Toward an Optimal Family Business Legal Framework in the Arab World: Challenges and Opportunities

Abstract Legislative intervention to regulate family businesses has been rare globally. This article assesses recent legislative developments in the United Arab Emirates (UAE), where the first law of its kind governing family businesses was recently introduced. It explores and analyses the new law's special dispute resolution mechanisms and provisions on the internal governance of family businesses. The article also identifies recent legal developments in Saudi Arabia, which are seen as the beginning of a new regulatory framework for family businesses. To advance the field, the article proposes an optimal regulatory framework for family businesses that takes into account their unique nature and characteristics. Specifically, this article proposes an opt-out model for governing family businesses instead of the opt-in model introduced in the UAE. The proposed model would ensure a more effective regulatory framework for family businesses.