Tourism

The Ministry of Economy and Tourism has held a media briefing to review the newly issued Federal Decree-Law No. 20 of 2025, which amends key provisions of the UAE’s Commercial Companies Law and is expected to significantly enhance the competitiveness, flexibility, and attractiveness of the country’s business environment.

The briefing was attended by H.E. Abdulla bin Touq Al Marri, Minister of Economy and Tourism, along with senior officials from the Securities and Commodities Authority (SCA) and representatives of local economic departments across the UAE.

The amendments introduce comprehensive updates across 15 articles of Federal Decree-Law No. 32 of 2021 and include a new provision regulating the transfer of a company’s registration in the commercial register. This allows companies to move between emirates, free zones, and financial free zones without liquidation or re-incorporation, while retaining their legal personality and contractual obligations.

Supporting a future-ready business environment

H.E. Bin Touq said the amendments reflect the UAE’s long-term, forward-looking vision to develop a world-class business ecosystem aligned with global best practices. He noted that competitive legislation and flexible economic policies remain central to the country’s strategy to drive GDP growth and position the private sector as a key partner in sustainable development.

He added that the reforms support the objectives of the “We the UAE 2031” vision, which aims to establish the UAE as a global leader in proactive legislation for new economy sectors.

Greater flexibility for companies and investors

According to the Minister, the amended law introduces unprecedented legislative measures that enhance ownership flexibility, corporate governance, and shareholder protection. Companies will benefit from clearer frameworks for financing, investment, expansion, and exit strategies, as well as improved access to capital and markets across the UAE.

One of the most significant changes is granting limited liability companies (LLCs), as well as public and private joint stock companies, the legal right to issue multiple classes of quotas or shares. This reform places the UAE among the first countries in the Middle East to allow such flexibility for LLCs, a feature previously limited to public joint stock companies.

The amendments also reduce the lock-up period for private joint stock companies from two years to one year, with scope for further reduction or exemption by ministerial decision, thereby improving liquidity and investment appeal.

Easier business mobility and legal continuity

The new law allows companies to transfer their commercial registration between emirates and between free zones, financial free zones, and the mainland without losing their legal identity. This change enhances business continuity, reduces compliance costs, and enables companies to expand geographically with greater ease.

Companies established in free zones and financial free zones will also be permitted to operate in the mainland through branches or representative offices, supporting better utilisation of existing investments.

New legal forms and governance enhancements

The amendments introduce a new legal form, the “non-profit commercial company”, designed to support social impact initiatives, innovation, research and development, and digital education and health platforms. These entities will reinvest profits into achieving their objectives rather than distributing dividends, under a regulatory framework to be defined by Cabinet decision.

In addition, the law strengthens corporate governance by addressing administrative gaps, regulating forced sale mechanisms such as “drag along” and “tag along” rights, and clarifying procedures for share transfers in cases such as inheritance or shareholder exit.

Strong economic indicators

H.E. Bin Touq highlighted that since the Commercial Companies Law came into force in September 2021, around 760,000 companies have been established in the UAE, bringing the total number to more than 1.4 million — a growth of nearly 119 per cent compared to mid-2021. Around 250,000 new companies were registered in 2025 alone.

He also noted strong growth in trademarks, intellectual property registrations, tourism contribution to GDP, and non-oil sector expansion. The UAE economy is expected to grow by around five per cent in 2025, driven primarily by non-oil activities.

Strengthening confidence in the national economy

The Ministry said the amendments will improve legislative alignment between mainland and free zone regulations, reinforce the UAE identity of companies, and boost investor confidence. By offering modern financing tools, flexible ownership structures, and seamless business mobility, the updated law is expected to support sustainable economic growth, job creation, and long-term competitiveness.

• Tags
• #Business
• #Magazine
• #Lifestyle