In one of the widest decisions to empower young entrepreneurs, the UAE has just promulgated reducing the age limit required to engage in trading or owning a business. In particular, the minimum age limit was reduced from 21 to 18 years. To that effect, persons aged 18 years and above may establish, own, operate, and manage businesses within the UAE.
Key Changes and Their Implications
While the reduction of the minimum age requirement provides new opportunities to younger people, there are some significant nuances associated with this change.
Legal Capabilities at Age 18
Even with the new age of majority, there are still several legal disabilities for an 18-year-old in the UAE. For instance, they are not considered to have full legal capacity to sign a Power of Attorney or certain types of documents on their own. In this regard, a minor’s guardian may be required to execute contracts or POAs on their behalf. However, there are still several business activities that 18-year-olds can conduct independently without requiring their guardian’s approval.
Independence for Minors Aged 18 to 21
Minors who are at least 18 years old but below the UAE’s official age of majority, which is 21, have more autonomy in certain areas.
- Opening Bank Accounts: 18-year-olds can open their own bank accounts without needing approval from their guardians.
- Incorporation of Companies: They may incorporate a company in their name without the approval of the guardian.
Business Activities for Minors Aged 15 to 18
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. For instance:
- Bank Accounts: They have to obtain the consent and signature of the guardian to operate a bank account.
- Employment: If the child is to be employed, then again, that is only permitted with the consent of the guardian.
- Disposing Real Property: Where real property is held in the name of a minor, then its disposition would again typically need to be sanctioned by the court as well.
- Legal Framework: Article 18 of the Commercial Transactions Law states that a minor can practice trade upon completion of 15 years of age but should be subject to controls and conditions issued by a Cabinet resolution at the proposal of the Minister of Economy.
Conclusion
The recent amendments in the UAE with regards to the age requirements to own a business have really paved new avenues for budding young entrepreneurs. While persons of 18 years and above can now legally own and manage businesses, there are certain legal constraints that the said age group needs to go through, especially when it comes to signing contracts or other legal documents. Understanding such nuances and the approvals required is key to young business owners conducting their operations successfully within the UAE’s legal framework.
