Reviewing Commercial Contracts Under the New Civil Transactions Law

Federal Decree-Law No. 25 of 2025 promulgating the Civil Transactions Law became effective on 1 June 2026. The legislation is relevant to a wide range of private and commercial relationships, including service and supply arrangements, leases, construction contracts, guarantees and settlements.

The introduction of the new law provides businesses with a useful opportunity to revisit contracts that may have been prepared under the previous legislative framework.

Particular attention may be required in relation to provisions concerning:

payment and consequences of non-payment;
termination and suspension rights;
force majeure and exceptional circumstances;
agreed damages and contractual liability;
dispute resolution and governing law;
confidentiality and commercially sensitive information; and
notices and electronic communications.

The effectiveness of these provisions often depends on how precisely they are drafted. A force majeure clause, for instance, may need to address not only which events qualify, but also notification requirements, the temporary consequences for contractual performance and the circumstances in which prolonged disruption permits termination.

Regular contractual reviews can therefore assist businesses in identifying uncertainty before it develops into a commercial dispute.

Anti-Money Laundering Obligations for Regulated Businesses

Anti-money laundering compliance extends considerably beyond the financial sector. Federal Decree-Law No. 10 of 2025 and Cabinet Resolution No. 134 of 2025 establish an updated framework for combating money laundering, terrorist financing and proliferation financing.

The regime applies to financial institutions as well as designated non-financial businesses and professions and other entities falling within its scope. Depending on the relevant activity, regulated sectors may include real estate, precious metals and stones, auditing and accounting, trust and company services, virtual assets and certain professional services.

Businesses subject to these requirements should ensure that their compliance systems are proportionate to their activities and risks. Appropriate measures may include customer and beneficial-owner identification, risk assessment, ongoing monitoring, sanctions screening, retention of relevant records and suspicious transaction reporting where legally required.

Understanding beneficial ownership is particularly important. Where the relevant rules apply, a business must look beyond the immediate company or shareholder and establish who ultimately owns or controls the entity concerned.

This becomes especially significant in transactions involving substantial values, international payments, complex corporate structures or other circumstances carrying an elevated compliance risk.

Tax Compliance and Administrative Penalties

Tax obligations should form part of a company’s ongoing compliance programme rather than being addressed only immediately before a filing deadline.

Corporate tax registration and returns, accounting records, related-party arrangements, transfer pricing requirements and VAT obligations may all require continuing oversight.

Cabinet Decision No. 129 of 2025 amended aspects of the UAE’s administrative penalties regime for violations of tax legislation and became effective on 14 April 2026. Certain penalties and calculation mechanisms were revised, creating additional reasons for businesses to identify and correct tax compliance issues promptly.

Companies should therefore periodically review their tax position and determine whether any incorrect records, registration issues, filing omissions or other errors require rectification or voluntary disclosure.

Maintaining an internal tax calendar covering filing dates, payments, record retention and compliance reviews can substantially reduce the risk of avoidable administrative problems.

Employment and Payroll Controls

Employment compliance should be regarded as a wider corporate responsibility and not solely as a matter for the human resources department.

Ministerial Resolution No. 340 of 2026 concerning the Wage Protection System introduced the current WPS framework. Employers covered by the regime should ensure that employees receive their wages in accordance with the applicable legal and contractual requirements.

An employment compliance review may cover matters such as employment contracts, remuneration and allowances, leave entitlements, end-of-service calculations, overtime records, work permits, disciplinary procedures and payroll authorisation.

Emiratisation obligations also require continuing attention. Private-sector establishments with 50 or more employees remain subject to applicable Emiratisation targets, while certain smaller establishments may also fall within the relevant requirements depending on their activities. Workforce planning should therefore take account of the company’s applicable targets well before the relevant compliance deadlines.

Keeping Corporate Governance Up to Date

As companies expand, informal arrangements that worked during their early stages may become increasingly unsuitable. Changes in shareholding, management, investment or business activities can expose weaknesses in corporate governance arrangements.

The UAE Commercial Companies Law provides the principal federal framework governing many aspects of company management, including the rights and responsibilities of shareholders and managers, corporate approvals, conflicts of interest and company records.

Businesses should ensure that their formal documentation corresponds with the way the company actually operates. Depending on the corporate structure, this may require keeping shareholder and board resolutions, registers, powers of attorney, authorised-signatory records and beneficial ownership information current.

Internal authority should also be clearly allocated. A company should know who is permitted to enter into contracts, authorise expenditure, operate bank accounts or approve significant transactions and when a matter requires approval at board or shareholder level.

Clear authority limits and proper corporate records can become particularly important if the validity of a transaction is later challenged.

Staying Ahead of Regulatory Change

UAE business law developments should be approached as part of ordinary commercial risk management. Periodic reviews of contracts, compliance systems, employment practices and corporate records can identify potential problems before they result in disputes or regulatory intervention.