Regulatory Approvals in UAE M&A: Why Sector-Specific Compliance Should Be Addressed Early

For investors and companies considering acquisitions in the UAE, regulatory approval is often treated as a closing item. In many UAE transactions, approval requirements are not limited to the transfer of shares or the amendment of a trade license. They may arise from competition law, securities regulation, financial services rules, virtual asset regulation, education or healthcare licensing, telecommunications rules, or foreign ownership controls linked to activities of strategic impact.

Addressing these issues early can affect deal structure, timing, conditions precedent, valuation, and even whether the proposed acquisition is commercially viable.

The Legal Background: UAE M&A Is Not a Single-Approval Process

The UAE’s corporate law framework provides the general basis for mergers, acquisitions, conversions, and related corporate reorganizations. Federal Decree-Law No. 32 of 2021 on Commercial Companies permits companies to merge pursuant to a merger contract approved by a special resolution of the general assembly or equivalent body. The law also requires specific procedural steps, including approval of the merger agreement, creditor notification, and approval by the Ministry or the securities regulator, as applicable. Where a merger involves companies licensed by the Central Bank, the law expressly makes the transaction subject to the applicable Central Bank rules.

For public joint-stock companies, the Capital Market Authority’s role is central. The CMA’s merger service confirms that its approval is required where a public joint-stock company is party to the merger. The process includes initial approval, general assembly steps, creditor notification, and amendments to the articles of association. Depending on the activities of the companies involved, approvals from other relevant regulators or licensing authorities may also be required, including the Central Bank of the UAE for regulated banking, finance and insurance activities.

This is the practical point: a transaction may be valid as a corporate matter but still unable to close because a sector approval, licensing amendment, change-of-control consent, or competition clearance has not been obtained.

Competition Law Has Become a Front-End Issue

Federal Decree-Law No. 36 of 2023 Regarding Regulating Competition entered into force on 29 December 2023. It introduced a broader framework for economic concentration review. Under Article 12, parties must submit an economic concentration application to the Ministry of Economy and Tourism at least 90 days before completion where the relevant conditions are met. The Ministry’s review period is 90 days from receipt of a complete application and may be extended by a further 45 days. During that period, the parties must not complete the economic concentration.

Cabinet Resolution No. 3 of 2025, effective 31 March 2025, sets the minimum notification thresholds. A filing may be required if the total annual sales of the relevant undertakings in the relevant market in the UAE exceeded AED 300 million in the last fiscal year, or if their combined share exceeded 40 percent of total transactions in the relevant market in the UAE during the last fiscal year. The same resolution also sets 40 percent as the relevant market share threshold for establishing a dominant position.

Cabinet Resolution No. 59 of 2026, the Executive Regulations of Federal Decree-Law No. 36 of 2023, was issued on 20 April 2026 and entered into force on 30 July 2026. The Executive Regulations provide further procedural detail on economic concentration filings, supporting documents, examination of applications, information requests and stakeholder participation.

Failure to observe the competition filing regime is not a technical issue. Federal Decree-Law No. 36 of 2023 provides penalties for violation of Article 12, including a fine of not less than two percent and not more than ten percent of the annual total sales of goods or service revenue subject to the violation in the UAE during the last ending fiscal year. Where that figure cannot be computed, the fine may range from AED 500,000 to AED 5 million.

Sector-Specific Approval Can Drive the Deal Timetable

The UAE’s regulatory structure is sectoral. A buyer acquiring an ordinary trading company may primarily deal with the relevant mainland economic department or free zone authority. A buyer acquiring a regulated financial institution, insurance business, virtual asset service provider, school, clinic, telecommunications business, listed company, or entity with an activity of strategic impact faces a different approval path.

In financial services, the Central Bank of the UAE’s current rulebook for Federal Decree by Law No. 6 of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business includes licensing, ownership, capital and memorandum or articles amendment requirements for licensed financial institutions. The CBUAE licensing function is described by the Central Bank as the gatekeeper for market entry and changes, with authority to license, govern and supervise financial institutions in the UAE.

In the DIFC, the Dubai Financial Services Authority requires firms to notify or seek approval in relation to changes in the ownership or control structure of an authorized firm. Its service requirements include pre-application engagement, supporting documents such as pre- and post-change ownership structures, and a regulatory assessment before approval.

In ADGM, the Financial Services Regulatory Authority change-in-control form states that prior approval is required for a change in control of a domestic firm, while a branch change of control may require notification. The form also states that it should be submitted in advance of the proposed acquisition so that approval can be obtained in time.

In Dubai’s virtual asset sector, VARA’s Company Rulebook states that no action may be taken without prior written approval of VARA if it may result in a change of control of a VASP. VARA may approve or deny a change-of-control application within 30 working days from the filing of an application deemed complete, subject to extension where required.

Other regulated sectors operate in a similar way. Dubai Health Authority’s Sheryan service for changing healthcare facility ownership requires an application, DHA review and initial approval, followed by the submission of the updated trade license before the new facility license is issued. For private schools in Dubai, KHDA’s current service for amending permit owners requires initial approval from the relevant licensing authority as part of the application, followed by KHDA review and amendment of the school’s Educational Services Permit. An NOC may also be issued upon request.

Why Early Review Matters in Practice

The first practical reason is timing. Regulatory approval periods rarely fit neatly into a standard signing-to-closing timetable. Some authorities publish indicative timelines, but review periods can be extended where the file is incomplete, the authority requests clarification, or additional approvals are required. In competition filings, the statutory review framework itself requires parties to plan for a pre-completion filing period.

The second reason is deal certainty. A buyer may assume that a share transfer is a private matter between shareholders. For regulated entities, this is usually not correct. The regulator may examine the buyer’s ownership structure, source of funds, financial standing, management team, beneficial ownership, professional qualifications, compliance history and business plan. A transaction that looks straightforward at term sheet stage may become conditional on regulatory comfort that the buyer is suitable to own or control the licensed business.

The third reason is structure. Some transactions are better structured as share acquisitions; others may require asset transfers, business transfers, license amendments, branch changes, or a new license application. In regulated sectors, assets and licenses may not transfer together automatically. A clinic license, school permit, financial services permission or virtual asset license may be personal to the license holder and subject to conditions. The legal form of the transaction therefore needs to reflect how the regulator treats control, ownership, licensing and operational continuity.

The fourth reason is cost allocation. If approval risk is identified only shortly before closing, the parties may face renegotiation. Proper drafting should address who prepares filings, who bears filing fees, which party controls regulator communication, what information must be provided, what conditions are acceptable, and what happens if approval is delayed, refused or granted subject to burdensome conditions.

Structuring Considerations for Buyers and Sellers

For buyers, regulatory due diligence should start before signing exclusivity or a binding term sheet. It should identify the target’s licensed activities, issuing authority, emirate or free zone, ultimate beneficial ownership filings, shareholder restrictions, foreign ownership limits, key managers, professional licenses, premises approvals, sector-specific compliance history and open regulator correspondence.

For sellers, early preparation is equally important. A seller that has not kept its license, shareholder register, beneficial ownership information, regulatory filings, professional registrations or premises approvals up to date may delay its own exit. Cabinet Resolution No. 109 of 2023 on Real Beneficiary Procedures requires legal persons to maintain and provide real beneficiary and shareholder register information to the registrar, and related administrative penalties apply for non-compliance.

For both parties, transaction documents should be aligned with the approval path. Conditions precedent should refer to the specific authority and approval required, not only to “government approvals” in general terms. The long-stop date should reflect realistic regulatory timing. Interim covenants should restrict actions that could affect the license, ownership structure, employees, premises, regulated activities, solvency, compliance status or relationship with the authority before closing.

Where competition approval is potentially required, the acquisition agreement should address the filing obligation and the standstill requirement. The parties should also consider how they will handle information exchange before closing, especially if they are competitors or active in adjacent markets. Commercial integration should not begin before legally required approvals are obtained.

Strategic Impact Activities and Foreign Ownership

Federal Decree-Law No. 32 of 2021 also recognizes activities having strategic impact. Article 10 provides for a committee to propose activities of strategic impact and the controls required to license companies that conduct those activities. The Cabinet may determine those activities and controls, and the competent authority may set UAE national ownership or board participation requirements for companies within its jurisdiction.

This point is important in cross-border acquisitions. The UAE has liberalized foreign ownership in many areas, but investors should not assume that every activity is fully open to foreign control without additional review. Cabinet Resolution No. 55 of 2021 identifies the activities having strategic impact, including security, defense and military activities; banking, exchange, finance and insurance activities; currency printing; telecommunications; Hajj and Umrah services; Holy Quran memorisation centres; and services related to fisheries. Other sectors, including transportation, healthcare and education, may also be subject to sector-specific licensing, ownership or change-of-control requirements, but those requirements should be distinguished from the strategic-impact regime under the Commercial Companies Law.

Conclusion

Regulatory approvals in UAE M&A should be treated as a core transaction workstream, not as a post-signing administrative step. The UAE has developed a more structured framework for corporate transactions, merger control, public company transactions and sector-specific supervision. This provides greater clarity for investors, but it also requires earlier planning.

For buyers, early regulatory analysis helps test whether the proposed acquisition can be completed on the intended timeline and structure. For sellers, it reduces execution risk and avoids last-minute issues with licensing records or authority approvals. For both sides, the strongest transaction process is one that identifies the approval map at the outset, reflects it in the deal documents, and allows sufficient time for regulator review.

The direction of UAE regulation is toward more defined procedures, clearer thresholds and closer coordination between federal, emirate-level and sector regulators. That is positive for serious investors, but it also means that informal assumptions about closing mechanics are increasingly risky. In UAE M&A, sector-specific compliance is not a secondary issue. It is often one of the main factors determining whether the transaction can close cleanly, on time and without avoidable regulatory exposure.