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New Minimum Age for Conducting Business in the UAE

New Minimum Age for Conducting Business in the UAE

Lawgical with LYLAW and Tim Elliot

14 February 2023

Tim Elliot:  Hello and welcome to Lawgical, the U.A.E.’s first, and really the only, regular legal podcast here from the Emirates.  My name’s Tim Elliot.  Lawgical comes to you from JLT Towers in JLT from the Dubai-based legal firm, HPL Yamalova & Plewka.  As ever, the Managing Partner, here she is, Ludmila Yamalova.  It’s good to see you.

Ludmila Yamalova:  Good to see you too, Tim, always.

Tim Elliot:  This time, we’re looking at the new commercial transactions law, Ludmila.  This should be a reasonably short and sharp podcast, I think, because this is just a change to the law, and it means that if you are 18 you can now freely trade.  If you’re a young person, ready to sink your teeth into your dream business idea, you now don’t have to wait to turn 21.

Ludmila Yamalova:  Indeed.  It seems like a short update, but it is actually quite fundamental in its effect.  As you rightfully said, ultimately what this commercial transaction law makes available is for the younger generation to start owning businesses.  That is a specific provision because in the past the age for trading for 21, and that was considered to be the age of majority.  In general, in the U.A.E., and we have talked about it some on this podcast, there are different ages that apply to different things.  The official age of majority was 21, but what does that mean?  At 21, you could do everything.  You could own a business.  You could open a bank account.  You could give power of attorney and delegate someone to represent you.  You could basically work and marry and everything else.  At the age of 21, you were basically a full-fledged person.  That was considered to be the age of majority.

But then equally so, the driving age was 18.  You could get married at 18.  You could also work at 18 and even earlier.  You could even start working at the age of 15 on a part-time basis.  There were a lot of things you could do, and even with time, you could even have a bank account at the age of 18 as well.  There are a lot more things that in practical terms that adults or youth could do before they reached 21, but still in the law the official age was 21.

For example, if you wanted to sign an agreement, do you have the capacity to sign an agreement?  If you are 19 or 18, and you want to transact with someone, do you have the capacity to sign an agreement or do you have to reach the age of majority?  We had many debates internally about this and what it really meant.  We have these whole webs of different age categories.  I am trying to construct and consistent and concise picture of what it meant in the U.A.E. to be the age of majority and what you could and could not do before then.

One of the limitations was that you certainly could not be listed as a shareholder of a business.  In other words, you could not own a business.  If you were 19 or 18 and you wanted to set up your own company and to have your own business, you could not legally do so.  You had to be represented by a guardian.  It could have been your parents.  It could have been someone else that is older, but ultimately you could not be listed on the trade license, although you could already at that point, in practical terms, have a bank account.  This maybe in the past it would not have been as big of a deal, but now it is because we all know, youth these days are a lot more business savvy and more entrepreneurial that they were perhaps 10 years ago.  Part of it is this whole social media world that has allowed youth, basically kids, not even youth, we hear the stories of kids marketing different products on various social media channels, or for example, reviewing toys.  These kids, truly kids, they make a lot of money around the world from what we see.  I am not of that generation, but I hear it from people.

Tim Elliot:  You’re right.  I don’t know – sneakers, trainers, whatever you want to call them, people trading in unusual brands of trainers and different types of things, kids reviewing toys, social media influencing, but the point is with all of this, in some cases these are serious businesses that have turned out to be remarkable.

Ludmila Yamalova:  Exactly.  Let’s say if you were eight and reviewing toys and making money, you should not be the one listed on the company and making executive decisions.  You should still have some kind of parental oversight and control, but let’s say when you are 15, 16, or 17, certainly when you are 18, these days 18-year-olds are more or less adults.  We have seen and it has been so popular in the U.A.E. as well, various influencers and other types of social media related marketing business propositions and ideas, plus if you wanted to open a cookie-making business, you want to bake cookies or you want to make coffee and sell it, there are so many of these ideas and so many kids these days, the younger generation, that want to explore these ideas.

But until this change in the law, which only became available effective basically just now in 2022, you could not officially be listed on a trade license.  Now that law has specifically changed.  As per this law, now you can be 18 and you can now own your own business.  You can be the shareholder in your business.  It says basically you can trade, so therefore the presumption is that if you are able to have your own name on the trade license, then you can also open a bank account for that particular business, and now you can really become a full-fledged owner and manager of your own business without having to have guardians and other adults representing your business interests.  I think this is great.

Also, this law further introduces an exception, if you will, for those who are between the age of 15 and 18.  We now know that at the age of 18 you can trade, so you can own your own business.  Now there is an additional exception between the age of 15 and 18, and you also can, with a few exceptions.  We don’t know yet what the exceptions are going to be because the law refers to the future cabinet resolution that will set out the exceptions that will be reserved for those who are between 15 and 21.

In the previous version of the law, that same kind of reference and exception existed for those between 18 and 21.  Now in this law, this exception is now reserved for those who are between 15 and 18.  They are obviously reducing the age limit in general for youth to have control over their own business ventures.  In other words, even at the age of 15 now in the U.A.E. you can own your own business, but between the ages of 15 and 18, there will be a few additional limitations perhaps or controls (1) to ensure that it corresponds with the overall legal framework in the U.A.E. perhaps and (2) the individual’s ability to make business decisions, I guess, that is what it comes down to ultimately.  There will be some sort of oversight and control, but that particular exception is going to be spelled out further in future regulations.

Tim Elliot:  Okay.

Ludmila Yamalova:  All in all, I think this is a huge step forward because it now allows people to be adults a little earlier.  With that, Tim, I also think they might even reduce the official definition of the age of majority because I don’t really know what else is left for the age of majority, what else you can do, because if now you can work at the age of 18, and even at the age of 15, you can get married at the age of 18, you can have a bank account at the age of 18, now explicitly you can even own your own business at the age of 18, and if you can own your own business, the presumption is you can sign your own documents because when you open a business, you have to sign all sorts of corporate documents, so the presumption is that you are able to bind yourself and have legal capacity and authority to enter into legal agreements and commitments.  Therefore, I am not quite sure what else is left for the age of 21.  I guess that is an interesting space for us to watch and see how the definition of the age of majority in the U.A.E. might change along with this recent change.

Tim Elliot:  Some speculation.  Let’s see what happens.  Watch this space.  I know one thing, I talked to my son.  He is 19 and if I had known at that age what he knows, I’d be a lot further ahead in my life, Ludmila.  The times, they are a changing, is what I am saying.

Ludmila Yamalova:  There it is.  I think this is another example of how the U.A.E. is keeping up with the changes and the developments of the time and responding rather quickly to these changes by virtue of introducing this new regulation that allows people to legally exist and try out different business ventures without having to come up with all sorts of schemes and machinations that ultimately do not reflect the actual purpose of what they are trying to do.  Just in the interest of completeness, the law that we are talking about is the new Federal Decree Law Number 50 of 2022 regarding issuance of the commercial transactions law.  That is basically the law that we are talking about, in particular Article 18.1.  That is the one that sets out the new age for trading, and there is also Article 18.2 and that is the one that talks about the exception for those who are between the age of 15 and 18.

Tim Elliot:  Okay.  The new commercial transactions law in the U.A.E.  You need to be just 18 years of age by law to trade.  Maybe we can now expect another whole new generation of entrepreneurs.  Let’s see.  Our legal expert, as ever, here on Lawgical, Ludmila Yamalova, the Managing Partner here at Yamalova & Plewka.  Thank you.

Ludmila Yamalova:  Thank you, Tim.

Tim Elliot:  Find us at LYLAW on Facebook, Instagram, TikTok, LinkedIn, and our ever-growing, it’s a huge library, hundreds of podcasts are available for free, all kinds of legal matters are answered in the podcast.  To have a legal question answered in a Lawgical episode in the future or to talk to a qualified U.A.E. experienced legal professional, click Contact at

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