Federal Decree-Law No. 50 of 2022 · UAE Federal
The UAE Commercial Code: defines merchants and commercial activities, including those conducted through technological means, the commercial books merchants must keep, business assets, trade names and unfair competition, commercial obligations, guarantees, interest, commercial sales and commercial papers, replacing Federal Law No. 18 of 1993.
Federal Decree-Law No. 50 of 2022 promulgates the Commercial Transactions Law, the UAE's commercial code. The decree brought the Law into force on 2 January 2023 (Article 4), repealed Federal Law No. 18 of 1993 while keeping its implementing rules alive where not in conflict (Article 2), and leaves implementing resolutions to the Minister of Economy (Article 3). The Law is in force and the portal records no amendment.
Article 1 applies the Law to merchants and to all commercial activities carried out by any person, including virtual businesses carried out on technological media, and Article 10 confirms that commercial activities and contracts may be created in whole or in part by electronic means under the same rules. Articles 4 to 7 define commercial activities, including banking, insurance and virtual assets by nature and brokerage, commercial agency and electronic platforms when practised as a profession. Article 11 deems a merchant any natural person trading in his own name as an occupation and any company carrying on a commercial activity or taking a commercial-company form. Government bodies and non-trading self-employed persons are not merchants (Article 15), and small trades relying on labour rather than capital are exempt from merchant duties (Article 17).
Capacity to trade starts at 18, or 15 under Cabinet controls (Article 18); undischarged bankrupts and persons convicted of fraud, theft or forgery may not trade, on pain of a fine of AED 10,000 to AED 200,000 and closure (Article 23). A merchant's dealings are not accepted by any competent authority unless the merchant is registered in the Commercial Register (Article 24). Article 25 requires every merchant to keep commercial books, in hard or soft copy, that accurately show its financial position; a physical trader keeps a general journal and general ledger, and Article 29 requires books, correspondence and invoices to be kept for at least five years.
Articles 36 to 49 treat the business as a unit of assets whose sale must be notarised and registered to be valid (Article 39), with mortgages limited to banks and financing institutions (Article 45). Articles 53 to 58 regulate trade names and Articles 60 to 67 unfair competition.
On commercial obligations, co-debtors are jointly liable (Article 69), a guarantee of a commercial debt is itself commercial (Article 70), interest runs at the contract rate or, if none, at the market rate capped at 9% (Article 72), delay interest accrues from maturity without proof of loss (Articles 85 and 86), compound interest is barred (Article 88) and claims between merchants are time-barred after five years (Article 92). Articles 93 to 161 govern commercial sale, including defect notices within 15 days and claims within 60 days (Article 108). Later parts cover commercial mortgage (Articles 162 to 175), public warehouses (Articles 176 to 193) and commercial agency (Article 195 onwards), where the Commercial Agencies Law prevails in case of conflict.
Merchants, meaning natural persons trading in their own name as an occupation and companies carrying on commercial activity or taking a commercial-company form, and anyone carrying out commercial activities in the UAE, including virtual businesses run on technological media. Government bodies, public-benefit organisations and non-trading self-employed persons are not merchants.
English official text in 681 articles. Open the full text or jump to a provision:
| Article 1 | The Law applies to merchants and to all commercial activities carried out by any person, including virtual businesses carried out on technological media or by modern means. |
| Articles 4–7 | Define commercial activities: those of merchants in trade, speculative profit-seeking and activities specified by law; Article 5 lists activities commercial by nature including banking, insurance and virtual assets; Article 6 those commercial when practised as a profession, such as brokerage, commercial agency and managing electronic platforms. |
| Article 10 | Commercial activities may be practised and commercial contracts created or concluded in whole or in part by electronic means, governed by the same rules as physical ones. |
| Article 11 | A merchant is a natural person who carries on commercial activities in his own name and for his own account as an occupation, and any company that carries on a commercial activity or adopts a commercial-company legal form. |
| Article 23 | Undischarged bankrupts, persons barred by law and persons convicted of fraud, theft, forgery and similar offences may not trade unless rehabilitated; breach carries a fine of AED 10,000 to AED 200,000 and closure of the premises. |
| Article 24 | A merchant's business transactions are not accepted by any competent authority unless the merchant is registered in the Commercial Register. |
| Article 25 | Every merchant must keep commercial books, in hard or soft copy, that accurately show its financial position and the rights and liabilities of the business; a physical trader keeps a general journal and a general ledger. |
| Article 29 | Correspondence, invoices and supporting documents, and the commercial books themselves, must be kept for at least five years from the date the book is annotated as complete. |
| Article 39 | Any disposal of the business assets must be notarised and recorded in the Commercial Register, failing which it is void; title passes against third parties from registration and publication (Article 40). |
| Article 72 | Interest on a commercial loan runs at the contract rate; where no rate is agreed, at the market rate prevailing at the time, not exceeding 9% until full repayment. |
| Articles 85–88 | Delay interest on a commercial debt accrues from maturity without proof of damage, and compound interest is barred. |
| Article 92 | Claims between merchants concerning their mutual obligations are time-barred after five years from the due date where the debt is denied without lawful excuse, unless another law sets a shorter period. |
The Law is mainly civil, but it carries fines: AED 10,000 to AED 200,000 and closure for trading while prohibited (Article 23); at least AED 10,000 for misusing a predecessor's trade name or another merchant's registered name (Articles 58 and 65); up to AED 20,000, or AED 40,000 on repetition, for auction-book violations (Article 121); up to AED 40,000, or AED 60,000 with a three-year permit ban, for unlawful reduced-price sales (Article 129); and imprisonment and/or AED 20,000 to AED 100,000 for operating a public warehouse without a licence (Article 193).
This Code sits underneath most of the documents we prepare for trading clients. Article 25 is the statutory root of the bookkeeping duty that our accounting team discharges for mainland and free zone companies, and the five-year retention in Article 29 is the floor we apply to invoices and ledgers alongside the longer periods in the tax laws. When a client buys or sells a going concern we structure the transfer around Articles 39 to 43, because an unregistered sale of the business assets is void against creditors, and we coordinate the notarisation and Commercial Register entries. For loan and guarantee documents between group companies we draft the interest clause with Article 72's 9% default and the bar on compound interest in mind, and we remind clients chasing old receivables that Article 92 cuts off claims between merchants after five years.
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
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