UAE Amends Commercial Companies Law

The UAE government has issued Federal Decree-Law No. 20 of 2025, introducing significant amendments to the CCL (Commercial Companies Law). Effective from 15.11.2025, these changes represent the most comprehensive update to UAE corporate legislation since 2021.

Non-Profit Companies

The decree introduces a new legal form: non-profit companies. These entities must reinvest all net profits to achieve their stated objectives rather than distributing them to shareholders. This provides a purpose-built vehicle for social, developmental, and philanthropic organisations, with detailed governance rules to be issued at the Cabinet level.

Multi-Class Share Structures

Companies can now issue different categories of shares carrying distinct rights, including varying levels of voting power, profit distribution, and priority in redemption or liquidation. This flexibility benefits founders seeking to retain control while bringing in investors, and supports employee incentive programmes and successive funding rounds.

Private Market Fundraising

Private joint-stock companies can now offer securities through private subscription on national financial markets, subject to SCA (Securities and Commodities Authority) regulations. This creates a new capital-raising pathway without requiring conversion to a public company.

Easier Company Relocation

The decree introduces clear re-domiciliation rules. Companies can now transfer their registration between different Emirates, between mainland and free zones, or between different free zones, while maintaining their legal personality and full history. This requires shareholder approval, registry compatibility, and relevant regulatory sign-offs.

Tag-Along and Drag-Along Rights

These mechanisms are now formally recognised for LLCs (Limited Liability Companies) and private joint-stock companies. Drag-along rights allow majority shareholders to compel minorities to join in a sale. Tag-along rights protect minorities by letting them participate on the same terms. Both can now be included directly in a company’s MoA (Memorandum of Association).

Succession Planning

Companies can include provisions governing the shares of deceased shareholders, including priority rights for remaining owners to purchase those shares. Disputes over valuation can be referred to court, providing greater certainty for business continuity.

Free Zone Clarifications

Free zone companies are now formally recognised as carrying UAE nationality. The amendment now makes it explicit: a free zone company is a UAE company. They remain governed by their own frameworks within their zones, but must comply with the CCL when conducting mainland activities through branches or representative offices.