The UAE Minister of Economy and Tourism, Abdullah bin Touq Al Marri, has emphasized that flexible regulations, incentives, and a variety of opportunities are central to establishing a robust business environment that attracts investments, supports business growth, and ensures effective management of stakeholder interests.
He stated that implementing comprehensive legal frameworks to facilitate diverse business activities is a key driver in building trust among local and international investors. These frameworks enhance governance that fosters the growth and sustainability of companies across all sizes and sectors.
Al Marri noted that, thanks to the wise leadership’s vision, the UAE has undertaken a legislative journey over the last four decades to advance commercial company law. The philosophy guiding this journey is to empower legislative texts as tools that enable, rather than hinder, businesses, acting as dynamic growth engines that provide advantages and opportunities, and paving the way for future prosperity across economic sectors and business activities.
He further explained that this journey has seen significant amendments, including updates to provisions and the issuance of modern versions that replaced older regulations, creating a flexible and contemporary legislative base aimed at increasing the number of companies in the UAE. Currently, the UAE market houses over 1.4 million companies, including 250,000 established in just 2025, reflecting the vibrancy and dynamism of the country’s business environment.
The minister added that the legislative journey did not stop there; the UAE has now entered a new phase of legal development, guided by a modern and flexible legislative approach. This is evident with the issuance of Federal Decree Law No. 20 of 2025, which amends certain provisions of Federal Decree Law No. 32 of 2021 regarding commercial companies. The new amendments, which consist of 15 modified articles and one new article, are characterized by unprecedented legislative steps within the region to enhance corporate flexibility and provide innovative tools for mergers, exits, and diverse investment and financing opportunities.
He highlighted that the distinctive aspect of these amendments is the responsiveness to the needs and aspirations of the business sector as reflected by ongoing assessments of the realities on the ground, while also ensuring a forward-looking perspective that aligns with global best practices, incorporating advanced governance and broader ownership and management options. This enhances the sustainability of companies and facilitates their transitions and legal form transformations, supporting the integration of the national economy across free zones and the mainland.
From a policy-making standpoint, Al Marri expressed that this significant legislative step enhances the protection of rights and broadens opportunities for companies, sending a strong message of confidence and support for flexibility and empowerment to all investors looking to make the UAE a launchpad for their regional and global expansion.
He pointed out that the amendments introduce multiple categories of shares and stock for limited liability companies and public and private joint-stock companies, granting founders, shareholders, and partners unprecedented flexibility in structuring ownership and profit distribution, compared to previous regulations where such rights were limited to public joint-stock companies through cabinet decisions.
The UAE stands out as one of the first countries in the Middle East to offer this feature in limited liability companies, whereas many countries restrict it to joint-stock companies.
Al Marri further detailed that classifying partner shares or stocks into multiple categories will follow specific patterns approved by cabinet decisions, in line with relevant global legislations. Examples include profit share classes that grant higher profit percentages or special privileges, premium shares with priority rights in capital recovery upon exit or liquidation, unique rights for additional profits, and various nominal value shares that can be issued in different amounts without compromising partners’ rights.
The amendments also introduce a new economic model for companies, namely the “non-profit commercial company,” which can add significant social value by supporting projects focused on impact, community responsibility, and innovation-driven initiatives. This update allows for faster and more inclusive governance processes that align with the requirements of the new economy and enhance the competitiveness of the business environment.
To reinforce the national economic identity, Article 9 stipulates that every company established in the UAE, including those registered in free zones and financial free zones, shall carry the nationality of the state. This approach aims to enhance the UAE’s economic reputation and improve companies’ access to global markets and opportunities, leveraging the strong international partnerships and established economic position the UAE enjoys.
The minister expressed confidence that the new commercial company law will foster better coherence and integration between local legislations and the laws governing free zones and free financial zones related to the establishment, operation, and transfer of companies, reducing compliance costs and operational burdens for businesses, while ensuring their sustainability and market accessibility.
Al Marri affirmed that ongoing efforts to implement the provisions of the new decree will maximize the advantages and facilitation it offers to companies and the UAE business community, enhancing private sector capabilities. This step is strategic in bolstering the UAE’s standing as a global business and investment hub, reflecting the nation’s vision towards innovation and sustainable economic growth, aiming to achieve the top global rank in developing proactive legislations for new economy sectors by the next decade, in line with the “We Are the UAE 2031” vision objectives.