Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
Businesses in the UAE are preparing for a slew of new competition rules coming into force at the end of March 2025 which promise to promote transparency and create a more competitive business landscape.
A recently issued Cabinet Decision (No. 3 of 2025) establishes a stricter merger control regime effective from March 31, 2025, requiring companies to meet new thresholds and file for approval when pursuing mergers or acquisitions.
The updated regulations, which build on a 2023 federal competition law overhaul, aim to prevent anti-competitive concentrations and ensure a fairer economic landscape.
"The UAE introduced the Regulation of Competition Law recently to establish a legal framework that protects and regulates competition, reinforcing its role in driving national economic growth and enhancing the country's overall business competitiveness," Abdullah Ahmed Al Saleh, Undersecretary of the Ministry, said at a media roundtable last month.
"Enhancing the UAE's competition landscape is a vital step toward strengthening the market economy and fostering diverse economic activities in line with the economic freedom principle."
The stricter rules on mergers and acquisitions mainly aim to prevent monopolies and ensure fair competition in the market, ensuring consumers get fairer deals, and markets remain accessible to new entrants.
Starting March 31, 2025, businesses planning to merge or acquire another company must seek government approval if their combined sales in the UAE exceed Dh300 million ($82 million) or if the new entity would control 40% or more of the market.
Previously, the UAE had competition laws in place, but there was no clear threshold for when businesses needed approval, leading to uncertainty. Now, companies must notify the Ministry of Economy at least 90 days in advance, and failing to do so could result in fines of up to 10% of their UAE revenue.
The government says these new rules will create a more transparent and competitive economy, preventing large corporations from gaining excessive control over key industries while still allowing healthy business growth.
Certainly, the new laws are expected to substantially increase the number of legal filings, with many within the legal industry expecting a lot more M&A work from March onwards.
"The introduction of the turnover thresholds is a welcome move and an important update to the UAE's competition framework," Christopher R. Williams, Amelia Bowring of Bracewell LLP, said.
"The result will most likely be more filings made with the MoE for UAE-centric transactions which brings the UAE's competition landscape into alignment with international practices."
The UAE's new merger control rules resemble regulations in western nations like the UK, where there is a 25% market dominance threshold. Pre-merger notification rules also mirror EU and US systems, where companies must notify regulators in advance, with penalties for non-compliance.
While the US and EU also assess mergers based on potential future competition, the UAE's approach remains focused on existing market control, marking a step towards global best practices in ensuring fair competition.
