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The UAE has introduced significant updates to its Commercial Companies Law, marking a strategic shift in how businesses can be structured, transferred, and governed across the country. These reforms are not cosmetic, they directly impact company ownership, expansion flexibility, investor confidence, and long-term business continuity.
While there has been considerable discussion in the market around these changes, most explanations either oversimplify the updates or rely heavily on legal jargons, making it difficult for business owners and founders to understand what has actually changed and how it affects them in practice.
This article breaks down the latest amendments in clear, practical terms—without legal jargon, so you can understand the implications, evaluate opportunities, and make informed decisions for your company with confidence and clarity.
What are the key updates in commercial company laws?
- Non-Profit Company Now Falls Under Main Law: For the first time UAE government recognises non profit organizations as legitimate companies under main law. Earlier, non profit companies existed in UAE but required special approvals, or indirect setups under business law, however with this new change in the regulation, non profit companies now comply with the main law. Under this, non-profit organizations
- must reinvest their revenues
- must not distribute their profits to shareholder and partners
- given all the legal protection a commercial company receives
More details on its operations and laws will be released by the UAE’s cabinet.
- Cabinet allows multiple quota classes for LLC & PJSCs now:
Earlier only public joint stock companies (very large companies, often listed) were clearly allowed to have different types of shares, and only with the permission of the Cabinet. However, the updates in the law bring a lot more flexibility.
Now, all the Legal Liability Companies (LLCs), along with Public & Private Joint Stock companies are allowed to have multiple quota classes and flexible ownership structures in the company. This law reform will offer greater flexibility and clarity in ownership structure, sale, and most importantly, shareholder exit strategy.
- Easy Registration Transfer between the zone and the emirates:
Perhaps this is the most transformative change introduced under the new law: the establishment of a clear framework that allows companies to re-domicile.
Previously, when a company wanted to shift its registration, it had to go through a painstaking and costly process—shutting down the business, cancelling its licence, and re-incorporating in another emirate, free zone, or financial free zone. This not only increased operational costs but often disrupted business continuity and slowed down growth and expansion plans.
Under the new law, companies can now move seamlessly:
- from one emirate to another
- from mainland to a free zone
- from a free zone to mainland
- between different free zones, including financial free zones
Most importantly, this can be done without losing the company’s legal identity, contractual relationships, or corporate history, allowing businesses to restructure and scale without interruption.These reforms are set to improve alignment between federal legislation and the regulations of free zones and financial free zones, strengthen coordination among licensing authorities, and significantly reduce compliance and operational burdens.
According to Bin Touq, UAE’s Minister of Economy & Tourism…
Altogether, these measures are expected to support business continuity, improve access to markets, financing, and investment, and reinforce investor confidence in the national economy. As a result, company registrations and licences are also expected to increase by 10 to 15 per cent within the first year of implementation.
Increased business activity and demand are also likely to place upward pressure on licensing, real estate, and operational costs over time, particularly in high-demand emirates and business hubs.
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