Corporate Law
Corporate law in UAE.
UAE corporate law is simple and clear. It clarifies how companies are founded, governed and expanded, so business owners and investors can know their rights and obligations. It makes the UAE a very attractive place to set up a business locally and internationally. Federal Decree‑Law No. 32 of 2021 on Commercial Companies (CCL) is the main governing corporate law in the UAE. It was recently amended by Federal Decree‑Law No. 20 of 2025 to keep the system up to date with best practices worldwide.This guide makes UAE corporate law easy to understand. It covers the key laws, types of companies, regulations on establishing and managing a business, foreign ownership, governance, mergers and other key business matters.
The Main Legal Framework for Corporate Law in UAE
- Federal Decree-Law No. 32 of 2021 on Commercial Companies (the “CCL”)
The Commercial Companies law applies to most mainland companies. The CCL replaced older regulations in 2022 with the following objectives:
- To facilitate doing business
- To protect shareholders and partners
- To promote foreign investors.
To encourage responsible business practices and social responsibility. It applies to:
- Companies created in the UAE.
- Foreign companies working in the UAE.
- Branches of free-zone companies that operate on the mainland.
Free-zone companies follow their own rules inside the free zone, but any work they do onshore must follow the CCL.
- Federal Decree-Law No. 19 of 2018 on Foreign Direct Investment (FDI)
Another key rule is Federal Decree-Law No. 19 of 2018 on Foreign Direct Investment (FDI) – which permits foreign investors to own 100% of the company in most sectors on the emirate’s “positive list”, published by each emirate’s Department of Economic Development. Some strategic sectors (Activities with a Strategic Impact) may still require local partners or other approvals.
Other rules are found in the Civil Code, competition law (Federal Decree-Law No. 36 of 2023) and licensing authorities at the emirate level, such as by Dubai DED or Abu Dhabi DED.
Common Types of Companies Under UAE Corporate Law
The business needs to decide on the legal form or it can be declared null and void. There are five main forms:
- General Partnership: Two or more partners are responsible for all the debts. Good for small family firms.
- Limited Partnership: Only some of the partners are responsible for management and bear the full risk. Other partners risk only their contribution.
- Limited Liability Company (LLC): The most common choice. Liability is limited to the partners’ (1-50 or, in case of one-person company (OPC), the single partner’s) contribution. Usually no minimum capital. Good choice for small-medium companies.
- Private joint stock company (PrJSC) – Capital divided into shares. Minimum 2 shareholders (or one legal person for OPC). Minimum capital is generally AED 5 million (subject to specific rules). Appropriate for larger Private entities.
- Public joint stock company (PJSC) – Shares are publicly traded. Minimum capital AED 30 million required to obtain approval from the Securities and Commodities Authority (SCA). Appropriate for large listed companies.
As soon as a UAE company has been registered under the company law, it is called a UAE company. The MOA must be written in Arabic and attested by a Notary public. The MoA of a Mainland Company must be registered with the relevant Local Licensing Authority and when necessary with the Ministry of Economy.
Some of the Key Provisions under corporate Law in UAE
- Company Formation and Setup:
- To Form a company – prepare the MoA, get it attested, deposit the capital (cash or in-kind assets approved by the Bank), and register.
- It takes a few days to do it once you have the documents. LLCs require the partners’ register and bank confirmation.
- Joint Stock Companies require a founders’ committee, feasibility study, and SCA approval for public offers.
- Capital and Shares
Partners/shareholders contribute cash or assets (valued by approved experts). New 2025 rules allow LLCs to have different classes of shares with different voting, dividend or exit rights. In-kind contributions are easier for LLCs. There is no minimum capital amount for most LLCs – just need enough to do business.
- Management and Daily Operations
- LLC – one or more managers (partners or outsiders) manage the business. If the number of partners exceeds 15, the partners must appoint a supervisory board.
- JSC – a board of directors (3–11 members) makes the decisions. They must do so carefully, in the best interests of the company, and disclose any conflicts.
Partners/Shareholders hold a General Assembly where key decisions such as account closure, profit distribution or amendments are passed. Voting rights generally depend on the number of shares each one holds (as outlined in the charter).
- Shareholder and Partner Rights:
- All shareholders and partners of the company have access to accounts and records.
- Profits divided in proportion to contribution unless otherwise agreed.
- Added drag-along (majority can compel minority to exit) and tag-along (minority can join the sale on same terms) rights. These rights can now be directly incorporated in the MoA / Articles of Association.
- Pre-emption rights enable existing partners to take first refusal if a partner wishes to sell interest.
- Corporate Governance in UAE:
Good governance means clear rules, accurate reporting and audits. Misconduct can result in up to AED 10 million fine for directors and managers. Companies retain books for five years and comply with international accounting standards. Annual audits required for most forms.
Foreign Ownership and Investment in Corporate Law UAE
- Under the new FDI rules, foreign investors can now own 100% of many mainland businesses, including LLCs, PrJSCs, and other legal forms, in thousands of approved activities such as manufacturing, technology, healthcare, education, and logistics.
- Almost all mainland companies no longer require a local sponsor. Full ownership was available in free zones and now it is also available on the mainland.
- Establishment is simple: choose an activity from the approved “positive list”, apply for a licence from the relevant emirate authority and register the company under the CCL.
- Investors may also be eligible for preferential visas and tax benefits in some zones.
Mergers, Acquisitions, and Changes
The CCL has clear provisions on mergers (two companies becoming one), acquisitions, conversions (LLC to JSC, etc.) and divisions. A special resolution (normally 75% vote) is required. Creditors get a notice, minority shareholders are protected.
The amendments in 2025 made conversions and redomiciliation (moving the registration between mainland, free zones and emirates) easier, while retaining the company’s legal personality and contracts.
Why Corporate Law Matters for Everyday Business
Whatever size your business is – from the local shopkeeper to the large multinational – in the UAE, Corporate Law provides framework and security to your company. It will help reduce personal liability, safeguard your capital, and make way for international partners. The regulations are simple, just ensure that you have proper registration, manage it properly and that you keep all records clean.
For the updated information always refer to the official sources like uaelegislation.gov.ae or Ministry of Economy. Laws change on a day-to-day basis, always check with the official rules and regulations or a license agent before you commence the action.
Disclaimer: This information is for general purposes only and does not create any client–attorney relationship. It should not be construed as legal advice. For guidance specific to your situation, please consult a qualified legal professional.
Frequently ask questions (FAQs)
Which law regulates the UAE companies?
Are free zone firms subject to UAE corporate law?
Do the directors have personal liability in the UAE corporate law?
Is there a shareholder agreement in the UAE?
What is UBO compliance?
Is the 100-percent foreign ownership of a UAE company possible?
Liquidation of companies in the UAE is a time-consuming process.
Is arbitration effective in settling corporate disputes?
HHS Lawyers and Legal Consultants corporate Law Services.
Our advice is offered to startups, SMEs, family businesses and multinational corporations in various industries.
The services under corporate law that we provide include:
- Corporate advisory and compliance.
- Formation of company and restructuring.
- Mergers and acquisitions
- Corporate risk management and corporate governance.
- Dir directors and shareholder wrangles.
- Corporate insolvency and winding up
