UAE overhauls Commercial Companies Law with new ownership and transfer rules

The UAE Ministry of Economy and Tourism has outlined major amendments to the country’s Commercial Companies Law, introducing far-reaching reforms aimed at strengthening business flexibility, reducing costs and enhancing the country’s investment appeal.

At a media briefing reviewing Federal Decree-Law No. 20 of 2025, which amends Federal Decree-Law No. 32 of 2021, officials confirmed that the changes span 15 articles and introduce a new provision regulating the transfer of a company’s registration in the commercial register while preserving its legal identity.

Abdulla bin Touq Al Marri, Minister of Economy and Tourism said the UAE continues to pursue a long-term, forward-looking vision to build an advanced and pioneering business environment for companies of all sizes, aligned with global best practices and guided by the country’s leadership.

He noted that competitive economic legislation and policies reflect the UAE’s belief in the business sector as a key driver of GDP growth and a partner in sustainable development over the next 50 years.

This approach aligns with the objectives of the “We the UAE 2031 vision,” which seeks to position the UAE as the world’s leading country in developing proactive legislation for new-economy sectors by the next decade.

UAE Commercial Companies Law

Bin Touq said the amendments mark a pivotal milestone underscoring the UAE’s commitment to enhancing corporate flexibility and sustainability, while supporting companies’ ability to keep pace with future trends.

He said the law introduces unprecedented legislative measures at national and regional levels, reinforcing the competitiveness of the UAE’s business environment and its attractiveness to investment.

The amendments provide a comprehensive legal framework to support company growth and long-term sustainability, facilitate access to financing and investment opportunities, and strengthen the ability of businesses to continue operations and expand geographically across free zones and financial free zones.

They also offer greater flexibility in ownership structures and sale and exit processes, while enhancing corporate governance and safeguarding shareholders’ rights.

Bin Touq said:“The amendments grant multiple quotas and share classes in limited liability companies (LLCs) and public and private joint stock companies as a legal right, compared to the previous system where this right was limited to public joint stock companies through a Cabinet decision.

“The UAE is among the first countries in the Middle East to allow multiple quotas classes for LLCs, while many countries restrict this to joint stock companies, particularly public joint stock companies. It enhances flexibility in ownership structures and better regulates the relationship among shareholders.”

The law also allows companies to transfer their registration between emirates, free zones and financial free zones while maintaining their original legal personality, contracts and obligations, without the need for re-establishment or liquidation.

Legal reform

It further permits the conversion of companies between different legal forms, including cooperatives.

Bin Touq said the amendments will enhance alignment between local legislation and the laws of free zones and financial free zones, strengthen integration among licensing authorities, and reduce compliance and operating costs.

These measures are expected to ensure business continuity, support access to markets, financing and investment, and reinforce investor confidence in the national economy.

Company registrations and licences are forecast to rise by 10 to 15 per cent within the first year of implementation.

1.4m companies in UAE

Since the issuance of the Commercial Companies Law in September 2021 through the end of 2025, the UAE has attracted around 760,000 companies, bringing the total number of companies to more than 1.4 million — a growth of 118.7 per cent compared to the end of the first half of 2021.

Around 250,000 new companies were established in 2025 alone, while SMEs owned by UAE nationals grew by 63 per cent over the past five years.

Bin Touq said 2025 was a distinguished year for the economy and tourism, with approximately 37,794 national and international trademarks registered.

Trademark registrations increased by 74 per cent over four years, while 3,595 intellectual property works were registered in 2025, marking overall growth of 124 per cent over the same period.

He added that the tourism sector’s contribution to national GDP rose to 15 per cent last year, up from six per cent in 2021, reaching a total value of AED291bn ($79.3bn), representing growth of nearly 216 per cent over four years.

The UAE economy is expected to grow by 5 per cent in 2025, driven by the continued expansion of non-oil sectors, whose contribution reached 77.5 per cent by the end of the first half of 2025.