The UAE government has made changes to the Commercial Companies Law as part of efforts to improve competitiveness and provide a flexible and robust legal environment.
It has issued a federal decree-law that has introduced the concept of a non-profit company, which reinvests its net profits in achieving its stated objective without distributing them to partners or shareholders, the Government Media Office said on Tuesday.
“This further enables social and developmental sectors to operate within a flexible and transparent institutional framework,” it said in a statement.
The regulation also provides advanced capital structure options through multiple categories of shares and stakes. These cover rights such as voting, profit distribution, priority of redemption and liquidation, as defined in the articles of incorporation or bylaws.
“This represents a significant step forward in corporate governance and supports private capital investment,” the statement said.
Another amendment regulates delocalisation of UAE companies – overseeing registration changes between the seven emirates and financial free zones, while maintaining legal status.
“It establishes clear requirements and procedures for the process, which enhances the free movement of businesses, expands the scope of economic activities within the UAE, reduces commercial disputes, and protects the rights of minority shareholders,” the statement said.
It also permits private joint-stock companies to offer their securities for private subscription on a national financial market. This opens a new financing option for companies without requiring them to convert into public joint-stock firms.
The legislation also approves a “range of modern contractual mechanisms for managing shares and stocks, including tag-along and drag-along transactions, as well as regulating procedures for disposition in the event of the death of a partner or shareholder, thus strengthening the stability and continuity of companies”.
Tag-along protects minority investors by letting them sell on the same terms as majority shareholders, while drag-along lets majority owners force minorities to join a sale on identical terms.
It also set out standards for valuing in-kind shares, and accrediting appraisers.
The UAE's Commercial Companies Law, issued in 2021, allowed for the full foreign ownership of onshore companies, removing the requirement for a major local shareholder. The legislation was part of efforts to boost the country's competitiveness to attract businesses and foreign investment.
The country granted nearly 40,000 commercial licences in key tourism-related industries from the start of 2025 until mid-September, reflecting the country's continued economic momentum, Economy Minister Abdulla bin Touq said this year.
The 39,546 licences amounted to a nearly four-fold increase from the same period in 2020, Mr Bin Touq said. They were in tourism and digital tourism, hospitality, aviation, air transport and aviation technology.
The UAE ranked 10th globally for inbound foreign direct investment last year, with Dh167.6 billion ($45.6 billion) in FDI inflows, according to the United Nations Conference on Trade and Development.
The amount marks a 48 per cent annual growth, with the UAE accounting for 37 per cent of all FDI inflows into the region. The country also ranked second globally, after the US, in the number of newly announced foreign direct investment projects. The country aims to increase FDI to Dh1.3 trillion by 2031.
To boost FDI, the UAE has also unveiled other initiatives such as reduced visa restrictions and incentives for small and medium enterprises.
It also unveiled the NextGen FDI programme, which seeks to speed up licensing, increase the issuance of bulk or golden visas, improve banking services and provide commercial and residential lease incentives for technology companies seeking to relocate to the country.
The UAE's signing of Comprehensive Economic Partnership Agreements with its trade partners has also supported the inflow of investments. Launched in 2021, Cepa deals reduce tariffs and remove trade bottlenecks and boost bilateral investment in priority areas.
