The Filing Obligation
The obligation is suspensory: no integration steps, no transfer of control and no economic completion may occur before clearance is received. This is not a post-closing notification regime — it is a pre-closing approval requirement with teeth. Penalties for non-compliance include administrative fines calculated as a percentage of UAE turnover, the power to order unwinding of a completed transaction, and potential personal liability for officers and directors.
Buyers should run a threshold screening at the letter-of-intent stage. If there is any possibility that the combined entity reaches AED 300 million in UAE turnover, or that either party holds 40% or more of a plausibly defined relevant market, the parties must budget at least 90 additional days before the target closing date.
SPA Drafting Implications
For M&A advisory practitioners, the practical drafting impact is direct. Long-stop dates must account for the 90-day filing window plus potential extension for commitments negotiation. Conditions precedent must include merger clearance where the thresholds are met. Material adverse change definitions should address the risk that clearance is denied or conditioned.
SPA termination rights should be carefully calibrated: a deemed rejection (where the MOE fails to respond within the statutory timeframe) triggers the same consequences as an express rejection. Parties that receive an adverse decision may challenge it through administrative appeal, but the suspensory obligation remains in place during any appeal — meaning the deal remains frozen.
The Convergence Effect
The convergence of the Companies Law amendments and the new merger-control thresholds creates a fundamentally different compliance environment for cross-border UAE M&A in 2026. Practitioners who treat these changes as a checklist afterthought risk deal delay, regulatory penalties and, in the worst case, a forced unwinding of a completed transaction.
For business valuation purposes, the new regime adds a regulatory risk premium to transactions near the thresholds. Buyers should factor merger-clearance risk into their valuation models, particularly for consolidating acquisitions in sectors where UAE market share concentration is high.
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The UAE's competition regime was reset by Federal Decree-Law 36 of 2023 (Competition Law) and Cabinet Decision 3 of 2025 (Implementing Regulations). Two important changes followed. First, a mandatory pre-merger notification threshold of AED 300 million was introduced for the aggregate annual revenue of all parties to the transaction in the UAE. Second, the previous "30% market share" alternative trigger remains, but it is now a substantive concern test rather than a pure notification trigger — transactions can be reviewed on market-share grounds even where the revenue threshold is not crossed.
| Notification trigger | 2023+ regime | Notes |
|---|---|---|
| Aggregate annual UAE revenue of parties | ≥AED 300m | Mandatory pre-merger filing |
| Market share | ≥40% in relevant market | Substantive review possible |
| Concentrative joint ventures | Yes | Caught if revenue/market-share triggers met |
| Standstill obligation | Yes | Cannot close until clearance or expiry |
| Review period | 90 working days from complete filing | Extendable for complex matters |
| Sanctions | Up to 10% of UAE revenue | Per Article 27 Competition Law |
What Counts as a "Concentration"
"Concentration" captures mergers, share or asset acquisitions giving rise to control, and joint ventures performing the functions of an autonomous economic entity. Control is the ability to exercise decisive influence — typically a majority shareholding but also less in cases of veto rights, board composition arrangements, or contractual influence. Internal restructurings inside a wholly-owned group are not concentrations. Minority investments that do not confer control are not concentrations even if the absolute amount is large.
Sectors and Carve-Outs That Often Get Missed
The Competition Law operates alongside sector-specific regulators. Telecommunications transactions are reviewed by the TDRA; financial-services M&A involves the Central Bank or DIFC/ADGM regulators in their respective jurisdictions; aviation and shipping have their own regimes. The Ministry of Economy coordinates with these regulators rather than displacing them — meaning some transactions face two parallel clearance processes. Free-zone entities are not exempt; the Law and Implementing Regulations apply to all economic activity in the UAE.
How to Plan a Filing — and Why Timing Bites
The 90-working-day clock starts only when the filing is complete. Incomplete filings reset the clock when supplementary information is supplied. The practical implication is that filings should be prepared with the same care as the underlying transaction documents: market-definition analysis, competitive-effects assessment, efficiency claims, suggested remedies (if any). Filings prepared in haste typically generate Phase II information requests that add 30–60 working days. Coordination with the deal's closing conditions — typically including a competition-clearance condition — is essential. M&A advisory engagements that involve Polaris incorporate competition analysis at the structuring stage, not as a post-signing afterthought.
Sanctions and Enforcement Risk
Failure to notify a notifiable transaction, or closing before clearance (gun-jumping), can attract fines up to 10% of UAE revenue. The Ministry has signalled a willingness to use this tool: a published 2024 enforcement action involved a meaningful penalty on a foreign acquirer for closing a UAE-affecting transaction before notification. Outside the headline fines, parties to an unauthorised concentration risk transaction unwind or contractual remedies — both materially worse than the notification cost.
- Mandatory notification at AED 300m aggregate annual UAE revenue of all parties to the transaction.
- 40% market-share trigger persists for substantive review even below the revenue threshold.
- Standstill obligation prevents closing before clearance — gun-jumping fines up to 10% of UAE revenue.
- 90-working-day review window starts when filing is complete; incomplete filings reset the clock.
- Sector regulators (TDRA, Central Bank, DFSA, FSRA) operate in parallel, not in displacement.
Polaris Perspective
Polaris provides M&A advisory and due diligence across all UAE jurisdictions. We screen transactions for merger-control obligations, coordinate filing preparation and manage the regulatory timeline alongside the commercial deal process.
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