UAE Commercial Companies Law: 2025 Amendments, 2026 Compliance & Restructuring Checklist

Federal Decree‑Law No.20/2025 has reshaped the UAE commercial companies law landscape, introducing redomiciliation mechanics, multiple share classes, strengthened shareholder exit rights and a formal framework for transferring company registration between emirates. The amendments, which entered into force in late 2025/January 2026, represent the most consequential overhaul of the parent Commercial Companies Law (Federal Decree‑Law No.32/2021) since its adoption. For general counsels, CFOs and founders of UAE‑registered entities, the window for compliance action is now, and every month of delay increases legal and operational exposure. This guide provides the practitioner‑level checklists, drafting templates and procedural timelines that businesses need to act decisively in 2026.

Executive Summary, What UAE Businesses Must Do Now

Federal Decree‑Law No.20/2025, amending Federal Decree‑Law No.32/2021 on Commercial Companies, is now in force. Businesses must immediately: (1) confirm whether their entity falls within scope, (2) audit memoranda of association and articles, (3) evaluate redomiciliation options, (4) update shareholder agreements with new exit‑right clauses, and (5) prepare board resolution templates for filing. Failure to act risks non‑compliance penalties, shareholder disputes and transaction delays.

Immediate action: Schedule a board meeting within 30 days to adopt a compliance action plan. Engage external counsel to perform a gap analysis of existing constitutional documents against the commercial companies law amendments.

What Changed, Statutory Summary of the Commercial Companies Law Amendments

Federal Decree‑Law No.20/2025 introduces amendments across several pillars of the UAE’s onshore corporate framework. The changes go beyond cosmetic updates, they create new legal mechanisms that did not previously exist under the parent statute and impose affirmative obligations on companies and their shareholders.

The key amendments fall into five categories:

• Redomiciliation. For the first time, the law establishes a statutory mechanism for transferring a company’s registration from one emirate to another, or, in certain cases, from an offshore or foreign jurisdiction into the UAE, without requiring dissolution and re‑incorporation.
• Multiple share classes. Companies may now create and register differentiated classes of shares carrying distinct voting, dividend and liquidation rights, subject to disclosure and registration requirements with the competent authority.
• Shareholder exit rights. The amendments codify drag‑along, tag‑along and mandatory buyout mechanisms that were previously only available through private contractual arrangements, giving minority and majority shareholders statutory protections.
• Transfer of registration between emirates. A streamlined procedure allows companies to relocate their registered office across emirate boundaries, with requirements for creditor notification, regulatory consent and preservation of existing contracts and obligations.
• Enhanced disclosure obligations. New filing and public‑disclosure requirements apply to share‑class structures, beneficial ownership and changes in constitutional documents following any redomiciliation or restructuring.

Entities Covered and Transitional Scope, Who Must Act

Not every entity in the UAE is captured by these commercial companies law amendments. Understanding scope is the critical first step for any compliance exercise. The amendments apply primarily to mainland (onshore) commercial companies formed under Federal Decree‑Law No.32/2021, including limited liability companies (LLCs), private and public joint stock companies (PJSCs and PrJSCs), and partnerships.

Free zone entities operating exclusively within their designated zone remain primarily subject to their own free zone authority regulations. However, where a free zone company conducts activities on the mainland or seeks to transfer its registration to an onshore emirate, the amendments apply. Industry observers expect implementing regulations to provide further clarity on the interplay between federal amendments and individual free zone rules during 2026.

Transitional provisions: Companies are expected to align their constitutional documents within the transitional windows set out by implementing regulations. Boards should not wait for enforcement action, early compliance demonstrates good governance and avoids last‑minute filing bottlenecks.

Redomiciliation and Transfer of Registration Between Emirates, Step‑by‑Step

The redomiciliation provisions under Federal Decree‑Law No.20/2025 create a unified legal pathway for companies to move their place of registration without undergoing dissolution and re‑incorporation. This covers both inbound redomiciliation (foreign entities moving into the UAE) and inter‑emirate transfers (companies moving from one emirate to another). For businesses evaluating corporate restructuring in the UAE, these provisions eliminate a historically cumbersome process that often required winding up the entity in one jurisdiction and starting afresh in another.

Eligibility and Pre‑Conditions for Redomiciliation in the UAE

Before initiating a redomiciliation, the company must verify that it meets the following pre‑conditions:

• Good standing. The entity must be in good standing with its current licensing authority, with no outstanding penalties, unresolved disputes with government bodies, or pending insolvency proceedings.
• Solvency. The company must be solvent and able to pay its debts as they fall due. Evidence of solvency (audited financial statements or a solvency declaration) will typically be required.
• Shareholder approval. A special resolution of shareholders, typically requiring a supermajority as specified in the company’s constitutional documents or the law, must authorise the transfer.
• No legal impediment. There must be no court order, regulatory restriction or contractual prohibition (such as a change‑of‑control clause triggered by redomiciliation) preventing the move.

Step‑by‑Step Redomiciliation Process

Asset and contract preservation: A critical feature of the redomiciliation framework is statutory continuity, the company retains its legal personality, and all contracts, assets, liabilities and rights in rem continue in full force. There is no need to novate contracts or re‑register assets, although counterparties should be notified as a matter of best practice.

Transferring Company Registration: Dubai vs Abu Dhabi vs Sharjah

While the federal law provides the legal framework, implementation details, fees, forms and processing times, vary by emirate. The likely practical effect will be that companies must engage with both the origin and destination authorities simultaneously.

Sample board resolution language (for illustrative purposes, seek counsel): “RESOLVED that the Company be and is hereby authorised to transfer its registered office from [Emirate A] to [Emirate B] in accordance with Federal Decree‑Law No.20/2025, and that the Directors be authorised to take all steps, execute all documents and make all filings necessary to effect such transfer, including but not limited to applications to the competent authorities of both emirates, creditor notifications and amended constitutional filings.”

Share Classes, Shareholder Exit Rights and What to Change in Articles and SHAs

The introduction of multiple share classes under the UAE commercial companies law is a significant development for corporate structuring, fundraising and governance. Previously, the parent statute imposed a largely uniform share structure, limiting the flexibility available to founders, investors and joint‑venture partners.

Permitted Share Classes and Registration Requirements

Under the amended law, companies may now create distinct classes of shares with differentiated rights. Each class must be registered with the competent authority, and the rights attached to each class must be set out in the company’s memorandum and articles of association.

Disclosure obligations: Any creation of a new share class, or variation of rights attached to an existing class, must be filed with the competent authority within the timeframes specified in implementing regulations. Failure to register is expected to result in the variation being unenforceable against third parties.

Shareholder Exit Rights, Statutory Defaults and SHA Drafting

The codification of exit rights is particularly impactful for shareholder exit rights in the UAE. The amendments establish statutory defaults for drag‑along, tag‑along and mandatory buyout rights. These defaults apply unless the company’s constitutional documents or shareholder agreement expressly modify or exclude them.

Practitioners should note the following drafting implications:

• Drag‑along rights. The statute permits a majority shareholder (or group holding a prescribed percentage) to compel minority holders to sell their shares on the same terms in a third‑party sale. SHAs should specify the trigger threshold, valuation methodology, and any carve‑outs or floor‑price protections.
• Tag‑along rights. Minority shareholders gain the statutory right to participate in a sale initiated by the majority, on proportionate and equivalent terms. SHAs should clarify notice periods, matching‑rights mechanics, and the consequences of failure to exercise the tag.
• Mandatory buyout. The amendments provide a mechanism for shareholders to demand that the company or other shareholders purchase their interest in specified circumstances (e.g., deadlock, material breach, change of control). SHAs should define the trigger events, the valuation formula (fair market value, independent valuation, pre‑agreed multiple), and the dispute‑resolution procedure.
• Pre‑emptive rights. Existing shareholders retain a right of first refusal on new share issuances, subject to any class‑specific waiver set out in the articles. SHAs should specify exercise periods and whether the right is transferable.

Sample drag‑along clause (for illustrative purposes, seek counsel): “If Shareholders holding in aggregate [75]% or more of the issued share capital (the ‘Dragging Shareholders’) accept a bona fide offer from a third party to purchase all of the shares, each remaining Shareholder shall be obligated to sell its shares on the same terms and conditions, provided that the price per share is not less than the Fair Market Value determined in accordance with Clause [X].”

Sample tag‑along clause (for illustrative purposes, seek counsel): “If any Shareholder (the ‘Selling Shareholder’) proposes to transfer shares representing [25]% or more of the issued share capital to a third party, each other Shareholder shall have the right, exercisable within [30] business days of receiving the Transfer Notice, to require the Selling Shareholder to procure that the proposed transferee purchases a proportionate number of such other Shareholder’s shares on terms no less favourable.”

M&A, Fundraising and Insolvency Implications

The commercial companies law amendments have immediate consequences for M&A transactions, fundraising rounds and corporate restructuring in the UAE. Deal teams should adjust their processes as follows:

• Due diligence. Buyers must now check the target’s share‑class register for any differentiated rights, confirm that all classes are properly registered, and verify whether any redomiciliation or inter‑emirate transfer is pending or recently completed.
• Representations and warranties. Purchase agreements should include specific reps on compliance with the amended law, including confirmation that constitutional documents have been updated, all share classes are registered, and no statutory exit rights have been triggered.
• Deal covenants. Sellers should warrant that they will not initiate a redomiciliation or amend share‑class structures between signing and closing without buyer consent.
• Fundraising. The ability to create preference shares with liquidation preferences and anti‑dilution protections aligns the UAE more closely with international VC term sheets, potentially accelerating inbound investment.
• Insolvency. Redomiciliation does not extinguish existing debts or obligations. In any restructuring, creditors retain their existing claims, and any transfer of registration during or shortly before insolvency proceedings may be scrutinised for avoidance.
• Tax interplay. Companies that redomicile or transfer registration should assess whether the move triggers any obligations under the tax procedures law, including updates to corporate tax and VAT registrations with the Federal Tax Authority.

Regulatory Filings, Disclosure and UAE Commercial Companies Law Compliance Checklist for 2026

The following consolidated checklist is designed for boards, company secretaries and in‑house legal teams managing compliance with the 2025 amendments. All filings should be made through the competent authority of the emirate in which the company is registered.

Risk if you delay: Companies that fail to align constitutional documents within the transitional period risk having unregistered share classes deemed unenforceable against third parties, shareholder disputes over exit rights governed solely by statutory defaults (which may not reflect commercial intent), and regulatory penalties or delays in future licensing, M&A or financing transactions.

Practical Examples, Three Real‑World Scenarios

Scenario 1: Redomiciliation of a Trading Company

A wholesale trading LLC registered in Sharjah determines that relocating to Dubai will improve access to logistics hubs and financial institutions. Under the new framework, the company passes a special resolution, notifies creditors through local newspaper publication, obtains a no‑objection certificate from SEDD, and files an application with DET. The entire process takes approximately 10–13 weeks. All existing contracts, including supply agreements and lease obligations, continue without novation.

Scenario 2: Creating a New Share Class for VC Funding

A technology startup structured as a mainland LLC seeks Series A funding from a regional venture capital fund. The fund requires preference shares with a 1x liquidation preference and anti‑dilution protection. Under the amendments, the company amends its MOA to create a Class B preference share, registers the new class with the Department of Economy, and issues the shares to the fund. The SHA is updated with drag‑along, tag‑along and pre‑emptive‑right clauses that supplement the statutory defaults.

Scenario 3: Minority Shareholder Buyout

A 20% minority shareholder in a joint‑venture PrJSC triggers a mandatory buyout right following a deadlock event. The statutory mechanism requires the majority to either purchase the minority’s shares at fair market value (determined by an independent valuer) or consent to dissolution. The SHA specifies a 45‑day exercise period, a valuation methodology based on trailing EBITDA multiples, and arbitration seated in the DIFC as the dispute‑resolution mechanism.

Next Steps, Your 2026 Compliance Action Plan

The 2025 amendments to the UAE commercial companies law demand proactive action from every business operating under the onshore corporate framework. The redomiciliation provisions, new share‑class rules and codified exit rights offer significant flexibility, but only for companies that update their constitutional documents, register new structures and align shareholder agreements with the statutory defaults before transitional deadlines close.

To start your compliance process, use the checklist set out in this guide to brief your board, engage external counsel for a gap analysis, and prepare the necessary filings. For businesses considering redomiciliation between emirates, the step‑by‑step timeline above provides a practical roadmap from board resolution through to new trade‑licence issuance.

If your entity requires specialist guidance on any aspect of these amendments, from drafting share‑class provisions to managing an inter‑emirate transfer of registration, search the Global Law Experts lawyer directory to connect with qualified UAE corporate counsel.

Disclaimer: This article is published for general informational purposes and does not constitute legal advice. The application of Federal Decree‑Law No.20/2025 may vary depending on entity type, emirate of registration and sector‑specific regulations. Businesses should seek independent legal counsel before acting on any information contained herein. Last reviewed: 15 May 2026.

Sources

1. Official UAE Legislation Portal, Federal Decree Law on Commercial Companies
2. Ministry of Economy, Commercial Companies (Federal Decree‑Law No.32/2021)
3. UAE Government, Full Foreign Ownership of Commercial Companies
4. KPMG, The UAE Overhauls the Commercial Companies Law
5. Al Tamimi & Company, UAE Updates Commercial Companies Law
6. CMS, UAE Updates the Federal Commercial Companies Law: A Deep Dive