As part of the UAE’s keenness to develop the legislative framework regulating the corporate sector and enhance the business environment in line with international best practices, Federal Decree Law No. (20) of 2025 has been issued amending some provisions of Federal Decree-Law No. (32) of 2021 on Commercial Companies. This update aims to highlight the most important substantive amendments included in the decree, while highlighting the most prominent practical implications for companies, investors, business owners, and relevant legal authorities.

 

Article (3) – Companies Subject to the Provisions of this Decree-Law:

1. Companies established in the UAE.
2. Foreign companies that operate in the State or occupy their headquarters, branches, or representative offices therein, subject to the provisions of Chapter Nine.
3. Branches of companies or representative offices of companies established in the free zones, in case they practice their activities outside the borders of the zone and within the country.

 

Article (5) – Companies operating in free zones:
1. The provisions of this Decree-Law shall not apply to companies established in the Free Zones in the State in respect of what is specifically stipulated in the laws or regulations of the Free Zone concerned.
2. If the legislation of the Free Zones allows the companies incorporated therein to carry out their activities outside the boundaries of the Zone and within the State, they may establish branches or representative offices within the State subject to the provisions of this Decree-Law.

 

Article (8) – Concept of the Company:
1. The company is a contract under which two or more persons are obligated to participate in an economic project to achieve profit.
2. The economic project includes any commercial, financial, industrial, agricultural, real estate, or other activity.
3. Exception, may:

* Establishing or owning a company from one person.

* Establishing a non-profit company that invests its profits to achieve its purposes without distributing profits.

 

Article (9) – Forms and Nationality of Companies:
1. The Company takes one of the following forms:
   Partnership Company – Simple Partnership Company – Limited Liability Company – Public Joint Stock Company – Private Joint Stock Company.
2. Any company that does not take one of these forms shall be deemed void.
3. Every company established in the UAE, including free zones, that holds the nationality of the country.

 

Article (76) – The Company’s Capital:
1. The Company shall have sufficient capital to achieve the purpose of its incorporation and shall consist of shares of equal value, and the Council of Ministers, upon the proposal of the Minister, in coordination with the competent authorities, may issue a resolution specifying a minimum capital of the Company.
2. The shares shall be in cash, in kind, or one of them, and shall be paid in full upon establishment.
3. The cash shares shall be deposited in one of the banks operating in the State, and the Bank may only pay them to the directors of the Company after submitting proof of the company’s registration with the competent authority, and within the limits stipulated in the contract of his appointment.

 

To view the official decree: Federal Decree-Law No. (20) of 2025 Amending Some Provisions of Federal Decree-Law No. (32) of 2021 on Commercial Companies