The UAE has introduced a wide-ranging amendment to its Commercial Companies Law, marking a significant step in modernising the country’s corporate landscape and reinforcing its position as a leading global investment hub.
The Federal Decree-Law updates several provisions with the goal of enhancing competitiveness, improving the business environment, and aligning local regulations with international economic developments. Officials said the changes offer more flexibility for investors, strengthen corporate governance, and expand financing options.
A key element of the amendment is the introduction of the non-profit company, a new corporate structure that reinvests earnings to advance its stated purpose rather than distribute profits to shareholders. The move aims to support social and developmental sectors through stronger institutional frameworks.
The law also expands capital structure options by allowing companies to issue multiple classes of shares and stakes, each with defined rights related to voting, profit distribution, redemption, and liquidation. This provides new tools for private capital investors and reflects global best practices.
In financing, private joint-stock companies may now offer securities for private subscription on national financial markets, subject to regulatory approval. This creates fresh fundraising opportunities without requiring conversion into public companies.
The amendment additionally sets clear procedures for relocating company registrations between emirates and financial free zones while preserving legal identity. Authorities said this will enhance business mobility, reduce disputes, and protect minority shareholders.
Further updates include modern mechanisms for share transactions, such as tag-along and drag-along provisions, along with strengthened standards for valuing in-kind shares to ensure fairness and transparency.
The government described the decree as a strategic milestone in building a flexible and robust legislative environment that supports innovation, investment, and long-term economic growth.
News Source: Emirates News Agency
