ABU DHABI (WAM)
Abdulla bin Touq Al Marri, Minister of Economy and Tourism, said that a competitive economy, flexible legislation, effective incentives, and diversified opportunities are the cornerstones of building a robust business environment capable of attracting investment, supporting corporate growth, and ensuring effective governance that protects business interests.
He added that the establishment of comprehensive and integrated legal frameworks is key to facilitating business across a wide range of economic activities and enhancing investor confidence both locally and internationally.
This, in turn, fosters advanced governance that supports the growth and sustainability of companies of all sizes and forms.
Minister Al Marri stated that the UAE, guided by the vision of its leadership, has pursued a four-decade legislative journey to develop its Commercial Companies Law, adding that the aim is to ensure that legal provisions enable rather than constrain businesses and projects, serving as a dynamic that deliver competitive advantages, unlock opportunities, and open new horizons for future prosperity across economic sectors and business activities.
He explained that the Law has undergone a series of significant amendments, including updates to its provisions and the issuance of revised versions replacing earlier ones.
This has established a flexible and contemporary legislative foundation aimed at increasing the number of companies in the UAE while continuously enhancing the legislative and business environment.
Today, the UAE is home to more than 1.4 million companies, including 250,000 established in 2025 alone, providing clear evidence of the vitality and dynamism of the country’s business ecosystem, he noted.
Al Marri added, "This journey does not stop there. The UAE has entered a new phase in the development of the Law, guided by a modern and flexible legislative methodology and marked by the issuance of Federal Decree-Law No. (20) of 2025, amending certain provisions of Federal Decree-Law No. (32) of 2021 on Commercial Companies.
"Comprising 15 amended articles and one newly introduced article, these amendments represent unprecedented legislative steps at the regional level, enhancing companies’ flexibility. They enable companies to keep pace with future trends and provide innovative tools that facilitate mergers and exit processes, while unlocking diversified avenues for accessing investment and financing."
He stated that what distinguishes these amendments is their responsiveness to the evolving needs and aspirations of the business sector, informed by the continuous assessment of ground realities.
"At the same time, we have ensured that they remain forward-looking and aligned with global best practices through more advanced governance, broader ownership and management options, reinforced business continuity, facilitating company transfers and legal transformations, and supporting the integration of the national economy across free zones and the rest of the country," he continued.
Al Marri added, "As policymakers, we regard this distinctive legislative milestone as a step that strengthens the protection of rights and expands opportunities for companies, delivering a message of confidence, empowerment, and flexibility to every investor choosing the UAE as a platform to launch their business and pursue regional and global expansion."
The amendments grant multiple quota and share classes in limited liability companies (LLCs) as well as public and private joint stock companies (PJSCs) as both a legal right and a strategic tool.
They offer founders, shareholders, and partners unprecedented flexibility in structuring ownership, profit distribution, and voting, among other aspects, compared to the previous framework, where this right was limited to public joint stock companies by Cabinet decision.
The UAE, he said, is among the first countries in the Middle East to extend this feature to LLCs, whereas many countries restrict it to joint stock companies only.
The classification of partners’ quotas or shares into multiple classes will follow certain models approved by Cabinet decision, in line with relevant international legislation.
These include Profit Share Class that grants higher profit shares or special privileges; Priority Share Class for capital redemption upon exit or liquidation, recognised as preferred rights; Preferred Share class granting additional privileges in profits, liquidation, or special voting rights; multiple Nominal Value of Share Class issued at different values without prejudice to partners’ rights; and Restricted Share Class subject to restrictions on transfer or disposal, including partner approval for crucial decisions.
The Minister added that the amendments introduce a new legal structure in the form of the “non-profit company,” enabling businesses to incorporate a social and value-based dimension by supporting impact and corporate social responsibility initiatives, as well as innovation-driven, research and development activities.
They also provide faster and more inclusive governance mechanisms aligned with the requirements of the new economy, further enhancing the competitiveness of the business environment.
With the aim of reinforcing the national economic identity, Article 9 provides that every company established in the country, including those in free zones and financial free zones, shall have Emirati nationality.
This approach strengthens the UAE’s economic reputation, enhances companies’ access to global markets and opportunities, and builds on the country’s extensive international partnerships and solid economic standing.
The new Decree-Law on Commercial Companies represents a significant step forward in legislative alignment and integration between local legislation and the laws governing free zones and financial free zones, particularly regarding company establishment, operation, and transfer across different systems, as well as coordination among licensing authorities in the country.
This will reduce compliance and operational costs, ensure business continuity, and enhance companies’ ability to access markets.
"We will continue our efforts to implement the provisions of the new Decree-Law and enable the UAE business community to maximise the benefits and advantages it provides. This will strengthen the capabilities of our private sector, contributing to reinforcing the UAE’s position as a global hub for business and investment, and reflecting its vision for innovation and economic sustainability. It will also bring us closer to our goal of achieving global leadership in the development of proactive legislation for new economy sectors by the next decade, in line with the objectives of the 'We the UAE 2031' vision," he said.