UAE’s Commercial Companies Law Amendments: Corporate Structuring and M&A Implications

The UAE’s 2025 amendments to the Commercial Companies Law enhance flexibility for onshore companies by introducing redomiciliation with continuity of legal personality, expanded constitutional rights, multiple share classes, and clearer in-kind contribution rules.

The UAE has introduced targeted amendments to its Commercial Companies Law under Federal Decree Law No. 20 of 2025, refining the framework originally established under Federal Decree Law No. 32 of 2021. While the changes are not a wholesale reform of the regime, they represent a meaningful evolution in how onshore UAE companies may be structured, reorganized, and transacted.

Taken together, the amendments enhance flexibility in ownership arrangements, recognize continuity-based reorganizations, and strengthen the statutory basis for certain transaction mechanics traditionally addressed only through private contractual arrangements. For founders, family businesses, corporate groups, and investors, these developments materially expand the structuring toolkit available within the UAE mainland framework.

This article analyzes the amendments from two perspectives: corporate structuring and M&A execution.

Also see: Commercial Companies Law After Four Years: What Businesses Need to Know

Redomiciliation and continuity of legal personality

One of the most significant reforms is the formal recognition of redomiciliation within the UAE while preserving continuity of legal personality.

Under the amended framework, a company may transfer its commercial registration between Emirates or between the mainland and a free zone without dissolving and re-incorporating. The entity remains legally the same, with its rights, obligations, contracts, and assets continuing uninterrupted, subject to regulatory and shareholder approvals.

Historically, similar outcomes required asset transfers, contractual novations, employee migrations, and eventual liquidation of the original entity. That approach introduced cost, operational disruption, and counterparty risk. The new mechanism represents a shift toward continuity-based corporate mobility within the UAE.

From a structuring standpoint, this reform supports:

• Intra-group rationalization and simplification;
• Relocation of operations for regulatory or licensing alignment;
• Strategic repositioning between mainland and free zones;
• Pre-transaction restructuring in anticipation of an acquisition or exit; and
• Long-term succession planning and ownership realignment.

The practical impact will depend on implementing regulations and administrative practice across authorities, including how regulators and counterparties approach approvals and procedural sequencing.

Enhanced constitutional flexibility

The amendments expressly permit certain rights traditionally housed in shareholders’ agreements to be embedded directly in a company’s memorandum or articles of association. This includes drag-along and tag-along rights, as well as mechanisms governing share treatment upon the death of a shareholder.

This development brings the mainland framework closer to international corporate practice. Historically, majority-minority protections were primarily contractual, and enforcement in certain scenarios could present practical challenges. By allowing such mechanisms to be incorporated into constitutional documents, the law strengthens their statutory footing.

For founder-led businesses, joint ventures, and minority investment structures, this reform may:

• Increase enforceability of exit mechanics;
• Reduce overreliance on purely contractual remedies;
• Facilitate long-term ownership planning within family enterprises; and
• Support smoother control transfers in acquisition scenarios.

However, implementation risk remains a consideration. Share transfers and amendments to constitutional documents typically involve notarial procedures and regulatory processes. Even with embedded drag or tag rights, execution will depend on compliance with procedural requirements and administrative practice.

Recognition of multiple share classes

The amendments introduce an explicit legal basis for issuing different classes of shares in onshore companies, allowing variation in economic and governance rights, including voting, dividend entitlements, and redemption features.

This narrows the structural gap between mainland companies and free zone entities such as those established in the Dubai International Financial Centre or Abu Dhabi Global Market.

The ability to structure differentiated equity supports:

• Growth-stage investment rounds;
• Preferred equity structures;
• Minority protection arrangements;
• Staged capital raises; and
• Complex joint ventures.

Nevertheless, free zone vehicles may continue to be preferred in certain scenarios where parties prioritize common law–based corporate jurisprudence, streamlined share transfer processes, or more established enforcement frameworks.

In-kind capital contributions

The amendments clarify the framework governing non-cash capital contributions, reinforcing valuation standards and accountability mechanisms.

Although in-kind contributions were previously possible, enhanced clarity may increase their practical use in:

• Founder contributions of intellectual property or operational assets;
• Internal reorganizations;
• Asset roll-ups into holding structures; and
• Pre-transaction capital restructuring.

For transaction structuring, this reform strengthens the credibility of share-for-asset arrangements and vendor rollover mechanics, particularly where equity is issued as consideration.

Clear valuation methodology and early alignment between parties will remain critical, particularly in deals involving minority shareholders or lender scrutiny.

Procedural modernization

The express recognition of electronic authentication of constitutional documents reflects a broader modernization effort. While procedural in nature, this reform may improve efficiency in multi-step restructurings and transactions involving foreign shareholders.

For international groups, the ability to streamline documentation processes could reduce friction in cross-border governance exercises.

M&A implications

Beyond corporate structuring, the amendments carry practical consequences for transaction design and execution.

Strengthening exit mechanics

By allowing drag-along and tag-along provisions to be embedded in constitutional documents, the law enhances statutory support for control transfers and coordinated exits.

Pre-emption rights remain the default position under the Commercial Companies Law. However, constitutional documents may now incorporate agreed carve-outs or waivers in defined scenarios. This enables more robust alignment between corporate mechanics and transaction documentation.

For M&A practitioners, this development affects:

• Control acquisitions involving minority shareholders;
• Growth equity investments;
• Partial exits; and
• Private equity-backed transactions.

That said, not all minority protection tools are expressly addressed in the legislation. Put and call options, compulsory transfer provisions upon default, and other bespoke rights may continue to rely on contractual frameworks.

Execution risk is not eliminated. Share transfers remain subject to regulatory filings and notarial procedures, which may affect deal sequencing and closing mechanics.

Continuity-based transaction structuring

Redomiciliation and streamlined conversion between legal forms introduce new pre- and post-completion structuring options.

In practice, these tools may be deployed:

• As conditions precedent to reposition a target into a preferred jurisdiction;
• As post-completion integration steps within a buyer’s group; or
• To convert LLCs into private joint stock companies in preparation for capital raises or staged exits.

From a risk allocation perspective, transaction documents may need to address timing, regulatory approvals, and allocation of implementation responsibility.

Private joint stock companies and liquidity pathways

The amendments allow private joint stock companies to conduct private placements on UAE markets, subject to regulatory oversight.

This development introduces an intermediate liquidity option between private M&A and full public offerings. It may support:

• Partial exits;
• Minority sell-downs;
• Growth capital raises; and
• Pre-IPO positioning strategies.

For founder-led and private equity-backed companies, this adds flexibility to exit planning and capital structuring.

Strategic considerations

The cumulative effect of the amendments is to make the onshore UAE framework more adaptable across the corporate lifecycle. Companies may now rely less heavily on offshore or free zone holding structures purely to achieve enforceable exit mechanics or differentiated share rights.

However, practical implementation will remain shaped by regulatory guidance, notarial processes, and market practice. Careful drafting, sequencing, and procedural planning will continue to be essential in both structuring and transaction contexts.

For corporate groups, founders, and investors operating in the UAE, the amendments represent a maturation of the mainland regime. The reforms do not eliminate complexity, but they expand the range of credible structuring and transaction pathways available within the UAE legal system.

Corporate structuring and M&A execution in the UAE are evolving rapidly under the 2025 amendments to the Commercial Companies Law. Our advisory teams combine legal, tax, and transactional expertise to help businesses assess redomiciliation strategies, optimize ownership structures, and design enforceable exit and investment frameworks tailored to the UAE’s regulatory environment. To discuss how these reforms may affect your structuring or transaction plans, please contact us at dubai@dezshira.com. 

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