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A new law known as the Federal Law By Decree No. 32 of 2021 on Commercial Companies (New Companies Law) was unveiled by the government on September 20, 2021. Federal Law No. 2 of 2015 on Commercial Companies (Existing Law) will be superseded by this law. January 2, 2022 is when the New Companies Law will go into effect. It is noteworthy that the objective is to enhance the situation for all parties by optimizing the management of foreign ownership of corporations, guaranteeing improved corporate governance, and providing additional safeguards for minority stakeholders.

The new UAE Company Law is bringing about some changes in the business world. Nowadays, it’s easier for businesses to split up into divisions and assign responsibilities and resources appropriately. Furthermore, these new entities known as special purpose acquisition companies (SPACs) and special purpose vehicles (SPVs) have been discussed. They’re also simplifying the process for companies to go public.

Additionally, the New Companies Law reaffirms the principle of easing recently introduced restrictions on foreign ownership and introduces provisions that allow a joint stock company to specify the value of its shares, thereby eliminating the previous requirement of a minimum of AED 1. Clients of Khairallah Law Firm who are handling corporate legal matters in the UAE will find this update especially helpful.

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uae company law

UAE company law

Understanding Corporate Law in Dubai under the UAE Company Law.

The company law in Dubai regulates the formation, ownership, and administration of businesses in Dubai and the other Emirates. Much of Federal Law No. 8 of 1984, which dealt with corporations in the United Arab Emirates, has been superseded by a new Commercial Companies Law.

The Companies Law is all about keeping the investment environment in the UAE welcoming and helping the Emirates grow. If you’re thinking of starting a business here, especially in Dubai, keep in mind that foreign ownership is limited outside the Free Zones. But don’t worry too much; the new Companies Law usually aligns well with the rules in these special areas.

One of our lawyers in Dubai is here to help you out. They’ll give you all the details you need about the laws and what you need to know for investing, depending on where you’re planning to start your business in Dubai.

Managing a Company in the UAE

Limited liability companies are still the top pick for businesses in the UAE. To get one going, you’ll need to hop on over to the Commercial Register and make sure you’ve got the right number of shareholders and enough capital in the bank. But here’s the cool part: under the new companies’ law, even if you’re just flying solo or a single company, you can be the sole shareholder, which wasn’t an option before. It’s a pretty big deal in the world of company law in UAE and changes how things operate for companies.

Being a company director in the UAE is much like it is elsewhere. You’ve got to make decisions that benefit the company, and you can’t wiggle out of personal responsibility by adding some fancy clause to the company’s memorandum. If you need more details about what being a director involves, one of our lawyers in Dubai can walk you through it.

In today’s corporate landscape, both limited liability companies and joint-stock companies have the green light to act as holding companies, using their subsidiaries to drive business growth. This shift spells good news for big corporations, giving them the chance to rethink how they’re positioned in the market.

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Understanding UAE Company Law: Which Regulations Apply?

The UAE new company law, known as Federal Decree Law No. 32 of 2021 on Commercial Companies, applies to any business operating in commercial, financial, industrial, agricultural, real estate, or other economic activities on the mainland. Article 4 of this law outlines which companies are exempt from its regulations.

uae company law

UAE company law

Are Foreigners Allowed to Own Companies in the UAE?

In the updated UAE Company Law, the UAE keeps most of its rules around foreign investments intact. It means that foreigners can only own up to 49% of a company, with the other 51% needing to be owned by a UAE national.

The goal of the Companies Law is to make sure that how businesses operate in the UAE lines up with what’s happening in other important business places around the globe. Plus, it’s all about making sure that companies are accountable and transparent in what they do.

The recent changes that let certain types of companies set up shop outside of the Free Zones, like right on the mainland (onshore), show how the UAE is all about supporting businesses and being flexible. If you need to know more about company law and the rules for investing in the UAE, just reach out to our law firm in Dubai. We’re here to help!

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Understanding LLC in UAE Company Law

In the UAE mainland, the go-to choice for setting up a company is usually the Limited Liability Company (LLC). The folks over at the DED, who work under government authority, handle all the licensing for LLCs. They’re also the ones in charge of making sure that different types of economic activities are classified and regulated properly. All of this falls under the umbrella of UAE LLC Company Law.

Compared to businesses in the GCC or Free Zones, an LLC in the UAE enjoys greater freedom. For instance, there are no limitations on where it can conduct business or easily own real estate. Furthermore, the quantity of visas it can obtain is unlimited. LLCs don’t have to worry about meeting a minimum share capital requirement, in contrast to certain other kinds of businesses. Furthermore, mainland businesses such as LLCs do not have to pay the standard 5% customs duty when importing goods.


1- What is corporate law in Dubai?

UAE corporate law governs the governance, finance, and power of corporations in the country through UAE law. Each emirate has its own basic corporate code. This provides a panoramic view of Dubai.

2- What are the new rules for companies in the UAE?

The 14 Sectors for 2024 and 2025: Starting in 2024, companies with 20 to 49 workers must hire one UAE national, with a second to follow in 2025. Two are required for various industries, including real estate, education, construction, and healthcare. Failure to meet the quota will result in AED 96,000 in 2024 and AED 108,000 in 2025.

3- Understanding Article 222 of the UAE Companies Law?

Article 222 of the UAE Companies Law prohibits joint stock companies from providing financial assistance to any shareholder to enable them to hold shares, bonds, or sukuk issued by the company.

4- Is it Legal for Companies to Impose Bans on Employees in the UAE?

The labor ban could be applied to the employer if: Exiting the employment agreement by the employee illegally, or labor provisions noncompliance On the other hand, a labor ban could be implemented if an employee: Contravening any measures listed in Article 120 of the UAE


You can rely on the Khairallah Law Firm team for assistance with any company law issues. We are regarded as some of the Best Lawyers in Dubai, and we are available to assist you. Please contact us at any time; we are dedicated to making every effort to fulfill your needs.

Have More Understanding About: Dubai Company law