Most business owners in Dubai spend years building their company and almost no time deciding what happens to it after them. It is an uncomfortable subject, so people push it aside. The problem is that the law does not wait for anyone to feel ready. If an owner passes away without a plan, bank accounts can be frozen, trade licences can stall, and family members may find themselves negotiating with courts instead of running the business.

That is exactly what succession planning in Dubai is designed to prevent. Done properly, it decides in advance who inherits your assets, who takes over your company, and how the handover happens – so your family deals with grief, not paperwork.

This guide explains how business succession planning works in Dubai, the legal tools available, and the mistakes that quietly destroy family businesses in their second generation.

What Is Succession Planning?

Succession planning is the process of preparing your assets and your business for transfer to the next generation or to chosen successors. It covers two connected areas:

Personal succession deals with what you own – property, bank accounts, investments, and shares in companies. It answers the question: who inherits, and in what proportion?

Business succession planning deals with how the company itself continues. It answers a harder question: who runs it, who owns it, and how does the business survive the transition without losing clients, staff, or direction?

Many owners prepare a will and assume the job is done. In reality, a will handles the ownership question but says nothing about management, governance, or what happens if heirs disagree. A complete plan addresses both.

Why Succession Planning Matters More in Dubai

Dubai has one feature that makes planning urgent rather than optional: the default legal position when someone dies without a registered will.

For Muslims, inheritance follows Sharia principles, which prescribe fixed shares for specific relatives. For non-Muslims, the UAE introduced a civil framework under Federal Decree-Law No. 41 of 2022 on Civil Personal Status, which allows succession outside Sharia rules. However, without a properly registered will, families still face court procedures, delays, and outcomes that may not match what the deceased actually wanted.

There are practical consequences too. When an account holder dies, UAE banks typically freeze personal accounts until the court issues a succession order. If the business depends on that account for salaries or supplier payments, operations can stop within weeks. Powers of attorney also end on death, so a manager who ran everything on the owner’s behalf loses authority overnight.

Family businesses make up the large majority of private companies in the UAE, and the region is now entering its biggest generational wealth transfer. The businesses that survive this shift will be the ones that planned for it.

The Main Succession Planning Tools in Dubai

1. A Registered Will

A will is the foundation of any plan. In Dubai, non-Muslim residents and investors have several registration routes:

DIFC Wills Service Centre – operates under a common law framework in English, with probate handled through DIFC Courts. It also offers a dedicated will type for business owners covering company shares.
Dubai Courts – the onshore route, with documents in Arabic.
Abu Dhabi Judicial Department (ADJD) – an alternative registry that can cover assets across the emirates.

A registered will lets you name beneficiaries, appoint an executor, and – importantly for parents – nominate guardians for minor children. Without those provisions, a court decides these matters instead of you.

One point owners often miss: a will only takes effect after death and only distributes ownership. It does not manage the business during a long illness, and it cannot stop three heirs with equal shares from deadlocking every board decision. That is where structures come in.

2. Foundations

A foundation is a legal entity that owns assets in its own name. You transfer company shares, property, or investments into the foundation, and it holds them according to rules you write in advance – who benefits, who governs, and how decisions are made across generations.

Dubai offers well-established foundation regimes, most notably in the DIFC under its Foundations Law of 2018, alongside options in other UAE jurisdictions. Foundations have become popular with business families for a simple reason: the foundation does not die. When the founder passes away, nothing needs to be re-registered, probated, or frozen. The business keeps running under the governance rules already in place.

Foundations suit owners with operating companies, multiple properties, or heirs in different countries. For a family with one apartment and a savings account, a will alone is usually enough – a foundation would be unnecessary cost and administration.

3. Shareholder Agreements and Company Structuring

If your business has partners, succession planning cannot be a private decision. A shareholder agreement should spell out what happens to a deceased partner’s shares: whether the surviving partners can buy them, at what valuation, and whether heirs receive money or ownership. Without this, a partner’s death can hand voting power to family members who have never set foot in the office.

Reviewing the company’s legal structure is part of the same exercise. How shares are held, whether a holding entity makes sense, and how the trade licence is structured all affect how smoothly a transfer happens. Advisory firms such as Takween Advisory work with owners on exactly this intersection – aligning the corporate setup with the succession outcome the family actually wants, rather than leaving the two to collide later.

4. Governance and the Human Side

Legal documents solve the ownership problem. They do not solve the leadership problem.

Business succession planning also means deciding – honestly – who is capable of running the company. Sometimes that is a son or daughter. Sometimes it is a professional manager while the family retains ownership. Strong plans include a transition period where the successor works inside the business, learns supplier relationships, and earns credibility with staff before the handover becomes official.

Families that skip this step often discover that the second generation inherited the shares but not the trust of the people who make the business work.

Common Succession Planning Mistakes in Dubai

Waiting for the “right time.” There is no right time. A plan written at 45 can be updated for decades; a plan never written cannot help anyone.

Registering a will abroad and assuming it covers Dubai. Foreign wills can face recognition hurdles for UAE assets, particularly real estate. UAE-situated assets need a plan that works under UAE procedures.

Splitting the business equally “to be fair.” Equal shares feel fair and function terribly. Three equal owners with different visions is a recipe for deadlock. Fairness can be achieved through value – one heir gets the business, others get property or financial assets – without fragmenting control.

Ignoring the operating documents. A perfect will paired with an outdated Memorandum of Association still produces disputes. All the documents have to tell the same story.

Never updating the plan. Marriages, divorces, new children, sold assets, new companies – each one can make an old will misleading. Review the plan after every major life or business event.

How to Start: A Practical Sequence

List everything. Companies, shares, property, accounts, and where each asset legally sits.
Decide outcomes. Who should own what, and who should run the business.
Choose the tools. A registered will as the baseline; a foundation or restructured holding if the estate is complex.
Fix the company documents. Shareholder agreements and constitutional documents aligned with the plan.
Prepare the successor. Involve them early and formally.
Review regularly. Treat the plan as a living document, not a filed one.

Specialists like Takween Advisory typically begin with this kind of structured review, because the right instrument depends entirely on what you own and what you want to happen – not on what is fashionable.

Final Thoughts

Dubai Succession planning is not about expecting the worst. It is about making sure the business you built keeps working for the people you built it for. The legal tools – registered wills, foundations, shareholder agreements – are well developed and accessible. What most families lack is not options; it is the decision to start.

The best plan is the one that exists before it is needed.

Disclaimer: This article is for general information only and does not constitute legal, tax, or financial advice. Succession and inheritance outcomes depend on individual circumstances, religion, nationality, and asset location. Always consult a qualified professional before making succession decisions. For official guidance, refer to UAE government resources.

Frequently Asked Questions

What is succession planning in Dubai?

It is the process of legally arranging who inherits your assets and who takes over your business after your death or incapacity. In Dubai this typically involves a registered will, and for business owners, additional structures such as foundations or shareholder agreements.

What happens if a business owner dies in Dubai without a will?

Default succession rules apply and courts oversee distribution. Bank accounts are generally frozen until a succession order is issued, powers of attorney lapse, and company shares pass according to legal defaults rather than the owner’s wishes – which can disrupt or paralyse the business.

Can non-Muslims choose how their assets are distributed in Dubai?

Yes. Non-Muslims can register wills through routes such as the DIFC Wills Service Centre, Dubai Courts, or the Abu Dhabi Judicial Department, and Federal Decree-Law No. 41 of 2022 provides a civil framework for non-Muslim personal status matters.

What is the difference between a will and a foundation?

A will distributes assets after death and goes through probate. A foundation is a living legal entity that owns assets now and continues operating after the founder’s death, avoiding freezes and re-registration. Complex family businesses often use both together.

When should business succession planning start?

As soon as the business has real value or the owner has dependants. Early planning allows successors to be trained, documents to be aligned, and the plan to be refined over time – none of which is possible if planning starts during a crisis.