Redomiciliation: Moving Companies Into the UAE
The most consequential new provision is redomiciliation. Under the amended law, a foreign company may transfer its registration to the UAE while preserving its legal personality, contracts and liabilities — provided the home jurisdiction permits outbound redomiciliation. For M&A transactions, this means a seller can move an offshore holding vehicle onshore before a sale, enabling a single UAE share transfer instead of a multi-jurisdiction disposal.
The practical effect is substantial: companies that were incorporated in offshore jurisdictions (BVI, Cayman, Seychelles) for historical reasons but now operate primarily in or through the UAE can re-domicile without unwinding their corporate history. Contracts, bank accounts, counterparty relationships and regulatory registrations can be preserved through the transfer.
Foreign Ownership Clarification
The amendments clarify the 100% foreign ownership framework, removing residual ambiguity about which activities and entity types are eligible. Combined with the Golden Visa portal updates confirming that Golden Visa holders may own 100% of mainland companies in all sectors except strategic infrastructure, the path for foreign entrepreneurs is now clearer than at any point in UAE corporate law history.
Strengthened Director Duties
Director-duty standards have been explicitly strengthened, with clearer articulation of fiduciary obligations, conflict-of-interest procedures and personal liability exposure. For companies using nominee director arrangements, this reinforces the importance of working with a licensed TCSP that can properly discharge these duties under regulatory oversight — rather than informal nominee arrangements that may not meet the heightened standards.
Share Transfer Mechanics
The refined share transfer provisions reference new statutory drag-along and tag-along provisions. SPAs and shareholder agreements should now reference these statutory mechanics rather than relying solely on contractual provisions. Warranty language on capitalisation should distinguish between share classes and specify conversion, anti-dilution and preferential distribution rights.
Industry observers expect these changes to reduce formation friction, simplify inbound corporate migration and provide greater certainty for exit transactions.— Global Law Experts, May 2026
Related Insights
Choosing the Right Corporate Structure in the UAE: A Legal Framework GuideLLC, free zone company, branch, SPV, holding company — the UAE offers numerous entity types across multiple jurisdiction... UAE Corporate Tax: What Free Zone Companies Need to Know About QFZP StatusWith the UAE corporate tax regime now in its second year of application, free zone companies face a critical compliance ... Mainland, Free Zone or Offshore: The 2026 Decision Framework for UAE Company FormationThe rules governing UAE company formation shifted in 2026 with Companies Law amendments, QFZP requirements and new merge...The 2025 Amendments at a Glance
Federal Decree-Law 20 of 2025 amended several provisions of the Commercial Companies Law (Federal Decree-Law 32 of 2021) with effect from late 2025. The amendments respond to the operational pressures created by the corporate tax regime, the UBO disclosure requirements and the broader regulatory tightening of 2023–2024. The changes are not a wholesale rewrite; they are a targeted set of clarifications and operational reforms aimed at making the existing framework workable for cross-border investors and family-owned businesses.
| Theme | What changed | Practical effect |
|---|---|---|
| Single-shareholder LLCs | Permitted explicitly for all permitted activities | Cleaner structures for solo founders and holding entities |
| Treasury shares | Allowed up to 10% of issued capital | Companies can buy back shares for incentive schemes |
| Sub-statutory share classes | Permitted with explicit constitutional drafting | Founder, investor and ESOP classes possible in the MoA |
| Director liability | Clarified standard of care and limitation periods | More predictable D&O risk allocation |
| Foreign companies branch | Streamlined branch registration | Faster set-up for representative offices |
| Electronic execution | Statutory recognition of e-signatures and e-filing | Aligns with EmaraTax and goAML platforms |
Single-Shareholder LLCs — Clean at Last
Pre-2025 practice permitted single-shareholder LLCs but the constitutional implications were patchy across emirates. The 2025 amendment explicitly recognises the structure and harmonises the treatment. The practical impact is meaningful for two populations: solo founders setting up operating businesses without the friction of a nominee co-shareholder, and holding companies designed to sit between a UBO and operating subsidiaries. The single-shareholder LLC now operates with the same legal certainty as a multi-shareholder LLC, simplifying ongoing share-register administration and exit transactions.
Treasury Shares and ESOPs
The 10% treasury-share allowance is the technical enabler for employee share option plans in mainland UAE companies. Pre-amendment, ESOPs at mainland-incorporated entities required workarounds — typically a separate holding company with foreign-law option agreements. The amendment allows direct issuance and re-purchase of shares for incentive purposes within the mainland LLC framework. The practical implication is that scaling mainland businesses can now run ESOPs without restructuring through a foreign holdco — a meaningful simplification for growth-stage technology and services businesses.
Sub-Classes of Shares — Tailoring the Cap Table
The 2025 amendment permits LLCs to issue shares in different classes with explicitly drafted rights (voting, dividend, liquidation preference, vesting). The implications are larger than they look. UAE-incorporated mainland companies can now structure cap tables with founder, investor and employee classes that match international VC standard practice. Series-A and later financing rounds at mainland LLCs are materially easier to document; conversion mechanics for SAFE and convertible notes can now operate cleanly. Cap-table structuring for growth-stage businesses now sits cleanly inside the mainland framework rather than requiring offshore vehicles.
Electronic Execution — Less Glamorous, Equally Important
The statutory recognition of e-signatures for company documentation closes a long-running practical gap. Resolutions, share transfers, board minutes and routine corporate-secretarial filings can now be executed electronically with the same legal force as wet-ink documents. The alignment with EmaraTax (CT and VAT filings), goAML (AML reporting) and the licensing-authority portals creates a near-paperless corporate-secretarial workflow. For cross-border families with shareholders in multiple jurisdictions, the cost of company maintenance drops materially.
- Single-shareholder LLCs now operate with full legal certainty — cleaner founder and holding structures.
- Treasury shares up to 10% enable mainland-LLC ESOPs without offshore restructuring.
- Multiple share classes allow VC-standard cap tables inside UAE mainland companies.
- Director liability standards clarified — more predictable D&O risk allocation.
- E-signatures statutorily recognised — material reduction in corporate-secretarial friction for cross-border owners.
Polaris Perspective
Polaris advises on all aspects of UAE corporate law — from entity formation and share transfers to redomiciliation and M&A structuring. As a licensed TCSP, we provide the fiduciary and governance infrastructure that the amended Companies Law demands.
Arrange a Consultation →