Major 2026 Amendments to UAE Commercial Companies Law
The UAE has once again reinforced its position as a global business hub with the issuance of Federal Decree-Law No. (20) of 2025, introducing targeted yet powerful amendments to Federal Decree-Law No. (32) of 2021 on Commercial Companies. Rather than a wholesale rewrite, the amendments focus on clarity, flexibility, governance continuity, and corporate mobility, addressing long-standing practical issues faced by businesses operating across mainland, free zones, and financial free zones. At AMA Global Audit Tax Advisory, we have reviewed the amendments in detail. Below, is a structures breakdown of the most impactful changes and what they mean for UAE businesses, investors, and multinational groups. 1. Clear jurisdictional boundaries for Mainland & Free Zone companies One of the most significant amendments relates to the legal treatment of companies operating inside and outside free zones. The updated law confirms that the Commercial Companies Law applies to: Free zone companies remain governed by their respective regulations as long as their operations remain inside the zone. Importantly, all companies incorporated in the UAE — including free zone companies — hold UAE nationality. Why this matters: Businesses operating hybrid models (onshore + free zone) now have clearer compliance requirements and better integration pathways across UAE jurisdictions. 2. Introduction of Non-Profit companies in the UAE For the first time, UAE company law explicitly permits non-profit companies, where: Impact: This opens a clear legal pathway for foundations, professional bodies, social enterprises, and impact-driven organizations, supporting the UAE’s broader ESG and social development agenda. 3. Enhanced Contractual flexibility: Drag-Along, Tag-Along & Succession Rules The Amendment allows mainland LLCs and Private Joint Stock companies to incorporate sophisticated shareholder protections directly into their constitutional documents, including: Impact: This aligns UAE entities with international M&A and private equity standards, significantly reducing transaction risk and shareholder disputes. 4. Introduction of multiple share classes for LLCs LLCs may now issue different classes of shares, allowing: All such rights must be recorded in the Commercial Register, with further Cabinet regulations to follow. Why this is a game-changer: This reform brings venture capital–style structuring into the UAE mainland environment, supporting investors, startups, family businesses, and growth-stage companies. 5. Stricter Standards for In-Kind Capital Contributions The amendment tightens governance around in-kind capital by requiring: Impact: This protects shareholders and reduces the risk of disputes about inflated or inaccurate capital contributions. 6. Public & Private offering opportunities revalidated The amendment confirms that: Impact: Private companies gain more structured access to capital markets while maintaining regulatory oversight. 7. New Article (15 bis): Transfer of Commercial Registration within UAE jurisdictions A landmark addition, Article (15 bis) allows companies to transfer their commercial registration between UAE licensing authorities, including: The company retains its: Transfers require: Important:The law only permits re-domiciliation within UAE jurisdictions. It does not explicitly authorize importing foreign entities through re-domiciliation. 8. Updated Governance Rules for LLC Managers and Boards To prevent leadership gaps, the law now provides that: Impact:These rules minimize governance gaps and provide stability for operational decision-making. Conclusion: A More Agile, Transparent, and Globally Aligned Corporate Framework Federal Decree-Law No. (20) of 2025 is a precision reform — modern, pragmatic, and aligned with global best practices. It strengthens UAE company law by: At AMA Global Audit Tax Advisory, our corporate specialists are ready to help you in: 📩 Connect with our advisory team to evaluate how these amendments affect your business structure and future plans. Monish MohanMonish Mohan is a versatile and accomplished Auditor, VAT Consultant, Finance and Accounts Professional offering over 18 years of experience in UAE VAT, Audit & Assurance, Finance management Advisory & Accounting & bookkeeping. amaaudit.com/