UAE Company Law Changes 2026: What Is New and What to Do

What changed in UAE company law? The short answer

Federal Decree-Law No. 20 of 2025 rewrote parts of the UAE Commercial Companies Law for the first time since 2021. Mainland LLCs can now issue different classes of shares, put drag along and tag along rights into their memorandum of association, and move their registration to another emirate or between the mainland and a free zone without closing down. The decree was published in the Official Gazette on 14 October 2025 and most law firms date it in force from 15 October 2025.

Nothing here forces an existing company to act by a fixed date. The changes are options, not obligations. But three groups of owners should look at them now: anyone raising money or bringing in a partner, anyone with a free zone company that wants to sell on the mainland, and anyone whose memorandum of association still says nothing about what happens when a partner leaves or dies.

This article is general information, not legal advice. Several parts of the decree depend on Cabinet rules that are still being issued, so confirm the current position with the Ministry of Economy, your licensing authority or a qualified lawyer before you act. Checked 9 November 2026.

UAE Commercial Companies Law 2026: the changes at a glance

Federal Decree-Law No. 20 of 2025 amends Federal Decree-Law No. 32 of 2021 on Commercial Companies, the law that governs mainland companies in every emirate. It was issued on 1 October 2025. One firm, Clyde & Co, dates its effect from 15 November 2025 rather than 15 October, so if a date matters to a transaction, check the Gazette text.

Share classes for UAE LLCs: investors can now get different rights

Before the amendment, every share in a mainland LLC carried the same rights. A founder who put in the idea and an investor who put in AED 2 million held identical shares, and anything different had to live in a side agreement that the licensing authority never saw.

Now an LLC can split its shares into classes, for example Class A and Class B, with different rights over:

• Voting. Founders keep control while an investor holds a bigger economic stake.
• Dividends. One class is paid first, or at a fixed rate.
• Liquidation. One class gets its money back first if the company is sold or wound up.
• Redemption. The company can buy a class back on agreed terms.

Two conditions apply. The classes and their rights must be written into the memorandum of association, and they must be recorded in the commercial register. A share class that sits only in a shareholders' agreement does not count.

So what: if you plan to raise money, an LLC can now carry the structure investors expect, without first moving the company to ADGM or DIFC. That saves time and fees.

Drag along and tag along rights in a UAE memorandum of association

These two clauses decide what happens when a company is sold.

• Drag along lets the majority force the minority to sell on the same terms, so one small holder cannot block a sale.
• Tag along lets the minority join a sale on the same terms, so the majority cannot sell out alone and leave them behind.

Both used to live in shareholders' agreements, which are hard to enforce against the company register. The amendment allows LLCs to write them into the memorandum of association and private joint stock companies to write them into their articles of association.

One limit remains. The statutory right of first refusal for LLC partners still applies, so the drafting has to fit around it. A drag along clause that ignores pre-emption can fail at the moment it is needed.

Re-domiciliation in the UAE: move your company without closing it

This is the change most business owners ask us about. The new Article 15 bis allows a company to transfer its registration from one licensing authority to another and keep the same legal person. Under the old rules, moving meant closing the company and opening a new one, with new bank accounts, new visas and new contracts.

Which moves the law allows

• From one emirate to another, for example Sharjah mainland to Dubai mainland.
• From a free zone to the mainland, which is the move most companies want, because a free zone company cannot trade directly on the UAE market.
• From the mainland to a free zone.
• From one free zone to another.

What a move needs

1. A shareholders' resolution approving the move. A joint stock company needs a special resolution of its general assembly.
2. Approval from the authority you are leaving and the authority you are joining.
3. A clean file: no blocking annotations on the licence and no unresolved violations.
4. An activity that the new authority can license.

Watch the status of the rules. The law allows the move, but the step by step procedure depends on Cabinet rules issued with each licensing authority. As of mid 2026, commentators reported rules in place for some routes and not yet for others, and DIFC and ADGM follow their own regulations. Ask the authority on both sides before you plan around a date.

Also expect your bank to run its know your customer checks again. Same company, new registration details.

Paying your share capital with assets instead of cash

Founders can contribute equipment, property, intellectual property or another asset as share capital instead of cash. The amendment tightens one rule: the asset must be valued by one or more accredited valuers. If there is no accredited valuation, the contribution is invalid.

This matters most when a founder brings an existing business, software or a fleet of vehicles into a new LLC. Order the valuation before you sign the memorandum of association, not after.

Other changes: non-profit companies, private placements and succession

• Non-profit companies. For the first time the law allows companies whose surplus must go to their stated purpose rather than to shareholders. The detailed rules depend on Cabinet decisions that are still pending, so this is not a route you can use yet.
• Private placements. A private joint stock company can now raise capital by private placement under conditions set by the Securities and Commodities Authority. Public offerings stay limited to public joint stock companies.
• When a partner dies. LLCs and private joint stock companies can set out in their constitutional documents how the shares of a deceased shareholder are bought, at an agreed value or one set by a court. For a family business this can prevent a deadlock with heirs.

Does the new company law apply to free zone companies?

Mostly not directly. A free zone company follows the regulations of its own free zone first, and the Commercial Companies Law applies where those regulations are silent. That is why IFZA, Meydan, RAKEZ and the other free zones already allowed some of these tools before the mainland did.

The amendment still reaches free zone companies in two ways. Re-domiciliation opens a legal route to the mainland, and in Dubai the Free Zone Mainland Operating Permit, launched on 8 October 2025, already lets a free zone company work on the mainland without moving. If you are choosing between the two, read mainland vs free zone in the UAE first.

Other UAE regulatory changes for companies in 2026

The company law is one of several rule changes landing on UAE companies at the same time. These are the ones with dates attached.

A new share class or a re-domiciliation also changes your ownership record, so the beneficial owner register has to follow it. Plan the two together.

What to do now: a checklist for UAE company owners

1. Read your memorandum of association. Does it say what happens when a partner wants out, sells, or dies? If not, the new law lets you fix that in the document the authority actually registers.
2. Planning to raise money in the next 12 months? Decide whether investors will need a separate share class, and amend the MOA before the term sheet, not during it.
3. Free zone company with mainland clients? Compare three options: the Dubai mainland permit, re-domiciliation, or a separate mainland company. Price all three.
4. Contributing assets instead of cash? Book an accredited valuer first.
5. Changing ownership? Update the beneficial owner register in the same step.

Entityz has set up more than 500 businesses in the UAE and supports each company for 12 months after its licence is issued. Our MOA and AOA drafting team handles share classes and exit clauses, and our mainland company setup and free zone company setup teams handle the move between the two.

General information, not legal advice. The changes above come from Federal Decree-Law No. 20 of 2025 amending Federal Decree-Law No. 32 of 2021 on Commercial Companies, as summarised by Gibson Dunn, Al Tamimi & Company, Clyde & Co, Cleary Gottlieb and Norton Rose Fulbright. Several provisions depend on Cabinet rules that are still being issued. Checked 9 November 2026.