UAE has taken another major step in modernising its laws by reducing the age of majority for commercial transactions from 21 to 18. This amendment has been introduced under Federal Decree‑Law No. 25 of 2025 and will come into force on 1 June 2026. Previously, the age of majority for commercial transactions in UAE was 21 years, and individuals below that age were considered minors and required a guardian’s consent to enter into binding commercial agreements.
Scope of the amendment
With this amendment, the age of majority has been reduced to 18 years, similar to international standards and allowing young adults to participate more easily in business and economic activities. This amendment applies to businesses, banks, families, and young entrepreneurs who want to be part of UAE’s growing market. This brings UAE harmonized with most countries around the world, where 18 years is the standard age of legal adulthood.
Anyone aged 18 or older now has full legal capacity to:
- Sign contracts
- Start a business
- Open bank accounts
- Lease property
- Apply for financing
- Enter into employment agreements
Legal Implications of the amendment
Legal Capacity at Age 18: Although the age of majority has been revised, an 18‑year‑old in the UAE still faces certain legal limitations. For example, they are not considered fully competent to execute a Power of Attorney or sign specific legal documents independently. In such cases, a guardian may still be required to sign contracts or POAs on their behalf. Nevertheless, there are several business-related activities that individuals aged 18 can carry out on their own without needing guardian approval.
Autonomy for Individuals Aged 18 to 21: Those who are at least 18 but have not yet reached the UAE’s official age of majority (21) enjoy increased independence in certain areas.
- Opening Bank Accounts: Individuals aged 18 can open and operate their own bank accounts without guardian consent, open accounts, apply for credit (subject to bank policy) and enter into financing agreements
- Company Formation: They may establish a company in their own name without requiring approval from a guardian.
- Employment: Employers may issue standard employment contracts to 18-year-olds without the restrictions previously applied to minors.
- Real Estate: Individuals aged 18 years and above can independently sign tenancy contracts, buy or sell property or engage in real estate related commercial activities.
Business Activities for Individuals Aged 15 to 18: Minors between 15 and 18 years old may engage in commercial activities, but only with certain approvals depending on the nature of the transaction. For example:
- Bank Accounts: Operating a bank account requires the guardian’s consent and signature.
- Employment: A minor may work only with the guardian’s approval.
- Disposal of Real Property: If a minor owns real estate, any sale or transfer typically requires court authorization.
- Legal Basis: Article 18 of the Commercial Transactions Law permits minors aged 15 and above to engage in trade, subject to regulations issued by Cabinet resolution upon the recommendation of the Minister of Economy.
Most international commercial systems recognise 18 as the age of majority. This change simplifies cross border transactions, builds investor confidence and makes UAE more globally competitive. While individuals aged 18 and above can legally own and manage businesses, they still face certain restrictions, particularly when signing contracts or other legal documents. Understanding these requirements and the approvals involved is essential for young business owners to operate successfully within UAE’s legal framework.
Our team, Ayesha Al Dhaheri Advocates and Legal Consultants, provides professional legal advice on Real Estate and commercial company matters and the issues arising out of the commercial transactions. Our firm is ready to provide clear guidance and professional legal support.