The UAE has introduced significant updates to the Commercial Companies Law UAE, marking a major step toward a more flexible, investment-friendly, and future-ready business environment. The amendments, issued under Federal Decree-Law No. 20 of 2025, update provisions of the 2021 Commercial Companies Law and introduce new mechanisms that simplify company operations, ownership structures, and geographic expansion.
The changes were outlined during a media briefing held by the Ministry of Economy and Tourism, attended by senior officials from federal and local economic authorities.
A Strategic Update to the Commercial Companies Law UAE
The revised Commercial Companies Law UAE reflects the country’s long-term economic vision to support businesses of all sizes — from startups to multinational companies. The amendments align local regulations with international best practices and support the objectives of the We the UAE 2031 strategy, which aims to strengthen the country’s position as a global business hub.
The focus of the updates is clear: reduce regulatory friction, improve corporate governance, and enhance the UAE’s attractiveness to global investors.
Easier Company Transfers Across the UAE
One of the most impactful amendments allows companies to transfer their commercial registration between emirates, free zones, financial free zones, and the mainland without liquidation or re-establishment. Importantly, companies retain their legal identity, contracts, and obligations during the transfer.
Under the previous framework, relocating a company often meant shutting down and re-incorporating. The updated Commercial Companies Law UAE removes this barrier, significantly improving business mobility and continuity.
Greater Flexibility in Ownership and Share Structures
The amendments grant limited liability companies (LLCs) the legal right to issue multiple classes of quotas, while public and private joint stock companies can issue multiple classes of shares. This flexibility allows companies to better structure ownership, voting rights, dividend distribution, and exit strategies.
The law also formalizes shareholder protection mechanisms such as drag-along and tag-along rights, ensuring smoother ownership transitions and safeguarding minority shareholders.
Support for Investment, Financing, and Growth
By allowing private placements for private joint stock companies and reducing lock-up periods, the Commercial Companies Law UAE improves access to capital and financing. The lock-up period for private joint stock companies has been reduced from two years to one year, with additional flexibility available through ministerial decisions.
New standards for valuing in-kind capital contributions have also been introduced, increasing transparency and consistency across company structures.
Strong Business Growth in the UAE
Since the introduction of the Commercial Companies Law in 2021, the UAE has seen strong business growth. By the end of 2025, more than 1.4 million companies were registered nationwide, with approximately 250,000 new companies established in 2025 alone.
Non-oil sectors now account for more than 77% of GDP, while tourism contributes around 15% of national GDP, highlighting the success of diversification policies supported by flexible legislation.
Introduction of Non-Profit Commercial Companies
The updated Commercial Companies Law UAE also introduces a new legal structure: the non-profit commercial company. These entities reinvest profits into social, educational, research, and innovation-driven projects rather than distributing them to shareholders, supporting sustainable economic and social development.
Looking Ahead
The latest amendments to the Commercial Companies Law UAE reinforce the country’s reputation as a forward-looking, business-friendly jurisdiction. By simplifying company transfers, expanding ownership options, and strengthening investor protections, the UAE is setting the foundation for continued growth, innovation, and global competitiveness.
