The UAE’s recent Civil Transactions overhaul (Federal DecreeLaw No. 50 of 2022) makes a single, simple but significant change to one of the most fundamental civil law concepts: the age of majority. Where the old Civil Transactions Law tied majority to completion of 21 lunar years, the 2022 DecreeLaw fixes majority at 18 Gregorian years. That change sounds small but has wide practical and legal consequences for individuals, businesses and courts.
Introduction & Key Change
Under the old law (Federal Law No. 5/1985 – On the Civil Transactions Law of the United Arab Emirates State – Civil Code [Lexis® Middle East]) the 21year benchmark was measured in lunar years, while many other UAE laws and international standards use Gregorian years. This dual system caused calculation of disputes, inconsistent determination of capacity across different laws, and unnecessary litigation. Moving to 18 Gregorian years aligns the civil threshold with modern legal practice and other UAE statutes that already use 18 as a benchmark.
Why It Matters
- Under Federal Law No. 5 of 1985: Full civil capacity (majority) was generally reached on completion of 21 lunar years, subject to mental competence and specific judicial restrictions. Until that threshold, guardianship rules and doctrines of discernment governed many transactions by minors.
- Limited legal capacity
- Requiring guardian for major financial and civil decisions.
- Under Federal Decree-Law No. 50/2022 – On the Promulgation of the Commercial Transactions Law – Commercial Code [Lexis® Middle East]: Majority is now fixed at 18 Gregorian years. The law presumes full civil capacity at that age unless the person has been judicially restricted or is otherwise legally incapacitated.
- Full legal capacity for contracts,
- Full legal capacity over asset management
- Full legal capacity for business and litigation independently
Practical Implications
- Persons aged 18 and over can independently: enter into employment and commercial contracts, open and operate bank accounts, own and dispose of property, and be fully liable for contractual and tort obligations.
- Young people who previously needed guardian permission for certain transactions will now act on their own authority for simplifying business startups, employment contracts and property dealings.
- Administrative simplification: Registries, banks, employers and courts will no longer have to reconcile lunar vs. Gregorian dates when checking capacity. This reduces paperwork, speeds decision making, and lowers compliance costs.
Practical consequences
For businesses and institutions
- KYC and onboarding: Financial institutions and service providers must update onboarding checks, forms and system validations to use “18 years (Gregorian)” as the age threshold. This affects account openings, loan approvals and consent processes.
- Contract drafting and enforcement: Standard templates that previously referenced “21 lunar years” should be updated to avoid ambiguity and litigation. Commercial counterparties should adjust representations and warranties on capacity to the new age standard.
- HR and employment: Employers should align hiring policies and benefits eligibility to reflect that 18yearolds are fully capable of binding employment contracts.
For courts and pending cases
- Transitional issues: Cases and administrative acts begun before the 2022 Law entered into force may raise questions of which age standard applies. Practitioners should check the DecreeLaw’s transitional provisions and, where unclear, prepare arguments based on whether the new rule is more favourable to affected parties.
- Evidence and disputes: Courts will likely see fewer calendarcalculation disputes (lunar vs. Gregorian), but may face new questions about retroactivity, preexisting guardianship orders and the application of older decisions.
- Unifies civil, labour and juvenile laws, simplifying responsibilities and reducing disputes.
Implementation Steps
- Replace all references in forms, systems and contracts from “21 lunar years” to “18 years (Gregorian calendar).”
- Update KYC procedures and system validation logic to accept Gregorian birth dates and calculate the 18year threshold.
- Train clientfacing staff to accept appropriate proof of age (official birth certificates or passport dates in Gregorian format) and to escalate cases where judicial authorisation may still be required for 15–17-year-olds.
- Review pending litigation, guardianship orders and registrations: determine whether the new age affects standing, capacity or the need for court orders; prepare transitional arguments where relevant.
- Prepare a short notice to clients, counterparties and regulators explaining the change and the operational steps being taken.
Comparative & Legal Context
- Brings the UAE’s civil capacity framework in line with international standards adopted in the UK, EU, Singapore and most common-law and civil-law jurisdictions, where majority is fixed at 18 years.
- Reduces uncertainty in cross-border transactions, particularly in assessing contractual capacity where foreign counterparties rely on an 18-year benchmark.
- Minimises conflicts arising from differing calendar systems and age thresholds in international dealings.
- Reinforces the UAE’s positioning as a modern, predictable and globally compatible commercial and legal jurisdiction.
Impact on Guardianship and Family Law
- Individuals aged 18 and above now enjoy full civil capacity to act independently in commercial and civil matters.
- Courts may still impose restrictions in cases of mental incapacity or other legal disabilities.
- Personal status and family matters, such as parental duties, are still governed by separate legal frame works.
- The reform narrows guardianship in civil and commercial contexts while preserving protective oversight where legally justified.
Effect on Existing Contracts and Transactions
- The new 18-year threshold reduces the risk of capacity-based challenges for parties previously aged 18–21 under the old law.
- Individuals aged 18 and above are now presumed to have full civil capacity to enter into contracts and manage legal obligations independently.
- The Decree Law does not automatically reopen or invalidate existing contracts executed under the previous law. Businesses and counterparties should review legacy agreements to ensure that age and capacity representations align with the new standard.
- The reform simplifies contractual dealings, reduces potential disputes, and provides greater certainty for parties, particularly in banking, real estate, and corporate governance.
Regulatory Specific Implications
- Banking & Finance: Institutions must reassess eligibility for account openings, credit facilities, and guarantees for individuals aged 18 and above.
- Real Estate: Individuals aged 18 can independently enter into sale and purchase agreements and grant powers of attorney.
- Corporate & Startups: Younger founders can act as shareholders or directors without additional authorizations, subject to sector-specific regulatory requirements.
- Overall, businesses and institutions need to update policies, forms, and internal procedures to align with the new age threshold.
At 18, a person is now presumed to have full civil capacity to conclude contracts, manage assets and exercise civil rights without guardianship style supervision. That change supports financial inclusion and entrepreneurial activity among younger adults.
Conclusion
The shift from 21 lunar years to 18 Gregorian years for the age of majority under the UAE’s Civil Transactions Law is more than a procedural update; it is a fundamental modernization of the legal framework. By harmonizing the UAE’s civil capacity rules with international standards and eliminating calendar-related complexities, the reform enhances legal certainty, promotes financial and entrepreneurial inclusion for young adults, and reduces administrative burdens across sectors.
This is modernized legal framework to support a more dynamic, future-ready society. For businesses, legal practitioners, and institutions, the priority is to promptly update internal policies, contractual templates, and compliance systems to reflect the new 18-year Gregorian threshold. While transitional matters may require careful navigation, the long-term benefits, greater clarity, reduced litigation risk, and a more globally aligned commercial environment, are clear. This change reaffirms the UAE’s commitment to a progressive, predictable, and commercially responsive legal system.
