Civil Law Foundations

The UAE operates a civil law system, rooted primarily in codified legislation that draws significantly from Egyptian civil law (itself derived from French civil law principles) alongside an overlay of Islamic (Sharia) principles, particularly in areas of personal status, inheritance and certain aspects of commercial law. The primary codified instruments include the Civil Transactions Law (Federal Decree Law No 5 of 1985, as comprehensively amended by Federal Decree Law No 25 of 2025 coming into force on 1 June 2026) and the Commercial Transactions Law (Federal Law No 18 of 1993). There is no doctrine of binding judicial precedent as understood in common law systems, although courts give significant weight to decisions of higher courts, particularly the Federal Supreme Court.

Federal and Emirate Court Structure

The UAE constitution establishes a dual court structure comprising a federal judiciary and independent emirate-level judiciaries. The federal court system consists of the Federal Supreme Court (the apex court, sitting in Abu Dhabi), Federal Courts of Appeal and Federal Courts of First Instance. However, the emirates of Abu Dhabi, Dubai and Ras Al Khaimah have each exercised their constitutional right to maintain independent local court systems, with their own courts of first instance, courts of appeal and courts of cassation. In practice, the majority of commercial litigation is conducted before the Dubai and Abu Dhabi local courts.

Financial Free Zone Courts

The Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) each maintain separate common law court systems operating in English, with jurisdiction over civil and commercial matters arising within those zones. The DIFC courts apply common law principles as developed in England and Wales and are widely regarded as a sophisticated dispute resolution forum. Both the DIFC courts and the ADGM courts regularly enforce each other’s judgments and have entered into recognition arrangements with various international courts, adding significantly to their utility in cross-border disputes.

General Framework

Foreign investment in the UAE mainland is governed by the Commercial Companies Law (Federal Decree Law No 32 of 2021 as amended by Federal Decree Law No 20 of 2025) with implementing Cabinet decisions. The current framework permits 100% foreign ownership across the majority of commercial activities on the mainland. The limitation on foreign ownership is defined by reference to a “List of Activities with Strategic Impact” established by Cabinet decision (No 55 of 2021), which identifies the activities reserved for UAE national ownership or UAE national-majority ownership; all activities not appearing on the Negative List may be conducted through a wholly foreign-owned entity.

The Negative List

The Negative List encompasses activities considered to be of strategic national significance, including certain defence and security activities, oil exploration concessions, specific money exchange and financial services segments, and other designated sectors. For activities on the Negative List, Emirati ownership requirements remain in place, and the degree of permissible foreign participation (if any) is specified by the relevant Cabinet decision. Foreign investors should verify the current status of their intended activity against the Negative List at the time of application, as the list is subject to periodic revision by the Cabinet.

Sector-Specific Regulatory Approvals

For regulated industries, including banking and financial services, insurance, securities and investment, telecommunications, healthcare and education, a licence from the relevant sector regulator is required in addition to the standard licence from the emirate’s licensing authority. Each regulator applies its own criteria, including fit-and-proper assessments, minimum capital requirements, governance standards and local substance conditions. Sector regulatory approval must generally be obtained before or in parallel with the main commercial licence application. Free zones, by contrast, permit 100% foreign ownership as a baseline, with no nationality restrictions, though free zone entities are generally limited to conducting business within the free zone or internationally.

The standard procedures generally applicable to all investors establishing a mainland presence in the UAE are as follows.

The Licensing Process

An investor wishing to establish a mainland presence must apply to the relevant emirate’s Department of Economic Development (DED) or equivalent authority. The principal steps are:

• reserving a trade name;
• obtaining initial activity approval;
• preparing and notarising a memorandum of association (MOA) before a UAE notary;
• submitting shareholder identification documentation; and
• paying the prescribed fees.

Where the activity requires a third-party approval, such as from the Central Bank or the Securities and Commodities Authority (SCA), that pre-approval must be obtained alongside the DED application. A standard limited liability company (LLC) can typically be established within two to four weeks; regulated activities may take considerably longer depending on the regulating authority.

Post-Licensing Obligations

Once the trade licence is granted, the company must register with the Federal Tax Authority for corporate tax purposes and, where applicable, for VAT. Employers must also register with the Ministry of Human Resources and Emiratisation (MOHRE) before hiring employees and must comply with beneficial ownership filing obligations by registering ultimate beneficial owner (UBO) information with the licensing authority within prescribed timeframes.

Consequences of Operating Without Approval/Licence

Conducting commercial activity without a valid trade licence or the necessary regulatory approval is a criminal offence under applicable federal and emirate legislation. Penalties include administrative fines, mandatory cessation of operations, asset seizure and, in serious cases, criminal prosecution of responsible individuals, which may result in imprisonment. In regulated sectors, unlicensed activity may additionally attract regulatory fines, disgorgement of profits and public censure. Contracts entered into in the course of unlicensed operations may be challenged as void or unenforceable before the UAE courts.

The standard procedures generally applicable to all investors establishing a mainland presence are as follows.

Standard Licensing Conditions

The relevant licensing authority retains discretion to impose conditions on the grant of a licence. In practice, common conditions include minimum paid-up capital thresholds (which vary by activity type and emirate), the appointment of a general manager and the maintenance of an address within the licensed emirate. The company’s licence must at all times accurately reflect its permitted activities, address and organisational details.

Emiratisation Obligations

All employers with sufficient workforce size and operating in applicable sectors are subject to Emiratisation requirements, which mandate the hiring of UAE nationals at prescribed ratios or minimum numerical targets. These obligations are administered by MOHRE and enforced through financial contributions including the Emiratisation Development Contribution for each unfilled quota position. Emiratisation targets have been progressively expanding in scope and depth, and compliance is a significant operational consideration for any business employing staff in the UAE.

Regulated Sector and Project Commitments

In regulated sectors, the regulating authority may impose additional binding conditions as part of the authorisation process, such as maintaining qualified management and operational functions within the UAE, ongoing capital adequacy compliance and periodic regulatory reporting. Investors participating in government concessions or public-private partnership projects may also be required to agree to local content, technology transfer and workforce training and development commitments as part of the concession or project agreement.

Administrative Court Challenge

Decisions refusing a licence or investment approval are subject to challenge before the UAE administrative courts. At the federal level, the Federal Administrative Court has jurisdiction to review administrative decisions on grounds of illegality, procedural irregularity and disproportionality. In Dubai, the Dubai Administrative Court hears challenges against decisions of local government authorities and licensing bodies.

The time limit for commencing an administrative challenge is generally 60 days from the date of publication, notification of the decision to the investor or the date on which the investor is deemed to have had certain knowledge of it. This deadline may be interrupted by filing a formal grievance with the relevant administrative authority; if no decision on the grievance is issued within 60 days, it is deemed rejected, and the litigation period begins to run. Given these strict deadlines, specialist legal advice should be sought promptly.

Internal Reconsideration and Free Zone Appeals

Most licensing and regulatory authorities provide an internal reconsideration or administrative appeal mechanism, and investors are generally expected – and in some cases, required – to exhaust these internal remedies before approaching the courts. Within the DIFC and ADGM, administrative and regulatory decisions are subject to their own internal appeal procedures, with review before the relevant free zone bodies. The scope of judicial oversight of regulatory decisions is generally confined to questions of lawfulness and procedural compliance rather than a full examination of the underlying merits of the decision.

Limited Liability Company (LLC)

The LLC is the most widely used corporate structure for mainland commercial activity and is governed by the Commercial Companies Law. An LLC may have between one and 50 shareholders, with each shareholder’s liability limited to their capital contribution. There is no prescribed minimum share capital at the federal level, though specific activity types may attract minimum capital requirements under sector regulation. The LLC is suited to the broadest range of commercial purposes – trading, services, manufacturing, joint ventures and general market entry – and is the standard vehicle of choice for foreign investors establishing a wholly owned or jointly owned mainland presence.

Public Joint Stock Company (PJSC)

A PJSC is a company whose shares may be offered to the public and listed on the Abu Dhabi Securities Exchange (ADX) or the Dubai Financial Market (DFM). It requires a minimum of five founding shareholders and a minimum share capital of AED30 million for listed companies, with higher thresholds applicable in certain regulated sectors. PJSCs are subject to comprehensive corporate governance requirements under the SCA’s Corporate Governance Code and are the appropriate vehicle for businesses seeking access to public equity capital markets or looking to raise capital from a broad investor base.

Private Joint Stock Company (PrJSC)

A PrJSC has a similar structure to a PJSC but its shares are not offered to the public and may not be listed on any exchange. It requires a minimum of two shareholders and a minimum share capital of AED5 million. This vehicle is typically used by larger private enterprises and family-owned business groups, and as a holding structure or a transitional vehicle for companies contemplating a future public listing.

Branch of a Foreign Company

A foreign company may establish a branch on the UAE mainland. A branch is not a separate legal entity; the parent company is directly and fully liable for all obligations incurred by the branch. In general, foreign branches are no longer required to appoint a local service agent (LSA). However, certain regulated or restricted activities may still require the appointment of an LSA, who must be either a UAE national individual or a company wholly owned by UAE nationals. The LSA’s role is limited to administrative and governmental liaison functions, and the LSA does not hold any ownership interest in the branch or entitlement to its profits.

A branch is most suited to foreign companies undertaking a defined project or specific activity in the UAE without establishing a locally incorporated entity. A branch may also be established as a representative office, in which case its activities are limited to marketing and promotional functions and facilitating the parent company’s business relationships and contracts within the UAE.

Free Zone Entities

Each UAE free zone offers its own categories of legal entity, most commonly a free zone establishment (FZE, with a single shareholder) and a free zone company (FZCO, with multiple shareholders). These entities benefit from 100% foreign ownership, full repatriation of profits and capital, and potential tax advantages. However, free zone entities are generally restricted from conducting direct commercial activities with mainland UAE customers and must work through a separately licensed mainland entity or appointed distributor to do so.

Key Steps

Establishing an LLC involves the following principal steps.

• The applicant must first reserve a trade name with the relevant DED. The proposed trade name must comply with applicable naming regulations and must not contravene public morals, imply affiliation with a government authority or otherwise mislead the public.
• A follow-up receipt in respect of the proposed activities, shareholder(s) and general manager must then be obtained. This confirms that the proposed activities are permissible and, where applicable, identifies any additional approvals or pre-approvals required from the relevant sector regulator.
• The MOA, setting out the company’s name, objects, share capital, shareholders and management arrangements, must be drafted, executed by all shareholders and notarised by a UAE notary.
• The company must secure premises suitable for its licensed activities. Depending on the nature of the activity and the relevant DED requirements, this may consist of a physical office, virtual office or flexi-desk arrangement. The lease agreement must be registered through the applicable Ejari system or equivalent tenancy registration platform in the relevant emirate.
• The notarised MOA, shareholder and manager identification documents, Ejari certificate, UBO details and any additional supporting documents must then be submitted to the relevant DED to obtain the payment voucher for licence issuance.
• Where any approval or pre-approval from a relevant sector regulator is required, such approval must be obtained prior to submission of the licensing documents to the DED for issuance of the payment voucher.
• Upon payment of the relevant DED fees, the DED issues the licence for the LLC.

Registration, Licensing and Post-Incorporation Obligations

Following issuance of the licence, the LLC must register with the Federal Tax Authority for corporate tax purposes and, where applicable, VAT purposes. The LLC must also register with MOHRE prior to employing any staff and initiate the process for opening a corporate bank account in the UAE.

The overall incorporation timeline for a standard LLC that does not require additional regulatory approvals is typically between two and four weeks.

Licence Renewal and Change Notifications

UAE mainland companies must renew their licence annually with the relevant DED, which involves fee payment and confirmation that the company’s registered particulars remain accurate. A valid Ejari certificate, or equivalent tenancy registration document in the relevant emirate, is required in order to complete the licence renewal process.

Any amendments to the company’s constitutional documents, including the MOA, must be duly notarised before a UAE notary public and filed with the relevant DED without delay. Any changes in the MOA notarised by the notary must also be filed with the relevant DED without delay.

Failure to maintain a valid and accurate trade licence or to update the company’s registered information may constitute a regulatory violation and may result in administrative fines, suspension of the company’s activities and practical difficulties in dealing with banks, government authorities and third parties.

UBO Filing Requirements

Companies must maintain an internal partners and shareholders register and a separate UBO register identifying all individuals who ultimately own or control 25% or more of the share capital or voting rights, or who otherwise exercise effective control. This information must be filed with the relevant licensing authority and updated within 15 days of any change. Non-compliance with the UBO regulations attracts administrative penalties and can affect the company’s ability to renew its licence or conduct activities.

Financial Reporting

Companies must maintain accounting records in compliance with applicable standards. Under the corporate tax regime, all taxable persons must prepare financial statements in accordance with the International Financial Reporting Standards (IFRS) or the IFRS for SMEs and file an annual corporate tax return with the Federal Tax Authority. PJSCs and PrJSCs are subject to more extensive disclosure obligations under the Companies Law, including preparation of annual audited financial statements and their presentation to the annual general meeting of shareholders.

LLC Management

An LLC is managed by one or more managers appointed by the shareholders, who may be shareholders themselves or third parties. The manager has authority to bind the company in day-to-day business within the scope of authority defined in the MOA and/or any shareholders’ resolutions. The LLC does not require a mandatory two-tier governance structure; the default is a single-tier arrangement in which the manager or board of managers exercises both executive and supervisory functions.

In practice, shareholders may also appoint a board of directors for internal governance purposes. However, unlike a general manager, directors are not registered with the relevant DED as authorised representatives of the LLC. The names and details of such directors may instead be recorded in the MOA or in a separate shareholders’ resolution.

The general assembly of shareholders retains ultimate authority over reserved matters, including approval of the company’s financial statements, declaration and distribution of profits, appointment or removal of managers and amendments to the MOA. The general assembly must convene at least once annually.

PJSC Governance

A PJSC must have a board of directors comprising no fewer than three, and no more than 11, members elected by the general assembly, unless otherwise approved by the SCA.

The board is responsible for the overall management, strategic direction, and supervision of the company and must satisfy the independence and governance requirements prescribed under the applicable SCA Corporate Governance Rules and Standards. The board typically appoints a chief executive officer or managing director to oversee the company’s day-to-day operations and executive management. While this creates a practical distinction between oversight and executive functions, the UAE PJSC governance framework does not adopt a formal two-tier board structure in the continental European sense.

Listed PJSCs are additionally required to establish specialised board committees, including an audit committee and a nomination and remuneration committee, in accordance with the applicable SCA governance regulations.

Directors’ and Managers’ Duties and Liability

Under the Commercial Companies Law, managers of an LLC and directors of a PJSC owe duties of care, loyalty and good faith to the company and its shareholders. Personal liability may arise for losses caused by fraud, undisclosed or improperly approved conflicts of interest, wilful mismanagement or conduct in excess of the authority conferred by the company’s constitutional documents.

Claims for breach of duty may be brought by the company itself, by qualifying shareholders meeting prescribed thresholds or in insolvency proceedings by a court-appointed liquidator. Criminal liability may arise where a director or manager has engaged in fraudulent conduct, misappropriation of company assets or other criminal acts in connection with the management of the company.

Shareholders’ Limited Liability and Piercing the Corporate Veil

Shareholders of an LLC, PrJSC or PJSC are not personally liable for the company’s obligations beyond their capital contributions; the principle of limited liability is fundamental to UAE corporate law.

In exceptional circumstances, however, UAE courts may disregard the company’s separate legal personality and impose personal liability on shareholders where the corporate structure has been used to perpetrate fraud, evade legal obligations or conceal improper conduct. This may arise, for example, where there has been substantial commingling of personal and company assets or affairs.

The legal basis for this principle derives from broader doctrines of good faith, abuse of rights and prohibition of fraud under UAE law, including the Civil Transactions Law, as amended by Federal Decree Law No 25 of 2025. which comes into force on 1 June 2026. The application of this doctrine by the UAE courts remains limited and strictly fact-specific.

The primary legislation governing employment in the UAE mainland private sector is Federal Decree-Law No 33 of 2021 on the Regulation of Labour Relations (the “Labour Law”), which came into effect on 2 February 2022. Since its enforcement, the Labour Law has been amended three times, with the most recent amendment in 2024.

The Labour Law is supplemented by Cabinet and ministerial decisions issued by MOHRE, which also oversees registration, compliance and dispute resolution. There is no system of collective bargaining or statutory trade union recognition in the UAE mainland; in practice, the employment relationship is governed by the Labour Law and the individual employment contract. The DIFC and the ADGM each maintain their own separate employment legislation,

All employment contracts in the UAE must be concluded in writing and registered with MOHRE using the prescribed standard form. Under the Labour Law, all contracts must be fixed-term, and the previous distinction between limited and unlimited-term contracts has been abolished; the original statutory maximum term of three years has been removed, and the parties may now agree a fixed term of any duration, with contracts being renewable upon expiry for equivalent or shorter periods. Where a contract is executed in more than one language and a dispute arises as to its interpretation, the Arabic version prevails unless the parties have expressly agreed otherwise.

The standard maximum working time is eight hours per day and 48 hours per week. During the holy month of Ramadan, working hours are reduced to six hours per day and 36 hours per week, subject to limited exceptions. Overtime work is generally permitted up to two additional hours per day and is compensated at the basic wage plus a premium of at least 25%, rising to at least 50% for overtime performed between 9 pm and 4 am. Employees are entitled to a minimum of one rest day per week and to annual leave of a minimum of 30 calendar days per year following the first year of service.

The UAE does not operate an “employment at will” system. An employment contract may be terminated by either party by serving the contractually agreed notice period, which must be no less than 30 days and no more than 90 days. If either party terminates without serving the agreed notice, it is required to compensate the other party with an amount equal to the employee’s remuneration for the full notice period or the remaining part of it.

Termination will be considered unlawful in the specific cases set out in Article 47 of the Labour Law, including where the reason for dismissal is that the employee has filed a serious complaint with MOHRE or has brought a successful claim against the employer; in such circumstances, the court may award compensation of up to three months’ wage in addition to any other entitlements.

All employees are entitled to an end-of-service gratuity upon termination, except where dismissal occurs on grounds of gross misconduct as specifically enumerated in the Labour Law. Gratuity is calculated on the basis of the last basic salary as follows: 21 days’ basic salary for each completed year of the first five years of service and 30 days’ basic salary for each subsequent completed year.

Total gratuity is capped at two years’ total remuneration. There is no formal collective redundancy procedure under UAE federal law; however, employers proposing significant workforce reductions are expected to notify MOHRE in advance and must, in all cases, comply with the notice and end-of-service gratuity entitlements applicable to each individual employee.

There is no statutory requirement for employee representation, works councils or trade union recognition in the UAE mainland private sector. Employees may bring individual labour complaints before MOHRE, which operates a mandatory conciliation process prior to referral to the labour courts.

Employers with 50 or more employees are required to implement internal employment policies, including a grievance procedure, and in practice typically maintain a dedicated human resources or employee relations function to handle workplace disputes. There are no obligations to inform or consult any representative body in the context of restructurings, redundancies or changes to terms and conditions of employment.

The UAE does not impose personal income tax on employees, regardless of nationality or residency. Expatriate employees, who constitute the substantial majority of the UAE private sector workforce, are not subject to any social security or pension contributions. UAE national and Gulf Cooperation Council (GCC) national employees in the private sector are subject to pension and social security contributions administered at federal and emirate level, including through the General Pension and Social Security Authority (GPSSA): employers contribute 12.5% of insurable salary (15% in the Emirate of Abu Dhabi), and employees contribute 5%. There are no other payroll taxes or levies applicable to the employment relationship.

Corporate Tax

The UAE introduced a federal corporate tax regime under Federal Decree-Law No 47 of 2022 on the Taxation of Corporations and Businesses, applicable to financial years commencing on or after 1 June 2023. The standard rate is 9% on taxable income exceeding AED375,000; income up to that threshold is taxed at 0%, providing effective relief for smaller businesses. Businesses qualifying as “Qualifying Free Zone Persons” may benefit from a 0% rate on “Qualifying Income” derived from activities conducted within or between free zones, subject to substance requirements, a de minimis threshold for non-qualifying revenue and other prescribed conditions. Extractive businesses and non-extractive natural resource businesses remain subject to emirate-level taxation and fall outside the federal corporate tax regime.

VAT and Excise Tax

VAT applies at a standard rate of 5% under Federal Decree-Law No 8 of 2017 on VAT. An excise tax applies to tobacco products and energy drinks at 100%, and to carbonated beverages at 50%. There is no withholding tax on dividends, interest or royalties paid to non-residents, and no standalone capital gains tax, although capital gains form part of taxable income under the corporate tax regime.

Pillar Two - QDMTT

The UAE enacted a qualifying domestic minimum top-up tax (QDMTT) by Cabinet Decision No 142 of 2024, effective for financial years commencing on or after 1 January 2025. The QDMTT applies to large multinational enterprise groups with consolidated global revenues of EUR750 million or more and ensures that such entities are subject to a minimum effective tax rate of 15% in the UAE. The UAE’s QDMTT has been granted safe harbour status on the OECD’s central record, meaning that in-scope groups satisfying the QDMTT will not be exposed to a top-up tax in other jurisdictions in respect of their UAE profits.

One of the principal tax incentives available in the UAE is the 0% corporate tax rate for qualifying free zone persons on qualifying income, where the statutory conditions are satisfied. More than 40 free zones operate across the UAE, each offering varying benefits including 100% foreign ownership, full repatriation of profits and capital, customs duty exemptions and, where the qualifying conditions are met, the 0% corporate tax rate.

Small business relief is available to businesses with annual revenues not exceeding AED3 million, allowing eligible taxpayers to elect to be treated as having no taxable income for corporate tax purposes for a specified period. Certain sectors and activities also benefit from specific exemptions or reduced-rate treatment under the corporate tax law and its implementing decisions.

Tax grouping is available under the corporate tax regime. A UAE resident parent company and one or more UAE resident subsidiaries may elect to form a tax group, provided the parent holds at least 95% of the share capital and voting rights of each subsidiary, directly or indirectly, and all members apply the same financial year and accounting standards. A tax group is treated as a single taxable entity, enabling profits and losses to be consolidated and offset across group members, and the group must apply to the Federal Tax Authority for approval to form or modify a tax group.

The UAE corporate tax regime adopts an interest limitation rule rather than a traditional thin capitalisation test. Net interest expenditure is deductible up to the higher of 30% of earnings before interest, tax, depreciation and amortisation (EBITDA), or AED12 million per tax period. Interest expenditure disallowed in a given period may be carried forward and deducted in up to ten subsequent tax periods, subject to the same limitation. Specific exemptions apply to banks, insurance companies and certain other regulated financial entities.

Transfer pricing rules apply under the corporate tax regime, and all transactions between related parties and connected persons must be conducted on an arm’s-length basis in accordance with the OECD Transfer Pricing Guidelines. Taxpayers meeting prescribed thresholds are required to maintain transfer pricing documentation at the master file and local file level, and to disclose related-party transactions in their annual tax returns.

Country-by-country reporting obligations apply to UAE-headquartered multinational enterprise groups with consolidated global revenues of AED3.15 billion or more.

The corporate tax law contains a general anti-avoidance rule (GAAR), which empowers the Federal Tax Authority to disregard or recharacterise arrangements that lack genuine commercial substance and are entered into with the principal purpose of obtaining a tax advantage that is contrary to the object and purpose of the law.

Additionally, the UAE’s Economic Substance Regulations require entities conducting certain “relevant activities”, including banking, insurance, investment fund management, finance and leasing, and holding company activities, to demonstrate genuine economic substance in the UAE by reference to management and control, qualified employees and operating expenditure, with non-compliance attracting penalties and possible disclosure to foreign competent authorities.

The UAE is a member of the GCC Customs Union and applies the GCC Common External Tariff, which sets a standard rate of 5% on most imported goods. Certain categories attract a 0% rate, including basic foodstuffs, medicines and agricultural inputs, while tobacco and tobacco products are subject to a customs duty of 100% and alcoholic beverages to 50%.

The UAE has concluded a number of bilateral free trade agreements in recent years, most notably with India (effective May 2022) and Israel (effective April 2023), providing preferential tariff treatment for qualifying goods originating from those countries; further agreements are under active negotiation. The UAE’s tariff environment has also been affected by US tariff measures introduced from early 2025, and the UAE government has engaged with the US administration with a view to exploring a bilateral trade agreement that could provide greater certainty for businesses operating across both markets.

Legislative Framework

Merger control in the UAE is governed by Federal Decree Law No 36 of 2023 on the Regulation of Competition (the “Competition Law”), supplemented by Cabinet Decision No 3 of 2025 concerning thresholds for economic concentration filings and its subsequent executive and implementing regulations clarifying notification procedures and merger filing requirements.

The Ministry of Economy is the competent authority for merger control review on the UAE mainland. Certain regulated sectors including banking, financial services, insurance and telecommunications fall outside the scope of the general Competition Law and are instead subject to the merger review frameworks, if any, maintained by their sector regulators. Economic activities conducted within UAE free zones are generally also excluded from scope.

Notification Thresholds

Cabinet Decision No 3 of 2025 introduced two alternative triggering thresholds for mandatory pre-closing notification:

• a turnover threshold, where the combined turnover of the parties to the concentration equals or exceeds AED300 million in the relevant UAE market; and
• a market share threshold, where the combined market share of the parties equals or exceeds 40% of the relevant market in the UAE.

A mandatory notification obligation arises where either threshold is met. Full-function joint ventures, those performing all the functions of an autonomous economic entity on a lasting basis, are treated as concentrations subject to notification where the applicable thresholds are satisfied. Parties should assess both thresholds at the time of transaction planning, as satisfaction of either is sufficient to trigger the filing obligation regardless of whether the other threshold is met.

Filing, Standstill and Review

Notification must be filed with the Ministry of Economy before completion of the transaction. The implementing regulations issued pursuant to Cabinet Decision No 59 of 2026 (expected to take effect on the 30 July 2026) clarify the notification procedures and the information and documentation required to accompany a complete filing, including details of the parties and transaction structure, relevant market definitions, market share and turnover data, and financial information.

The Ministry has ninety (90) calendar days from receipt of a complete notification to issue its decision, extendable by a further forty-five (45) calendar days; during this standstill period the parties may not complete the transaction. Note that if no decision is issued within the applicable period, the transaction is deemed rejected. The Ministry may request supplementary information during the review, which may extend the timeline, and parties are encouraged to engage with the Ministry proactively and at an early stage where there is any uncertainty about whether either threshold is satisfied.

Decision and Consequences of Non-Compliance

The Ministry may approve the transaction unconditionally, approve it subject to conditions which may include structural remedies such as divestitures or behavioural commitments, or prohibit it outright on competition grounds. Completing a notifiable transaction without notification or in breach of the standstill obligation may result in significant administrative penalties and, in serious cases, the unwinding of the completed transaction.

Prohibition

The Competition Law prohibits agreements, concerted practices and decisions of associations of undertakings that have as their object or effect the prevention, restriction or distortion of competition in the UAE market. The prohibition applies to both horizontal arrangements between competitors and vertical arrangements between suppliers and distributors.

Hard-core horizontal restrictions including price-fixing, market allocation, bid rigging and output limitation are treated as the most serious category of infringement and attract maximum penalties regardless of actual market effect. Vertical arrangements incorporating hard-core restraints, such as resale price maintenance or absolute territorial protection, are similarly prohibited.

Enforcement and Extra-Territorial Reach

The Ministry has broad investigative powers, including the ability to request documents, conduct on-site inspections and interview employees. The Competition Law applies on an effects basis: anti-competitive conduct carried out entirely outside the UAE falls within scope where it has actual or potential effects on competition within the UAE market. Administrative fines for prohibited agreements may reach up to 10% of the violating entity’s total UAE revenues during the period of the infringement, with higher penalties applicable in cases of repeat violation.

Dominance and Prohibited Conduct

This refers to the abuse by one or more undertakings of a dominant position in the UAE market or a substantial part thereof. Pursuant to Cabinet Resolution No 3 of 2025, a company is generally presumed to hold (whether solely or in conjunction with other establishments) a dominant position where its market share equals or exceeds 40% of the relevant market, although dominance may also be established based on broader indicators of market power and the ability to act independently of competitors, customers or consumers.

Prohibited abusive conduct includes imposing unfair purchase or selling prices, limiting production or market supply to the detriment of consumers, applying dissimilar conditions to equivalent transactions so as to disadvantage trading parties, tying or bundling unrelated products or services, and predatory pricing or margin squeeze.

Enforcement and Extraterritorial Application

The Ministry is responsible for enforcing the abuse of dominance provisions and may exercise the same investigative and enforcement powers applicable to anti-competitive agreements and cartel conduct. The Competition Law and its Implementing Regulations applies on an effects basis and may extend to conduct occurring outside the UAE where such conduct produces anti-competitive effects within the UAE market.

Administrative fines for established abuses may reach up to 10% of total UAE revenues during the period of the infringement, and the Ministry may also order the cessation of the abusive practice and impose structural or behavioural remedies.

As with the cartel prohibition, regulated sectors including banking, financial services, insurance and telecommunications remain subject to their own sector-specific regulatory frameworks and are excluded from the general Competition Law.

Patent protection in the UAE is governed by Federal Decree-Law No 11 of 2021 on the Regulation and Protection of Industrial Property. To be patentable, an invention must be novel, involve an inventive step and be capable of industrial application; certain categories, including discoveries, scientific theories, mathematical methods and methods of medical treatment, are excluded from patentability.

A patent confers protection for 20 years from the filing date, with no possibility of renewal beyond that term, and applications are filed with the Industrial Property Department of the Ministry of Economy, which conducts substantive examination. The UAE is also a member of the GCC Patent Office, which offers a single regional application providing protection across all six GCC member states, although the role of the GCC Patent Office is in the process of being re-evaluated by member states. Enforcement is available through both the civil courts (injunctions, damages and delivery up) and the criminal courts (fines and imprisonment for wilful infringement).

Trade marks are protected under Federal Decree-Law No 36 of 2021 on Trade Marks. A registered trade mark confers exclusive rights for ten years from the date of registration and is indefinitely renewable for further ten-year periods upon payment of the prescribed renewal fees.

Applications are filed with the Ministry of Economy’s Trade Mark Registry, and the UAE follows the Nice Classification system for the classification of goods and services. Well-known marks enjoy protection in the UAE even without local registration, consistent with the UAE’s obligations under the Paris Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”), and civil remedies include injunctions, damages and an account of profits, while criminal liability may arise for wilful infringement.

Industrial designs, the ornamental or aesthetic features of a product, are protected under Federal Decree-Law No 11 of 2021 on the Regulation and Protection of Industrial Property. Registration is with the Ministry of Economy and confers an initial protection period of ten years, renewable for two further five-year periods, providing a maximum protection period of 20 years. Unregistered designs do not receive equivalent statutory protection, and rights-holders are accordingly advised to register prior to commercialisation or public disclosure, with enforcement mechanisms mirroring those available for patent infringement, including civil and criminal remedies.

Copyright in the UAE is governed by Federal Decree-Law No 38 of 2021 on Copyrights and Neighbouring Rights. Protection arises automatically upon the creation of an original work, without any requirement for registration; however, voluntary registration with the Ministry of Economy is available and is recommended as a means of establishing a public record of ownership.

The law protects a broad range of works, including literary, artistic, musical, dramatic, audiovisual, architectural and applied art works. The duration of protection is the lifetime of the author plus 50 years for most categories; works of legal entities and audiovisual works are protected for 50 years from publication, and both civil remedies (injunctions, damages and seizure of infringing copies) and criminal enforcement are available, with the UAE Customs Authority empowered to detain suspected infringing goods at the border.

Software and Databases

Computer software is protected as a literary work under the Copyright Law and benefits from the same term and enforcement framework. Databases that involve a sufficient degree of creative selection or arrangement are similarly protected; there is no separate sui generis database right in the UAE, and protection is contingent on meeting the originality threshold under the Copyright Law.

Trade Secrets

Trade secrets are protected under Federal Decree-Law No 26 of 2020 on Trade Secrets. Protection applies to commercially valuable confidential information that the rights-holder has taken reasonable steps to maintain as secret; there is no registration requirement, and misappropriation gives rise to civil liability in damages, with criminal liability potentially arising under the Cybercrime Law (Federal Decree-Law No 34 of 2021) where the misappropriation involves the use of electronic systems or networks.

Domain Names

Registration and dispute resolution in respect of the .ae country code top-level domain are regulated by the Telecommunications and Digital Government Regulatory Authority (TDRA), which operates a dispute resolution policy based on the Uniform Domain Name Dispute Resolution Policy (UDRP) model and provides a cost-effective mechanism for recovering domain names registered in bad faith.

The primary federal data protection legislation is Federal Decree-Law No 45 of 2021 on the Protection of Personal Data (PDPL), which came into effect on 2 January 2022. It is worth mentioning that the Implementing Regulations of this Law have not yet been issued.

The PDPL establishes a principles-based framework for the processing of personal data, incorporating requirements relating to lawful basis, transparency, purpose limitation, data minimisation, accuracy, storage limitation and security. Sector-specific rules apply in a number of areas: the Central Bank of the UAE has issued data protection and cloud computing regulations applicable to licensed financial institutions, and the health sector is subject to supplementary requirements under Ministry of Health and Prevention guidance. The DIFC and ADGM operate distinct and more comprehensive data protection regimes, the DIFC Data Protection Law 2020 and the ADGM Data Protection Regulations 2021, respectively, which are broadly modelled on the GDPR and apply exclusively within those financial free zones.

The PDPL applies to the processing of personal data of individuals located in the UAE, and to data controllers and processors established in the UAE. The law also has extraterritorial reach: it applies to the processing of personal data of UAE residents by entities located outside the UAE where that processing relates to the offering of goods or services to residents or the monitoring of their behaviour within the UAE.

Cross-border transfers of personal data outside the UAE are permitted only to countries, territories or international organisations that ensure an adequate level of protection, as determined by the UAE Data Office, or where the data controller has implemented appropriate safeguards such as standard contractual clauses or binding corporate rules. Transfers may also be made on the basis of enumerated derogations, including the explicit consent of the data subject or necessity for the performance of a contract to which the data subject is a party.

The UAE Data Office was established as the competent supervisory authority under the PDPL and is responsible for enforcing the law, issuing binding decisions and guidance, and administering the data protection register. The UAE Data Office has the power to investigate complaints from data subjects, conduct audits of data controllers and processors, issue compliance notices and impose administrative penalties, including significant fines for breaches of the PDPL. Within the DIFC, the Commissioner of Data Protection exercises equivalent supervisory and enforcement functions; within the ADGM, those functions are performed by the Office of Data Protection.

Civil Transactions Law

The most significant near-term legislative development across the UAE’s general legal landscape is Federal Decree-Law No 25 of 2025, which comprehensively revises the UAE Civil Transactions Law, the principal statute governing contract, tort and obligations law in the UAE, and which comes into force on 1 June 2026. The new law makes material amendments to core provisions, including those governing force majeure, hardship, contractual liability and the general theory of obligations, and businesses with existing long-term contracts governed by UAE law should review their agreements in light of these changes, particularly provisions addressing supervening events, price adjustment mechanisms and remedies for breach.

Corporate Tax

The UAE’s corporate tax regime remains in a period of active development. The Federal Tax Authority continues to issue guidance on the application of key provisions, including the free zone qualifying income rules, transfer pricing documentation requirements and the QDMTT, and further implementing decisions and clarifications are anticipated, particularly in relation to cross-border transactions, the interaction between the corporate tax regime and the UAE’s expanding network of double tax treaties, and the treatment of specific industry sectors.

Artificial Intelligence Regulation

The UAE is actively developing a regulatory framework for artificial intelligence (AI), consistent with its National AI Strategy 2031. Sector-specific AI guidance has been issued in certain regulated industries, including financial services and healthcare, and broader horizontal AI legislation is anticipated in the near term, with businesses deploying AI systems in the UAE, particularly in areas involving automated decision-making, employment or the processing of personal data, encouraged to monitor legislative and regulatory developments closely.

AML/CFT and Beneficial Ownership Transparency

The UAE has undertaken substantial reform of its anti-money laundering and counter-terrorism financing framework in recent years, and continued refinement is expected. Enhanced beneficial ownership transparency requirements applicable to both onshore and free zone entities are already in force; further alignment with Financial Action Task Force (FATF) recommendations and active enforcement by the supervisory authorities, including the Central Bank, the SCA and the Ministry of Economy, is anticipated.

Competition Law

Federal Decree-Law No 36 of 2023 significantly updated the UAE’s competition regime, expanding the scope of merger control notification obligations and enhancing the Ministry of Economy’s investigative and sanctioning powers. The full implementation of the 2023 law – particularly after the issuance of its implementing regulations in 2026 – including enforcement guidance, is ongoing, and businesses considering mergers, acquisitions or commercial arrangements that may affect competition in UAE markets should take careful account of the updated thresholds and procedural requirements.