The UAE has introduced far-reaching reforms to its Commercial Companies Law, expanding the concept of corporate citizenship and formally recognising more businesses as Emirati companies. The changes apply to all companies established in the UAE including mainland, free zone, and financial free zone entities and are designed to strengthen access to trade benefits, improve global competitiveness, and support the country’s goal of reaching two million active companies by the end of the decade.
The reforms mark a significant step in aligning the UAE’s corporate framework with international best practices while reinforcing the country’s position as a leading global business hub.
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Corporate Citizenship: What It Means for Businesses
At the core of the reform is the clarification of corporate citizenship, a concept that determines a company’s legal nationality based on place of incorporation, rather than the nationality of its shareholders or owners.
Under the updated law:
- Any company incorporated in the UAE is legally recognised as an Emirati corporate entity
- The status applies only to the company itself, not to its shareholders, directors, or employees
- Mainland, free zone, and financial free zone companies are treated on an equal footing
This clarification removes long-standing ambiguity and reinforces the legal identity of UAE-based businesses when operating locally and internationally.
Strengthening Access to Trade Deals and Global Markets
By expanding corporate citizenship and Emirati status, the UAE is enabling companies to more effectively leverage its growing network of Comprehensive Economic Partnership Agreements (CEPAs) and other international trade arrangements.
These agreements reduce tariffs, streamline customs procedures, and open access to high-growth global markets. Recognised as Emirati entities, UAE-based companies gain enhanced credibility and eligibility when engaging in cross-border trade, exports, and international partnerships.
The Ministry of Economy has indicated that the reforms are expected to increase new company registrations by 10–15 per cent in the first year, contributing to faster business formation and sustained economic growth.
Key Changes to the UAE Commercial Companies Law
In addition to expanding corporate citizenship, the amendments introduce several important changes aimed at modernising corporate structures and improving ease of doing business.
Multiple Classes of Shares
The amended law allows Limited Liability Companies (LLCs) and joint stock companies to issue multiple classes of shares, each with different rights and privileges. These may include:
- Different voting rights
- Preferred or priority dividend entitlements
- Enhanced control rights for founders or strategic investors
This reform brings greater flexibility in ownership and investment structuring, supporting startups, family-owned businesses, and companies seeking private equity or institutional investment.
Greater Flexibility Between Free Zones and Mainland
Companies can now transfer their registration between emirates or between free zones and the mainland without losing their legal identity. This enables businesses to adapt their structure as they scale, expand operations, or enter new markets.
Free zone companies are also permitted to establish branches on the mainland, significantly expanding their commercial reach while maintaining their existing corporate framework.
Clearer Rules for Mergers, Acquisitions, and Exits
The amendments introduce more explicit provisions governing mergers, acquisitions, shareholder exits, and corporate restructurings. These updates enhance transparency, reduce regulatory uncertainty, and strengthen investor confidence.
Introduction of Non-Profit Commercial Companies
The law also introduces a regulated framework for non-profit commercial companies, supporting social enterprises and sustainability-driven business models within the UAE’s corporate ecosystem.
Supporting the UAE’s Business Growth Vision
By embedding corporate citizenship into company law and aligning it with trade policy, the UAE is positioning businesses established in the country as long-term economic partners. The reforms support entrepreneurship, attract foreign investment, and enable UAE-based companies to compete more effectively on the global stage.
A More Competitive and Globally Connected Business Environment
The expansion of corporate citizenship and Emirati status represents a strategic evolution in the UAE’s business landscape. For companies operating in the UAE, the reforms deliver greater certainty, flexibility, and access to international opportunities.
As the UAE continues to modernise its regulatory environment and deepen global trade ties, businesses established in the country are well positioned to benefit from sustained growth in an increasingly interconnected global economy
