Toma panorámica del horizonte futurista de Dubái al atardecer, con rascacielos iluminados y líneas abstractas doradas que simbolizan el crecimiento empresarial y los marcos legales.

New UAE Commercial Companies Law 2025: Complete Guide to Key Reforms

In a strategic move that consolidates its position as one of the world’s most dynamic business hubs, the United Arab Emirates has announced a significant modernization of its corporate legal framework. The New UAE Commercial Companies Law, ratified by Federal Decree-Law No. 20 of 2025, introduces far-reaching reforms designed to enhance business flexibility, reduce operating costs, and attract even more international investment. For any entrepreneur or investor considering Dubai as their next destination, understanding these changes is not just an option, but a necessity to maximize the opportunities this vibrant market offers.

This legislative update is a clear manifestation of the country’s long-term vision, aligned with the objectives of the “We the UAE 2031” initiative. The goal is clear: to build a pioneering and adaptable business environment, prepared for the challenges and trends of the future economy. Below, we break down the most important developments and how they directly impact business creation and management in the region.

What Changes with the New UAE Commercial Companies Law?

The reform, which amends 15 key articles of the previous law (Federal Decree-Law No. 32 of 2021), is much more than a mere technical adjustment. It represents a paradigm shift in how companies can structure, operate, and evolve within the Emirati ecosystem. The Ministry of Economy and Tourism has emphasized that these amendments provide a comprehensive legal framework to support the long-term growth and sustainability of companies, facilitating access to financing and strengthening corporate governance.

The focus is on three fundamental pillars:

  • Structural Flexibility: Allowing companies to adapt their capital and ownership structure to their specific needs.
  • Operational Continuity: Facilitating the mobility and transformation of companies without costly interruptions.
  • Investment Attraction: Increasing investor confidence through greater protection of their rights and enhanced transparency.

These legislative changes reinforce the UAE’s competitiveness, positioning it as a global hub that not only offers tax advantages but also a modern and sophisticated regulatory framework, comparable to international best practices.

Key Reforms for Entrepreneurs and Investors

For the international entrepreneur, the practical implications of this new law are enormous. The reforms eliminate historical barriers and open up a range of strategic possibilities that were previously complex or inaccessible. Let’s analyze the most prominent points.

1. Greater Ownership Flexibility: Multiple Classes of Shares for LLCs

Perhaps one of the most revolutionary reforms is the introduction of multiple classes of shares and quotas for Limited Liability Companies (LLCs). Previously, this option was primarily restricted to public joint-stock companies and required a Cabinet decision. Now, it becomes a legal right for LLCs.

What does this mean in practice? It allows founders and partners to create different types of participations with associated distinct rights, such as:

  • Differentiated voting rights: A founder can retain majority voting control with a special class of shares, even if they hold a minority stake in the capital.
  • Distinct economic rights: Classes of shares can be created with different dividend rights, allowing financial investors seeking profitability without involvement in management to be attracted.
  • Liquidation preferences: It is possible to establish a priority order for asset distribution in case of sale or liquidation of the company.

This flexibility is crucial for startups seeking funding rounds, for family businesses planning succession, or for joint ventures where partners have distinct roles and contributions. The UAE thus becomes one of the first countries in the region to offer this structural sophistication for LLCs, a fundamental pillar of the country’s business fabric. If you are thinking about how to set up a company in Dubai and obtain your visa, this new flexibility in capital structure is a primary incentive.

2. Unprecedented Portability: Company Relocation Between Free Zones and Mainland

Another high-impact reform is the new provision regulating the transfer of a company’s registration between different jurisdictions within the UAE (from one emirate to another, from a free zone to ‘mainland’ or vice versa) while preserving its original legal personality. Previously, such a move often required the liquidation of the existing company and the creation of a new one, a costly, lengthy, and administratively complex process that disrupted the continuity of contracts and licenses.

The new law allows companies to relocate their registered office between emirates and free zones without the need for liquidation, keeping their history, contracts, and obligations intact.

This measure offers invaluable strategic agility. A company starting in a free zone to take advantage of its initial benefits can, upon growth, decide to move to the ‘mainland’ to directly access the local market, without losing its legal identity. This drastically reduces compliance and operational costs and ensures business continuity, a key factor for the confidence of clients, suppliers, and investors.

3. Simplification in Conversion and Regulatory Alignment

The new legislation also facilitates the conversion of companies between different legal forms, including transformation into cooperatives. This provides a simpler path for companies to evolve as their needs change. Furthermore, the law seeks greater alignment between the local legislation of the emirates and the regulations of the more than 40 free and financial zones in the country. This harmonization simplifies regulatory compliance for companies operating in multiple jurisdictions within the UAE, strengthening integration among the various licensing authorities.

Economic Impact: Figures Reflecting Confidence

Confidence in the UAE’s business environment was already reflected in impressive figures, and this new law is expected to act as an even greater catalyst. Since the implementation of the 2021 law until the end of 2025, the country has attracted nearly 760,000 new companies, raising the total to over 1.4 million. In 2025 alone, approximately 250,000 new companies were established.

Authorities predict that, thanks to these reforms, the number of business registrations and licenses could increase by 10% to 15% during the first year of implementation. This expected growth is not just a statistic but a testament to market confidence in an ecosystem that combines 0% personal income taxation with an increasingly robust and business-friendly legal framework.

Are You Ready to Seize New Opportunities in Dubai?

The New UAE Commercial Companies Law is not merely an update; it is a direct invitation to entrepreneurs and investors worldwide. It demonstrates an unequivocal commitment to creating an environment where businesses can not only be born but also grow, adapt, and prosper with unprecedented agility. Greater flexibility in ownership structure, the ease of moving and transforming a company, and improved corporate governance are decisive competitive advantages.

Navigating a new legal landscape, however favorable, requires expert knowledge and careful planning. At MyDubaiWay, we specialize in guiding entrepreneurs and investors through every step of the process, ensuring your establishment in Dubai is smooth, efficient, and perfectly aligned with your strategic objectives. The new reforms open doors that were previously closed, and we hold the key.

If you are considering relocating your business or starting a new entrepreneurial venture in the world’s most dynamic hub, now is the time. Contact our team of experts for a personalized consultation and discover how the new legislation can be the springboard for your success in Dubai.

Scroll to Top