UAE Companies Law Overhaul: Aligning to Global Standards

On 1 October 2025, the UAE issued Federal Decree-Law No. 20 of 2025, introducing significant amendments to the mainland Commercial Companies Law (CCL). These amendments will take effect on 1 January 2026, with companies granted a six-month transition period to update constitutional documents and governance frameworks. Full compliance is expected by 30 June 2026. These changes aim to strengthen the UAE’s position as an attractive and competitive jurisdiction for both domestic and foreign investors.

Affirming Legal Forms and Free-Zone Companies’ UAE-National Status

All companies (whether mainland or free-zone) are regarded as UAE-national companies for CCL purposes. Any arrangement that does not adopt one of the legal forms set out under the CCL is considered void, and individuals acting for such unrecognised entities may incur personal liability. Businesses must ensure they operate under a recognised legal structure to avoid invalid contracts and personal liability for managers or shareholders, reinforcing legal certainty and investor confidence.

Modernising Shareholding Structures & Investor Protections

Bringing mainland regulations in line with international practice for shareholder exits and takeovers, UAE onshore companies, such as LLCs and private joint-stock companies, can now:

• Issue classes of shares (e.g., preferred shares);
• Adopt drag-along and tag-along rights in their memorandum of association; and
• Accept in-kind contributions at incorporation or during capital increases, subject to independent valuation.

Allowing Re-domiciliation

Companies may now transfer their domicile between onshore authorities, free zones, and financial free zones while preserving their corporate identity, rights, assets, and liabilities. This mobility framework enables businesses to restructure or relocate within the UAE without dissolving or re-incorporating.

Private Placement for Private Joint Stock Companies

The CCL now explicitly permits private joint-stock companies to offer securities via private placement on UAE markets, subject to SCA conditions. This enables private joint-stock companies to raise capital through regulated UAE private placements, facilitating pre-IPO rounds and strategic investor entry without converting to a public company.

Mandating Independent Valuation for In-Kind Contributions

Proper documentation and independent valuation of any in-kind capital contributions is now mandatory under the CCL. This requirement safeguards the investment environment by ensuring transparency and preventing inflated valuations, giving investors confidence that all in-kind contributions are objectively and professionally assessed.

To ensure compliance and leverage the new flexibility introduced by the CCL, companies should:

• review and update constitutional documents (memoranda, articles of association, shareholder agreements);
• consider restructuring or re-registering, including converting legal form or transferring domicile between UAE jurisdictions.

For businesses and investors, these amendments are not merely a compliance requirement as they present an opportunity to optimise corporate structures, enhance shareholder protections, and facilitate strategic growth and investment within a flexible, business-friendly legal environment.