New rules lower UAE’s minimum age for starting a business to 18 years
The UAE has recently amended its laws to make it easier for young people to start their own businesses. Under the new Commercial Transactions Law (Federal Decree by Law No. 50 of 2022), the minimum legal age for setting up, owning, operating, and managing a business has been lowered from 21 to 18 years.
Key details & caveats:
While the headline change is clear, there are several important qualifications to keep in mind:
- At 18 years and older, individuals may independently form a company, own businesses, and manage operations without the previous legal restrictions.
- However, certain legal acts, such as signing a power of attorney, executing contracts, or certain transactions, may still require guardian involvement, particularly if there’s a question of capacity or authority.
- For those younger than 18, there are some circumstances under which business-related activities are allowed. Specifically, minors aged 15 to 18 may engage in trade under prescribed conditions and with approvals. For example, opening a bank account or entering into certain business agreements often requires a guardian’s consent.
Crowdfunding, free zones & other platforms:
The new law also touches on crowdfunding schemes, which are increasingly important avenues for early-stage business ideas:
- Most crowdfunding platforms require users to be 18+ to enter binding contracts or agreements.
- Some platforms, however, allow younger people (as young as 12 in certain cases) to pitch ideas, but always with parental or guardian approval. A good example is Dubai Next, a government initiative that lets younger entrepreneurs present ideas in a supportive environment.
- Regulatory jurisdiction matters: platforms in free zones like DIFC or ADGM are likely to follow their own regulatory frameworks, but generally the minimum for legally binding contracts is 18.
What does this mean for young entrepreneurs? This change is significant in several ways:
- Greater empowerment for youth, lowering the age removes a key barrier for 18-year-olds who have business ideas and want to formalize them.
- Need for guidance, because some legal acts still need guardians, young business owners should understand when their independence starts and where parental/legal oversight is still required.
- Opportunity in startup ecosystems, from incubators to crowdfunding, the regulatory environment is moving to support younger founders; those interested should research specific platform rules and free zone regulations.
The UAE’s reduction of the minimum age for business ownership to 18 reflects a broader push to encourage entrepreneurship among youth. While it broadens opportunity, young entrepreneurs still need to navigate certain legal constraints, especially around contracts, guardianship, and approvals. For those aged 15 to 17, there are pathways to participate in commerce, though often more limited and conditional.
