The age requirements can play out differently depending on where and how you set up your business.

• Free zones vs. mainland. Many free zones across the UAE adopted the 18-year age threshold relatively quickly after the Commercial Transactions Law took effect in 2023. Mainland licensing authorities, which fall under the Department of Economy and Tourism (formerly DED), have also aligned, though individual emirates may have variations in their implementation timelines. If you're choosing the right economic zone for your business, confirm the age requirement with the relevant licensing authority directly.
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• Freelance licenses. Freelance licenses in the UAE are now generally available to anyone aged 18 and above, particularly in free zones. This can be a lower-barrier entry point for a young person testing a business idea before committing to a full company formation. (For more detail, see our article on the age for freelance licenses in the UAE.)
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• Crowdfunding. For young entrepreneurs who need initial funding, crowdfunding is an option worth exploring. Dubai Next, a government-backed crowdfunding platform, allows children as young as 12 to pitch business ideas and raise funds, though a parent or guardian’s approval is required. Crowdfunding platforms licensed by the SCA, DFSA (DIFC), or FSRA (ADGM) generally require participants to be at least 18.
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Conclusion

The recent amendments to both the Commercial Transactions Law and the Civil Transactions Law have opened real avenues for young entrepreneurs in the UAE. Persons aged 18 and above can already own and manage businesses, open bank accounts, and obtain trade licenses independently. From June 1, 2026, the remaining legal gap between trading capacity and full civil legal capacity will close.

But understanding the nuances is what matters. The approvals required at different ages, the limitations on certain legal documents, the difference between what you can do commercially versus civilly. These details determine whether a young business owner can operate smoothly within the UAE’s legal framework.

If you’re 18 (or approaching it) and considering starting a business in the UAE, the legal path is clearer than it’s ever been. The key is knowing which law applies to what you’re trying to do, and planning accordingly.

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