Regulatory update – UAE

The changes enhance corporate flexibility, shareholder protection, and transaction structuring options.

Key updates include:

• Redomiciliation with continuity of legal personality
  Companies may transfer their registration between Emirates and between mainland and free zones while remaining the same legal entity, subject to regulatory approvals.
• Enhanced shareholder exit and succession mechanisms
  Limited liability companies and private joint stock companies may now include drag-along, tag-along, and succession provisions directly in their constitutional documents.
• Introduction of multiple classes of shares
  Onshore companies may issue different share classes with differentiated economic and governance rights, supporting more sophisticated investment and joint-venture structures.
• Strengthened framework for in-kind capital contributions
  Clearer valuation rules apply to non-cash contributions, with partner liability for overvaluation.
• Recognition of non-profit companies
  A new onshore structure is introduced for entities that reinvest profits to achieve stated objectives.
• Clarified application of the law to free zone operations
  The amendments confirm the treatment of free zone branches and representative offices operating onshore, supporting dual-licensing and hybrid models.
• Procedural modernization
  Electronic authentication of constitutional documents is expressly recognized, subject to authority requirements.

Impact:

These amendments expand the range of structuring, investment, and exit options available to UAE companies, reduce reliance on offshore or free-zone holding structures in some cases, and support more efficient corporate reorganizations and M&A transactions. Practical implementation will continue to depend on regulatory practice and forthcoming implementing regulations.