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Overhaul of the UAE Commercial Companies Law: Key Implications for Businesses
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
Federal Decree-Law No. 20 of 2025 introduces significant amendments to the UAE’s Commercial Companies Law (Federal Decree-Law No. 32 of 2021), marking a major step in modernizing the nation’s corporate legal framework. These reforms align domestic regulations more closely with international—particularly common law—standards, enhancing flexibility, governance, and cross-border operational clarity.
Below is a structured overview of the core changes and their practical impact for companies operating in or entering the UAE market.
1. Clarified Jurisdictional Scope and Free Zone Integration
The amendments provide long-awaited clarity on the application of federal law to free zone entities conducting activities in the mainland. While free zone companies remain governed by their respective zone regulations within their geographic boundaries, any branch or representative office operating outside the free zone must comply with the Commercial Companies Law and other applicable federal legislation.
Additionally, free zone companies are now formally recognized as holding UAE nationality. This reduces legal ambiguity for multi-jurisdictional structures and simplifies operational planning for businesses operating across both mainland and free zone environments.
2. Introduction of a Non-Profit Company Structure
For the first time, UAE company law formally provides for the establishment of non-profit companies. These entities must reinvest all net profits toward their stated objectives, with distributions to owners expressly prohibited. Detailed implementing regulations are expected from the Cabinet. This creates a dedicated legal vehicle for philanthropic, social, and cultural organizations, formalizing their operational framework within the UAE.
3. Adoption of Common-Law Corporate Mechanisms
The reforms integrate familiar common-law tools directly into the statutory framework for Limited Liability Companies (LLCs) and Private Joint Stock Companies (PJSCs):
- Drag-Along & Tag-Along Rights: These may now be embedded directly in a company’s Memorandum of Association, enhancing enforceability in M&A and exit scenarios.
- Shareholder Succession Planning: Companies can pre-define mechanisms for handling a deceased shareholder’s stake, including purchase priority for remaining shareholders at an agreed or court-determined valuation.
These changes reduce reliance on complex side agreements, lower transactional friction, and provide clearer pathways for ownership transition.
4. Enhanced Capital Structure Flexibility for LLCs
Mainland LLCs are now permitted to issue multiple classes of shares (e.g., common, preferred) with differentiated rights concerning voting, dividends, liquidation preferences, and redemption. This is a transformative development for venture capital, private equity, and family businesses, enabling sophisticated capital and governance structures within the UAE’s most common corporate vehicle.
5. Formalized Re-Domiciliation (Corporate Migration) Framework
A landmark introduction is the statutory process for re-domiciliation. Companies can now transfer their legal seat into, within, or between UAE jurisdictions (including from overseas, between free zones, and between mainland and free zones) while maintaining their legal identity, corporate history, and contracts.
This “regulatory portability” is a strategic enabler, allowing businesses to optimize their structure for licensing, taxation, or commercial reasons without the need for liquidation and re-incorporation.
6. Streamlined Fundraising and Governance
- Private Placements: Private Joint Stock Companies may now offer securities via private placement in UAE financial markets, subject to Securities and Commodities Authority (SCA) rules, creating a new domestic fundraising avenue.
- Governance Continuity: Clearer rules govern managerial resignations, board succession, and interim management, reducing operational deadlocks. For instance, boards can continue to function for up to six months post-term expiry, after which authorities may appoint an interim board to ensure continuity.
- In-Kind Contributions: The amendments reinforce the validity of in-kind capital contributions, provided they are assessed by accredited valuers to ensure transparency and fairness.
Practical Takeaways for Businesses and Investors
The 2025 amendments collectively signal the UAE’s commitment to a dynamic, predictable, and internationally competitive corporate ecosystem. Key benefits include:
- Reduced Transactional Complexity: Standard M&A and succession tools are now codified, aligning UAE practice with global markets.
- Sophisticated Capital Structuring: The ability to create share classes within LLCs meets the needs of modern institutional investors and growth companies.
- Operational Agility: The re-domiciliation regime and clarified free zone interface offer unprecedented flexibility for corporate restructuring and regional expansion.
- Enhanced Governance and Certainty: New continuity provisions and formalized mechanisms strengthen investor protections and reduce legal uncertainty.
- Raising capital with more flexible instruments.
- Optimizing companies’ legal relocation via re-domiciliation.
These reforms position the UAE to better accommodate cross-border investment, complex corporate life cycles, and innovative business models, solidifying its status as a leading global business hub. They are further designed to attract and retain regional and international investment by offering a more predictable, agile, and business-friendly legal environment.
Companies operating in the UAE should review their existing governance documents and corporate structures to leverage these new provisions.
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An Opportunity for Existing Limited Liability Companies (LLCs) to Transform & Amend its Legal Status into a Private Joint Stock Company (PSC)
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
In the first chapter of this communiqué, Raju Menon, Chairman and Managing Partner of Kreston Menon elaborated on the new update on the UAE Federal Law on Foreign Direct Investment, granting foreign investors an ownership up to 100% in the mainland.
The new Federal Direct Investment (FDI) Law could not have been come into force at a more appropriate time. This long-awaited reform will progressively transform the economic and business atmosphere locally and regionally, and attract large scale investments. With governance gaining focus, the landmark FDI Law could just provide the right impetus for promoters and investors who consider enhancing their stakes and benefiting from the virtues of a corporate structure.
To begin with, there lies an immediate opportunity for aspiring limited liability companies where governance procedures are already in place, to convert the legal status into a Private Joint Stock Company (PSC) and thus transform their corporate image and enjoy the associated benefits. Though the Commercial Companies Law states the “holder of capital of a limited liability company shall not be liable for the obligations of the company other than to the extent of the capital as set out in its Memorandum of Association”, the practical applicability of this clause is often arbitrary. In case of PSC, the liability of the shareholder is limited to the extent of the value of the shares subscribed by a shareholder. In true sense, PSC is a limited liability corporation.
Prior to the implementation of the FDI Law, Article 10 of Law No. 2 of 2015 on Commercial Companies required the shareholding structure of a PSC to have 51% minimum national equity participation, just like the LLCs. Article (7) clause (5) of the Federal Law by Decree No. (19) of 2018 Regarding Foreign Direct Investment states that foreign investors can invest up to 100% in mainland companies in UAE as long as the activity is in the Positive List.
The resolution of the Council of Ministers may exclude Foreign Investment Companies from certain provisions of the Companies Law and the federal laws of the State as shall be consistent with the nature of Foreign Direct Investment Projects.
Salient features of Private Joint Stock Companies
- A Private Joint Stock Company is a company where the number of shareholders is at least 2, but not exceeding 200.
- The capital of the company shall be divided into shares of the same nominal value, to be paid in full.
- The nominal value of the share shall not exceed AED 100 and shall not be less than AED 1.00
- It is not permitted to offer the shares for public subscription.
- A shareholder shall be liable only to the extent of his share in the capital of the company.
- The issued capital of the company shall not be less than AED 5,000,000 (AED five million) and shall be paid in full either in cash or in kind.
- The founders shall choose from amongst them a committee consisting of at least 2 members to complete the incorporation procedures and to register the Company with the relevant authorities.
- The Founders Committee shall be fully liable for the accuracy, validity and completion of all the documents, studies and reports provided to the relevant authorities in connection with the incorporation, licensing and registration process of the company.
Merits of a Private Joint Stock Company
The FDI Law requires a minimum capital investment between AED 7.5-10 Million for the Agricultural and between AED 2-100 Million for the Manufacturing Sectors, while the capital requirement for the Services Sector will be in accordance with the legislation in force. It should be noted, however, that the Resolution relies on the general minimal capital requirements for some commercial activities.
Kreston Menon Corporate Services has a FDI advisory team which can help you with corporate structuring and related services. If you have any queries related to converting the legal status of your LLC into a Private Joint Stock Company (PSC) or have general questions about the Positive List Resolution you may contact the Author.
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New Mindset Of Foreign Investments To UAE – Case Studies
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
UAE economy is known to be young, rapid in growth and dynamic, and due to the strategic location between the east and the west, it gained the trust for domestic and international investment. Here came the main role of the authorities who inspire and induce foreign investors to this land of opportunities. The country was always exemplary in introducing investment friendly policies which ensure methodical and consistent growth in economic and industrial realms. UAE’s long-term plan is to diversify the economy with reduced reliance from the oil sector. In order to increase productivity and competitiveness, it is necessary to maintain and continuously improve the business climate and reduce remaining barriers to foreign trade and investment, primarily, bureaucracy, time and costs. Ongoing reforms would be better to run in the areas of human capital development, legal frameworks and clear rules for new entrepreneurs, start-up and SMEs.
Due to the country’s strategic vision of economic, social and environmental potentials, the UAE continues to achieve remarkable developments in many fields including trade, investment, telecommunications, information technology, tourism and infrastructure, as well as human and social development.
Latest reforms in the Foreign Direct Investments (FDI) rules gives more flexibility in business ownership, related regulations and at the same time these changes aim to promote and develop the country’s investment environment. It is estimated that the revision in the Law will augment FDI inflows to the country up to 20% inspite of the impact of the aftermath of the pandemic. Enactment of the FDI Law and subsequent amendment to the Commercial Companies Law has boosted FDI flows into the UAE.
The crises through which the world has been undergoing has resulted in uncertainties on economic growth everywhere. However, during such times, UAE has been focusing on finishing its infrastructure and strategic projects which were kept on hold for a long time. Higher investment and public spending are likely to drive growth to a remarkable elevation in the coming years. It is worth to notice infrastructure investment related to the country’s preparation to host the Expo 2020 Dubai will continue to support the outlook, buttressing the construction sector. This is set to contribute momentum to enhance investment in the country.
Kreston Menon was instrumental in assisting some of the top niche Companies to get 100% foreign ownership license in the UAE as per the provisions of new FDI Law and the Cabinet Resolutions released thereafter.
Case Study- 1: Manufacturer of Wellness Products
The client is a multinational company spread across US, Europe, Asia and Oceania; having operation for almost 90 years. The conglomerate engages in manufacture of healthcare products and other ingredients. The Company has been in operation in the country, however, in a limited way by organizing the availability of the products through contract manufacturing by domestic players which contributed its own pathos and limitations.
Our application process started with a formal meeting with the FDI and DED officials who assessed the merits of the proposal. The FDI department thoroughly evaluated the project feasibility and pinpointed the areas which the plan must address as per the FDI department’s expectations and requirements. Initially the application was for a trading license, however, the client changed the overall objective to take the full-fledged advantage being a 100% foreign owned company. Accordingly, discussions were held with Dubai Industrial City and Dubai Investment Park authorities for setting up a plant for manufacturing cosmetic, wellness products and alternative medicines. The project has been capitalized at AED 50 million which helped to process the application in a much faster way though the minimum capital requirements was AED 20 million. The capital outlay was structured in the form of technology transfer, installation of advanced machinery, introduction of robotic technology and artificial intelligence. The Company formulated the entire proposition for availing a national industrial license which offers duty free export to GCC countries and to the Greater Arab Free Trade Area. The Cabinet Resolution No. 16 of March 2020 (CR) granted the status of a ‘national company’ to a 100% foreign owned company, provided there is 40% local value addition in the manufacturing process, use of sophisticated machinery and modern technology despite absence of 51% UAE National ownership.
Case Study-2: Distributor of Single Brand Product
The corporation is a lifestyle company which is listed in the stock exchange in India and mainly manufactures fashion accessories such as watches, jewelry and eyewear. The entity is part of a multinational group, that started operation in 19th century having business interest from pin to plane. Being a publicly listed company, the major restriction of the Company to directly invest in the UAE market was the mandatory 51% UAE National ownership since this is not acceptable to the regulatory authority back home. The application was treated as a special case even though the CR does not expressly permit the trading segment for 100% foreign ownership. The capital commitment and investment made by the company over a period of five years is AED 250 million. The investment is in the form of setting up of various showrooms, distribution kiosks, service centers etc., pan-UAE. The limited liability company was registered with standard minimum capital; however, the client was asked to submit an assurance certificate to the FDI department as proof of investment made so far while renewing the commercial license. Deployment of qualified staffs and commitment to employ UAE Nationals in the managerial role was also a commitment given by the client to obtain the FDI license.
Case Study-3: Healthcare Service Provider
The applicant is a publicly traded healthcare provider founded almost 35 years back and operates hospitals, diagnostic centers, medical centers and pharmacies in India and Middle East. As per the CR, this activity is subject to approval of competent entities depending on the economic need considering the number of hospitals and health centers in a specific area. However, being an existing group having presence in every nook and corner of the UAE, the merit of the application was undisputable. The business plan provided the long-term objectives of the founders and the value addition they could create in the UAE economy. The most favorable impact that the FDI regulations brought to the client’s business strategy was the comfort they could offer to institutional investors who always preferred lien-free ownership in the group. 51% ownership in the name of a UAE National was always a hindrance in many entities of the founders to attract international investors.
Upon evaluating the entire process of registering the above entities, it is evident that each application for FDI license was treated purely on merit basis and ensuring how the UAE economy would benefit with such an action. The timeframe to complete the above applications took us around 45 to 60 days. The application process was expedited in many cases and turned out to be positive outcome given our experience in this market and well-established business relationships with the authorities.
Presence of the finest entities referred in the above case studies shows that the country has now gained international confidence and the latest amendments to the Commercial Companies Law steadfast the commitments by the regulatory authorities such as Abu Dhabi Investment Office, Dubai Investment Development Office, Sharjah Investment and Development Authority etc. Foreign Direct Investments help the UAE’s economy to boost rapidly, creating new jobs, productivity and consumption. Foreign Direct Investments will continue to grow in UAE, considering there is no direct taxation on corporations or individuals. At the same time, good-quality business climate and longterm political stability promote confidence to all possible foreign investors.
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ABRAHAM ACCORD: The Game Changer in Middle East
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
The world woke up to the unexpected and astounding news of the peace treaty between the UAE and Israel, making UAE just the third Arab state, after Egypt and Jordan to establish formal ties with Israel. UAE scrapped an economic boycott against Israel which was in place for decades, allowing trade and financial agreements between the countries.
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Single Family Office Effective Solution for Managing Affluent Family Wealth
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
Wealthy families are seeking advanced, more systematic, and secure ways to manage their wealth and investments. Family Office concept has emerged as a preferred solution providing structured financial services to affluent families, managing their assets, and protecting legacies for future generations. Family Offices facilitate to professionalize investment and management functions by creating investment committees, establishing governing boards, structuring family leadership succession plans, next generation education programs etc. There are manifold reasons to set up a Family Office and these dwell around the family’s vision, objectives, and ambitions. The fundamental objective would be to protect and preserve family wealth through generations, and to ensure that this objective is given a structure that caters to that family and evolves when the family grows or changes. Family offices tend to provide broadly two types of services or a combination thereof: (i) those focused on financial planning and investments; and (ii) those aimed on the family and supporting, its day-to-day needs. The first category would typically include investment and asset management, asset monitoring, trust services, tax and legal services, and under the latter category, concierge services, travel planning and administrative functions may be included.
In UAE, there are Three Robust Jurisdictions where Single Family Office may be Set Up:
(1) Dubai International Financial Centre (DIFC)
(2) Abu Dhabi Global Market (ADGM)
(3) Dubai Multi Commodities Centre (DMCC)
DIFC & ADGM
DIFC and ADGM are the financial centers reputed for the presence of international financial service providers. They emerged as highly respected financial jurisdictions benchmarking globally recognized regulations and best practices. DIFC and ADGM comprise three independent authorities viz., Registration Authority, Financial Services Regulatory Authority and Court that directly apply common laws. They have created a governing framework that adheres to the highest international standards, creating a secure and stable operating environment that fosters confidence among investors and families alike. Financial Service Authorities of the respective jurisdiction ensure compliance with stringent regulations, providing a vigorous safeguard for investors’ interests and preserving the integrity of the financial ecosystem.
Setting up a Family Office in DIFC
In DIFC, a Family Office can be established as a Private Company or a Limited Liability Partnership. SFO shall be established to either serve (i) a single Family; or (ii) multiple Families. Family Office serving multiple families requires approval by the DIFC Registrar of Companies after it satisfied the Registrar regarding the shared arrangements between the Families served and the reasons for serving multiple Families. A Family to be served by a Family Office must have a minimum net asset of USD 50 million. The net asset value for this purpose is established with reference to a fair market value assessment or, where this is not possible, as determined by way of a book value assessment. The SFO structure shall have a minimum of one shareholder and a minimum of one director.
DIFC SFO may Engage the Following Services in General:
(a) Services to one or more family members
(b) Services to family fiduciary structure
(c) Services to family entity
(d) Services to family businesses.
Setting Up a Family Office in ADGM
In ADGM there are no minimum investment requirements for setting up a family office. In spite of a benchmark figure is USD 10 million, the families can decide on their investment size based on their financial goals and aspirations. The accepted legal structure is Restricted Scope Companies (RSCs) and Foundations, each with distinct benefits catering to specific objectives. Eligibility to set up a SFO is based on the underlying principle that the family must have a closely related group of individuals united by blood, marriage, or adoption and share a common interest in wealth management and preservation. SFO may opt for a physical office or engage a service provider in ADGM.
ADGM SFO may Engage the Services in General:
(a) Creation of a family office structure can engage in devising investment strategies and business plans.
(b) Develop appropriate remuneration packages and strategies to attract key staff members.
(c) Developing governance structures from a corporate and family perspective.
(d) Design and develop appropriate succession planning. (e) Strategize acquisitions, re-organization and exits from investments and businesses.
(f) Cration of philanthropic strategy and designing a structure that meets social responsibility and commitments.
Setting Up a Family Office in DMCC
In DMCC, Single Family Offices are incorporated as per DMCC Company Regulations and as per the Guidelines for
Single Family Office License. SFO may accept the legal structure of a free zone limited liability company which may be owned either by individuals or a corporate entity or a registered trust (in each case wholly owned by the same family and UBOs).
It is desirable that the family has a minimum of USD 1 Million investible/liquid assets to be accepted as a SFO in DMCC. The SFO is permitted only to manage the assets of one family group and not permitted to act as trustee but might act solely as protector or as conduit with offshore regulated trustees operating the trusts or foundations. May supervise and coordinate activities amongst foreign fiduciary service providers.
The beneficiaries shall not sell shares of the SFO entity to any party, except in the case of transfer within family members. Only a family member may be a member of the board of directors; except for a consultant to the SFO who may be appointed as a director. In such a case also at least one family member must be appointed as a board member or legal representative.
DMCC SFO may Engage the Services in General:
(a) Wealth management
(b) Asset management
(c) Concierge work
(d) Day to day accounting
(e) Management of legal affairs
(f) Corporate governance issues
(g) Administrational and office affairs
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Introducing Expo City Dubai & KEZAD Metal Park
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
Expo City Dubai is the latest addition to the array of Free Trade Zones in Dubai. The City was granted its free zone status in June 2022 through an official decree and resolutions. The Free Zone is an integral part of Dubai 2040 Master Plan which emphasizes the need of sustainable development, greener and healthy communities.
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New Visa Reforms: Major initiative to attract and retain talent
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
Golden Visa/Long Term Visa for Investors & Entrepreneurs
UAE Government decided to grant investors a ten-year residency visa, as well as to grant residency visas of up to 10 years for specialists in the medical, scientific, research and technical fields, and for scientists and creative talents of culture and arts, including their spouses and children. The decision aims to maintain the position of the UAE as an optimal business environment.
Investors in Freehold Property
The decision defines two categories for investors: Investors in a property of a value of 5 million Dirhams or more will be granted a residence for five years, and investors in public investments through a deposit, an established company, business partnership of 10 million Dirhams or more, or a total investment of not less than 10 million Dirhams in all areas mentioned as long as non-real estate investments are not less than 60per cent of the total investment, will be granted a renewable residency visa every 10 years.
Conditions to be met:
- The amount invested should be wholly owned by the investor and not loaned and should be proven by supporting documents.
- Investment retention for at least 3 years
- A standard financial liability with a financial solvency not exceeding Dh10 million
- The long-term visa could also be extended to include business partners, provided that each partner contributes Dh10 million, the spouse and the children, as well as one executive director and one advisor
- The decision allows investors to enter the country for a six-month period, multiple entry, to apply for the long-term visa requirements
Entrepreneurs
The decision also includes the terms to grant long-term visa to two categories of entrepreneurs – those having a previous project with a minimum of Dh500,000, or having the approval of an accredited business incubator in the country. Entrepreneurs will be granted a five-year visa with a possibility for upgrading to an investor’s visa provided they meet the requirements.
The benefits of the entrepreneurial visa include entrepreneurs, partners, three executive directors, spouse and children. The entrepreneur is allowed entry into the country for six months, multi-entry visa period, with renewal for another six months.
Other Categories
1. Specialised Talents and Researchers in the Fields of Science and Knowledge
The decision further extends to grant a 10-year visa for specialized talents and researchers in the fields of science and knowledge for doctors, specialists, scientists, inventors, as well as creative individuals in the field of culture and art. The visa’s advantages include the spouse and the children. All categories are required to have a valid employment contract in specialised fields of priority for the UAE, and the conditions for each category are defined as follows:
Criterion for doctors and specialists [requires at least 2 of the conditions mentioned below]
- Holder of a PhD degree from one of the top 500 universities in the world
- Holder of an award or certificates of appreciation for the work in the applicant’s jurisdiction
- Contribution to a major scientific research related to the work of the applicant
- Published articles or scientific books in distinguished publications in the field of work of the applicant
- Membership in an organisation related to the work of the applicant, which requires excellent work to accept membership
- A PhD degree in addition to 10-year professional experience in the applicant’s field of work
- Specialisation in areas of priority to the UAE (additional requirement for the doctor)
2. Creative Individuals in Culture and Art – who have been accredited by the Ministry of Culture and Knowledge Development
3. Inventors – who obtained a patent of value added to UAE’s economy with the approval of the Ministry of Economy
4. Exceptional Talents – Those who have exceptional talents that are documented by patents or scientific research published in world-class journals.
5. Executives – Owners of leading, well-known and internationally recognized companies, holders of high academic achievement, professional experience, and position (eg, an engineer in a rare specialty with a university degree and working in a private company in the UAE).
6. Outstanding students – The decision also includes provisions for granting a 5-year visa to outstanding students with a grade of at least 95 per cent in secondary schools in public and private schools, and a distinction of at least 3.75 GPA upon graduation from universities within and outside the country. Benefits include families of the outstanding students.
Business visa
A business visa is part of the Golden Visa system under which foreigners can obtain a long-term visa for themselves and their dependents. An eligible entrepreneur is anyone who has set up a business of his own at some point of time in his career and wishes to do so again in the UAE. It aims to create an attractive environment for businesses and the UAE’s economic growth. The visa is normally valid for 5 years.
Criteria
- Be able to substantiate the experience as an entrepreneur
- Have been a majority shareholder of a start-up or a member of its senior leadership
- Be willing to relocate to the UAE and legally establish a business in one of the seven emirates
- Have a business idea or a business plan that you wish to bring to life in the UAE
In addition, applicants must successfully pass the requirements of the Federal Authority for Identity and Citizenship including a background check and health assessment. Qualifying for the business visa does not guarantee that the applicant will receive the visa. Specialised committees review the application and the attached documents and grant an approval accordingly. Once approved, the applicant will be required to follow the requirements of the Federal Authority for Identity and Citizenship in order to be issued the visa.
Applying for business visa at AREA2071
In order to apply for a business visa, the investor’s nomination must be approved by Area2071, the incubator supported by the UAE government. Once the nomination has been approved, the investor shall be invited to apply for the visa through the Federal Authority for Identity and Citizenship.
Benefits of business visa
Once the visa is issued, the investor can:
- Enter the country for a period of six months with a multiple-entry visa, to facilitate the procedures of establishing the business.
- Nominate up to three of his business’s senior staff to obtain residency.
- All visa holders will be allowed to sponsor their dependents subject to the conditions and requirements as set out by the Federal Authority for Identity and Citizenship.
Retirement visa for UAE residents
Retired residents over the age of 55 can get a long-term residence visa for a period of 5 years. The visa may be renewed if the eligibility criteria is met.
For a retiree to be eligible for a 5-year renewable retirement visa, he must fulfill one of the following criteria:
- Invest in a property worth AED 2 million
- Have financial savings of not less than AED 1 million
- Have an active income of not less than AED 20,000 per month
3 years residence visa based on freehold property
Owner(s) of freehold property with a minimum value of AED 1 million is eligible for 3 years residency visa. In case the property is mortgaged, 50% of the property value or at least AED 1 million to be deposited in the local bank. Husband and wife can participate in the same property provided the value is AED 1 million or more.
Residence visa program for remote working professionals
This program was launched for overseas remote working professionals and subject to renewal every year. This program allows overseas remote working professionals to relocate and live in the emirate – along with their families – while continuing to work remotely for their overseas employer. The relocation program will be valid for a year, after which it can be renewed successively for a similar duration each time. Once in Dubai, they will be able to enjoy benefits similar to that of other residents including access to local telecoms and utilities services as well as schooling options for their children.
Eligibility:
To be eligible for the program, individuals must fulfil the following conditions:
- Possess a passport with a minimum validity of six months.
- Have health insurance with UAE coverage validity.
- Show proof of employment from their current employer with a one-year contract validity, a minimum of $5,000 monthly salary, and must furnish the previous months’ pay-slip as well as three months of bank statements.
- If the applicant is a company owner, then they must show proof of ownership of the company for at least a year, along with an average monthly income of $5,000 supported by three months of bank statements.
UAE Citizenship for foreigners
In January 2021, the UAE Government approved amendments to the ‘Executive Regulation of the Citizenship and Passports Law’ allowing specific categories of foreigners, their spouses and children to acquire the Emirati nationality. The amendment stipulates certain conditions for each category and allows the naturalised citizen to retain his original nationality.
Categories of foreigners who can be nominated for UAE citizenship
The following categories of foreigners can be nominated for the UAE nationality:
- Investors
- Doctors
- Specialists
- Inventors
- Scientists
- Intellectuals
- Individuals with creative talents
Eligibility conditions
- An investor must own a property in the UAE.
- A doctor or specialist must be specialized in a scientific discipline of high demand in the UAE, and must have acknowledged scientific contributions and practical experience of not less than 10 years. He/she must have a membership in a reputable organization in the field of specialization.
- A scientist is required to be an active researcher either at a university, research centre or in the private sector. He/she must have practical experience of not less than 10 years in the same field and must have contributed to the said field. He/she must also have a recommendation letter from a recognised scientific institution in the UAE.
- An inventor must have one or more patents that are approved by the UAE’s Ministry of Economy (MoE) or any other reputable international body. He/she must also have a recommendation letter from MoE.
- Intellectuals and other individuals with creative talent/s should be pioneers in the field of art and culture and must have won at least one international award. A recommendation letter from related government entities is required as well.
Other conditions
Eligible candidates will need to:
- Take the oath of allegiance and loyalty to the UAE
- Commit to abide by the UAE’s laws
- Inform the UAE government entity, in case of acquiring or losing any other citizenship.
- The citizenship can be withdrawn upon breach of the conditions
Requirements for acquiring nationality
Nationality shall be granted to the applicant in accordance with the following conditions:
- He/she shall renounce his/her nationality of origin or any other nationality he/she holds.
- He/she shall be proficient in Arabic.
- He/she shall have a lawful source of income.
- He/she shall hold an educational qualification.
- He/she shall be of good reputation and good conduct.
- He/she shall not have been convicted for a felony or misdemeanour involving moral turpitude or dishonesty, unless rehabilitated.
- He/she shall obtain security approval.
- He/she shall swear allegiance to the UAE.
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UAE’s Fourth Industrial Revolution – Operation 300 billion
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
UAE’s industrial sector witnessed a remarkable growth and transformation in 2023 by encompassing and synergizing the strong partnership between the Ministry of Industry and Advanced Technology (MoIAT) and the private sector. The strategy is aligned with national goals and international commitments relating to advancing sustainable economic growth, deploying clean energy solutions, driving industrial innovation, and promoting responsible consumption and production.
The project operation 300bn aims and encourages sustainable development and leads to the Fourth Industrial Revolution which encapsulates an overall gamechanger to the UAE economy and its competitiveness. It aims to raise the industrial sector’s contribution to the GDP from the current AED 133 billion to AED 300 billion by 2031.
MoIAT Strategy
MoIAT’s Operation 300bn strategy is a comprehensive plan for developing the UAE’s industrial sector and improving its role in stimulating the national economy and abridged to:
- Develop the UAE’s industrial sector, both macro and micro level.
- Increase its in-country value (ICV) program.
- Establish the country as a preferred global hub for industries.
- Build the reputation of the UAE’s industrial products through the promotion of exports to global markets.
- Create quality job opportunities in the industrial sector.
Objectives of MoIAT which formulated the strategy
The strategy is built on the following 6 objectives:
1. To create a relevant and attractive business environment for local and international investors in the industrial sector. 2. to support the growth of national industries and enhance their global competitiveness.
3. To stimulate innovation by accelerating advanced technology adoption across the industrial value chain to upgrade systems and solutions, boost productivity and forge competitive advantages in new areas.
4. To build on the solid industrial foundations that have helped fortify the UAE’s position as a global leader in industries of the future.
5. To cultivate a culture of innovation in the ministry.
6. To provide a comprehensive array of administrative services in accordance with the highest standards of quality, efficiency, and transparency.
Initiatives adopted to implement the strategy
- Established an integrated R&D ecosystem
- Continuous efforts to position UAE as a pioneering global destination for technology and innovation
- Improvement in developing an advanced technology roadmap that drives innovation
- Established standards and metrology that support advanced technology adoption
- Catalysing the adoption of the 4IR technology to boost the productivity of anchor industries
- Consistent monitoring of ICV program
- Continuous promoting ‘Made in the Emirates’ brand and national products
- Developed an integrated quality infrastructure
- Continuous negotiation of reciprocal trade agreements and work to control the classification system of traded products for export and import
- New industrial law has been implemented
- Offering attractive energy and gas tariffs to eligible sectors
- Launched a framework for partnerships with industrial sectors to develop standards and metrology
- Providing flexible financing at competitive costs for priority sectors
- Digital transformation to simplify registration, licensing and fee procedures
- Built a data management platform
Vital Industrial Sectors Identified
The following sectors have been identified to stimulate the growth and achieve the very objectives.
- Food, beverage, and agricultural technology
- Pharmaceuticals
- Electrical equipment and electronics
- Petrochemicals and chemical products • rubber and plastics
- Machinery and equipment
- Hydrogen
- Medical technology
- Space technology
Progress of the project Operation 300bn and the steps adopted so far
Operation 300bn project achieved many milestones since its announcement and implemented many investor friendly measures to accelerate its success.
Abu Dhabi Industrial Development Bureau (IDB) endorses significant achievements in the year 2023 within the industrial sector, with numerous initiatives and programs supporting the objectives of Operation 300bn, along with the Abu Dhabi Industrial Strategy (ADIS). The strong performance of the industrial sector in 2023 reflects the continued success of ADIS initiatives. The sector now represents over 17 percent of Abu Dhabi’s non-oil GDP and 9 percent of overall GDP.
Dubai Industrial City witnesses the presence of more than 800 customers and 300 operational factories within Dubai Industrial City. The collaboration with the Ministry of Industry and Advanced Technology helped Dubai Industrial City to launch their “Make Brilliance” global awareness campaign in 2023, where they executed a tripartite agreement with MoIAT and Emirates Development Bank (EDB) to boost the ‘Make it in the Emirates’ initiative. As part of the agreement, EDB committed to providing AED 1 billion in financing for Dubai Industrial City’s customers over the next three to five years.
MoIAT issued 263 new industrial production licenses in 2022, a 20 per cent increase over 2021, while the National In-Country Value program succeeded in redirecting Dh53 billion into the economy, a 25 per cent increase.
The Ministry is also providing financial incentives through seven local and international financial institutions and has reduced 14 service fees to cut the cost of doing business.
MoIAT announced that more than 300 products can be manufactured locally by investing in excess of Dh110 billion as part of companies’ procurement requirements for the next decade across 11 growth sectors.
MoIAT aims to unveil more than 1,000 technological projects by 2031, raise advanced technology exports to Dh15 billion and increase the GDP of advanced technology to Dh110 billion.
The Ministry signed an integrated industrial partnership with Egypt, Jordan, and Bahrain. As part of the partnership, the first wave of industrial projects worth more than $1 billion was unveiled last year.
Role of Emirates Development Bank (EDB)
EDB plays a key role and a prominent enabler in succeeding the objectives of MoIAT. EDB has earmarked a portfolio of AED 30 billion to support the industrial sector over a period of five years. The bank aims to finance 13,500 SMEs and create 25,000 jobs in the following sectors.
Manufacturing
Petrochemicals, plastics, heavy industries, machinery, electrical appliances and renewable energy equipment
Infrastructure
Energy, transportation, communications and digital infrastructure
Technology
Software, IT, storage devices, peripherals, renewable energy technology and education technology
Healthcare
Pharmaceuticals, biotechnology, medical equipment and hospital services
Food security
Agriculture, livestock, aquaculture and water desalination.
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Extensive Reforms in the UAE Commercial Legislations and Regulatory System
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
During these immediate past two years UAE witnessed a wide range of reforms, modifications, amendments in the country’s legal and regulatory framework aiming to bolster economic, investment and commercial prospects. The reforms intend to keep the momentum of the developmental achievements of the country and to reflect its impending aspirations. Over 40 laws are included in the changes, which together represent the largest legal reform in the young nation’s 50-year history. The repealing/amendments aim to develop the legislative and regulatory structure in various sectors, including investment, trade, industry, as well as commercial company, regulation and protection of industrial property, copyright, trademarks, commercial register, electronic transactions, trust services, factoring and residency. The new legislative changes came after intensive coordination at both the local and federal levels and adopting global best practices in the global legal system.
Here are some of the earlier laws and their revised versions:
| Revised Laws | Annulled/Amended Laws | Significant Reform |
| Federal Decree Law No. 46 of 2021 on Electronic Transactions and Trust Services | Federal Law No. 1 of 2006 on Electronic Commerce and Transactions. | Keeping pace with technological development and enhance ongoing digital transformation. The law gives digital signatures the same weight as a handwritten signature, a step that obviates the need for personal presence to seal transactions. |
| Federal Law No. 11 of 2021 on the Regulation and Protection of Industrial Property Rights | Federal Law No. 17 of 2002 on Regulation and Protection of Industrial Property of Patents, Industrial Drawings and Designs | Dedicated to patents, industrial designs, integrated circuits, non-disclosure agreements and utility certificates. It applies across the UAE (including free zones). |
| Federal Decree Law No. 38 of 2021 on Copyrights And Neigbouring Rights | Federal Law No. 7 of 2002 on Copyright | The amendments offer special benefits for people of determination to enhance their benefit and participation in this vital sector. |
| Federal Decree Law No. 36 of 2021 on Trademarks | Federal Law No. 37 of 1992 on Trademarks | The amendments offer protection to three-dimensional trademarks, holograms, sound trademarks such as musical tones associated with a company and that distinguish its products, and smell trademarks such as creating a distinctive scent for the company or brand. The updates also include registering geographical names of trademarks or products. |
| Federal Decree Law No. 37 of 2021 on the Commercial Register | Federal Law No. 5 of 1975 on the Commercial Register | Allowing local authorities in each emirate to retain the right to establish and manage their commercial records, including registration, data monitoring and change. |
| Federal Decre Law No. 32 of 2021 on Commercial Companies | Federal Law No. 2 of 2015 on Commercial Companies | The law allows investors and entrepreneurs to establish and fully own onshore companies in all sectors, excluding a small number of reserved “strategic activities”. |
| Federal Decree Law No. 25 of 2022 – UAE Industrial Law | Federal Law No. 1 of 1979 – Industrial Law | The law strengthens the UAE’s position as an industrial global hub that attracts quality investments through incentives and enablers, including the National In-Country Value program (ICV), Industry 4.0 and Technology Transformation Program. |
| Federal Law No. 42 of 2022 – UAE Civil Code | Federal Law No. 11 of 1992 – UAE Civil Code | Whilst the new law does not overhaul civil procedure in the UAE, it introduces some significant changes. In particular the New Law provides for a change to service outside the jurisdiction; a confirmation that cheques are “enforceable instruments” and changes in relation to appeals, including the manner in which the Court of Appeal will deal with appeals before it and changes to the period for appeals to the Court of Cassation. |
| Federal Decree Law No. 50 of 2022 –the Commercial Transactions Law | Federal Law No. 18 of 1993 – the Commercial Transactions Law | The new law adopts advanced and flexible legislative mechanisms and keeps pace with the modern reality of real and virtual businesses. |
| Federal Decree Law No. 35 of 2021 on Bankruptcy | Replaces the Federal Law No. 9 of 2016 – Bankruptcy Law | This amendment seeks to clarify when a debtor’s directors and managers can be held personally liable for the company’s debts if they cannot be repaid. |
| Federal Decree Law No. 18 of 2022 (Amended Decree Law) relating to Value Added Tax | Federal Decree Law No. 8 of 2017 relating to Value Added Tax | Amended Decree Law to allow the FTA an additional four years to undertake an audit provided that it has issued a notice for audit or assessment before the expiration of the general statute of limitations of five years. |
| Federal Decree Law No. 33 of 2021 on Regulation of Employment Relationship | Federal Law No. 8 of 1980 – UAE Labour Law | The new Law abolished unlimited term contracts and replaced with fixed – term contracts. |
| Federal Law No. 3 of 2022 on Commercial Agencies | Federal Law No. 18 of 1981 – Commercial Agency Law | The New Commercial Agency Law adopts a more balanced approach between principal and agent such as i) the type of companies which can act as a registered commercial agent has been expanded; ii) the reasons for which a principal can terminate a registered commercial agency agreement have been expanded in certain circumstances; and iii) parties can agree to resolve agency disputes through arbitration, an option which was not permissible under the old Commercial Agency Law. |
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Federal Decree No. 32 of 2021 on Commercial Companies
Pushpakaran Parambath, Senior Partner - Kreston Menon Corporate Services
The United Arab Emirates government published the Federal Decree No. 32 of 2021 concerning UAE Commercial Companies Law (CCL 2021) which came into force on 2nd January 2022, on which date the Federal Decree Law No. 2 of 2015 and its amendments (CCL 2020) were repealed.
Prominent provisions and amendments to the Law:
Public Joint Stock Companies (PJSC)
(a) Allows the establishment of companies for the purposes of acquisition or merger, and SPVs, and establishes a legal framework for these new legal forms and excludes them from some provisions of the Companies Law through a decision issued by the SCA to regulate the work of these forms of companies.
(b) Abolishes the maximum and minimum percentage of the founders’ contribution to the company’s capital at the time of the public offering as well as cancels the legal limitation of the subscription period and leaving the two matters to what is specified in the prospectus.
(c) Eliminates the requirement for the nationality of the members of the board of directors and upholds the organization shareholders’ decisions in the election of board members, in accordance with the terms and conditions set by the competent authority.
(d) Allows companies to transform into a Public Joint Stock Company and sell its shares or offer new shares in a public subscription without being restricted to a certain percentage by following the price-building mechanism of the security.
(e) Allows companies to divide and create legal rules governing division operations, thus contributing to diversifying the company’s activities and fields of work and increasing its projects and growth opportunities.
(f) Allows companies to determine the face value and to determine the percentage of the offering. The CCL 2021 allows shareholders to determine the nominal value of shares as specified in accordance with the PJSC’ Articles of Association thus removing the range of AED 1 to AED 100 prescribed by the CCL 2020.
(g) Finds financing solutions for companies through the issuance of other types of shares.
(h) Allow companies to issue discounted shares in case the market value of a company’s share price falls below the nominal value subject to (a) passing a special resolution; and (b) obtaining the approval of the Securities & Commodities Authority (SCA). However, the result of issuance of shares at a discount will cause a negative reserve, which must be settled from its future profits before any profit can be distributed amongst the shareholders.
Limited Liability Companies (LLC)
(a) Expiration of the Board of Managers’ term If the term of the Board of Managers expires, and a new Board of Managers is not appointed, then the existing board will continue to manage the LLC for a period of 6 months. At the end of this term a new board must be appointed by the LLC, and if not appointed, the Department of Economic Development (DED) can appoint a board whose term will not exceed one year, during which, the LLC must appoint a new Board of Managers. Therefore, the appointment of the Board of Managers by the DED is a stopgap arrangement that will be regularised if the LLC fails to appoint the board itself.
(b) Appointment of the Supervisory Board CCL 2020 obligated LLCs to appoint a Supervisory Board when the company consists of more than 7 shareholders. CCL 2021 has increased the number of required shareholders to 15. The Supervisory Board is appointed from at least three shareholders to supervise the company’s annual reports, budgets, distribution of profits and to also supervise the LLCs’ managers and submit a report in this regard to the General Assembly.
(c) Decrease in Legal Reserve CCL 2021 has decreased the extent of allocating a legal reserve from 10% to 5%, and as prescribed by the CCL 2020, the CCL 2021 emphasized that shareholders can stop this allocation if the legal reserve reaches 50% of the share capital.
Foreign Company Branches
Allows branches of foreign companies licensed in the country to transform into a commercial company with UAE citizenship.
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