The UAE’s New Civil Transactions Law Redefines Legal Capacity and Youth Empowerment

The UAE continues to demonstrate its commitment to modernising its legislative framework to support social development, economic growth, and legal certainty. One of the most significant reforms introduced under the new Federal Decree-Law No. 25 of 2025, Promulgating the Civil Transactions Law, is the reduction of the age of majority from 21 to 18 Gregorian years.

This important reform is expressly reflected in Article 84 of the new Civil Transactions Law, which provides that every person who reaches the age of majority enjoys mental capacity, and is not subject to guardianship or interdiction, shall have full legal capacity to exercise their civil rights. The same article further confirms that a person reaches the age of majority upon completing 18 Gregorian years.

The new law will come into force on 1 June 2026, marking a significant development in the UAE’s civil law framework and in the way legal capacity is recognised for young adults.

This reform is not merely a technical amendment to the law. It reflects the wise and forward-looking vision of the UAE’s great leadership, which has consistently placed people at the heart of national development. It is also a clear indication of the leadership’s confidence in the youth of the UAE, who represent one of the most important pillars of society and a driving force behind the country’s future growth.

By recognising full civil capacity at the age of 18, the UAE is empowering young adults to participate more actively in civil, commercial, and economic life. This reform acknowledges the evolving role of youth in society and supports their ability to make decisions, assume responsibilities, and contribute meaningfully to the nation’s continued success

From a practical perspective, this development is expected to have wide-ranging implications.

First, individuals who reach the age of 18 will, in principle, be able to enter into binding civil transactions, manage their personal affairs, and assume civil obligations independently, subject always to any specific legal restrictions or sector-specific requirements. This is particularly important in relation to contracts, asset management, banking arrangements, commercial dealings, and civil liability.

Second, the reform may encourage greater youth participation in business and entrepreneurship. The new legal framework supports young individuals who wish to establish businesses, enter into commercial relationships, manage assets, or participate in investment opportunities at an earlier stage in their adult lives.

Third, businesses, financial institutions, educational institutions, real estate stakeholders, and professional service providers will need to carefully review their internal policies, forms, terms and conditions, onboarding processes, and contractual documentation. Any process that previously treated individuals under 21 as lacking full civil capacity may need to be reassessed in light of the new legal position once the law comes into force.

Fourth, the reform will also affect dispute resolution and litigation. Questions of contractual capacity often arise in civil and commercial disputes. The new position under Article 84 provides greater clarity in assessing whether a party had the legal capacity to contract, assume obligations, or be held civilly liable.

As the new Civil Transactions Law comes into force on 1 June 2026, individuals, companies, legal practitioners, banks, real estate professionals, and investors should begin assessing how this change may affect their contracts, compliance procedures, and risk management practices.

From 21 to 18, the UAE is not only redefining legal capacity, but also opening a wider door to responsibility, opportunity, and progress.