UAE issues major changes to Commercial Companies Law

The UAE has introduced sweeping changes to its Commercial Companies Law to allow new share structures, private-market fundraising and easier relocation of businesses across emirates and free zones under a federal decree issued this week.

The amendments aim to modernise the country’s corporate legal framework, expand investor options and update ownership and financing structures as part of a broader push to strengthen the UAE’s position as a leading global investment destination.

One of the most significant changes is the introduction of a new legal form, the non-profit company. Under the new framework, these entities will reinvest net profits into their stated objectives rather than distribute them to shareholders, creating a clearer structure for social and development-focused organisations to operate within a regulated corporate environment.

New rules empower UAE businesses

The decree also introduces greater flexibility in how companies structure their capital. Businesses will now be able to issue multiple categories of shares or ownership stakes carrying different rights. These may include varying levels of voting power, profit distribution and priority in redemption or liquidation, as defined in a company’s articles of incorporation or bylaws. The move strengthens corporate governance options and expands tools available to both founders and investors.

On the financing front, private joint-stock companies will be permitted to offer their securities for private subscription on a national financial market, subject to regulations issued by the relevant authorities. This creates a new fundraising pathway without requiring firms to convert into public joint-stock companies.

The amendments also introduce clearer rules for the relocation of companies across the seven emirates and between mainland jurisdictions and financial free zones. Businesses will be able to transfer their registration while maintaining their legal personality, with defined procedures designed to ease commercial mobility, reduce disputes and protect the rights of minority shareholders.

To support continuity and shareholder protection, the decree formalises a range of modern contractual mechanisms for managing shares and ownership. These include tag-along and drag-along rights, as well as regulated procedures for the transfer of shares in the event of the death of a partner or shareholder.

Stricter valuation standards have also been introduced for in-kind contributions to company capital. The law sets out controls for accrediting appraisers and valuing non-cash shares to ensure transparency, fairness and investor protection.

The federal decree forms part of the UAE’s wider legislative overhaul aimed at creating a more flexible and competitive corporate environment aligned with international business practices.