UAE Commercial Companies Law amendments: what Decree-Law No. 20 of 2025 changes

As of October 2026 several parts still depend on implementing regulations.

The Commercial Companies Law, Federal Decree-Law No. 32 of 2021, governs mainland companies across the UAE. Federal Decree-Law No. 20 of 2025 amends it. Law firm summaries report it was issued on 1 October 2025 and took effect on 15 November 2025, and the Ministry of Economy described it as amending 15 articles. The main changes:

• multiple classes of shares for LLCs and joint stock companies;
• re-domiciliation: moving a company's registration between emirates and between the mainland and free zones while keeping its legal personality;
• drag-along and tag-along rights, and share succession clauses;
• a deadlock tool letting the licensing authority appoint independent directors;
• a framework for not-for-profit companies;
• clearer valuation rules for in-kind capital contributions;
• a simpler LLC-to-joint-stock-company conversion and private placements for private joint stock companies.

Several of these, including share classes, not-for-profit companies and in-kind valuations, need implementing regulations. Before relying on a new feature, ask your licensing authority whether it can register it today.

Before the amendment, a UAE LLC was a blunt tool for investment: shares generally carried equal rights, so founders used side agreements or moved the holding company to ADGM or DIFC to give investors preferences. The amendment allows LLCs, as well as public and private joint stock companies, to issue more than one class of shares with different economic, voting and other rights.

Combined with the formal recognition of drag-along and tag-along rights, this lets a mainland LLC hold the kind of structure used in venture and private equity deals: preferred shares with a liquidation preference, non-voting employee shares, or founder shares with enhanced votes. Two limits remain:

• the regulations setting out how classes are created and registered were still pending in law firm commentary;
• for LLCs, the statutory pre-emption rights still apply, which can limit how drag-along clauses operate.

Share succession clauses are also now possible in LLCs and private joint stock companies, including buying a deceased shareholder's shares at an agreed or court-determined value. Founders planning a raise should still compare this with the ADGM or DIFC holding route our DIFC guide describes.

Under the amendment, a company can move its registration within the UAE, including between emirates and between the mainland and a free zone, keeping its legal personality, contracts and licences, without re-incorporating or liquidating. Bracewell notes this is subject to implementing regulations.

Until now, moving usually meant setting up a new company, transferring the business and closing the old one. That costs time and money and creates tax events. Our free zone to mainland checklist sets out the steps that migration route involves.

A continuing legal person changes the tax picture, but does not remove it. Points to check before moving:

1. Corporate tax status. A company moving out of a free zone may lose Qualifying Free Zone Person status; one moving in must meet the conditions from the right date.
2. Registrations. The corporate tax and VAT registrations should continue under the same TRN if the legal person continues, but the FTA records must be updated.
3. Licences and visas. Each authority has its own transfer process.

Confirm the regulations and both authorities' procedures first. Our redomiciliation glossary entry covers the ADGM and DIFC continuance rules.

Deadlock. Where LLC shareholders cannot agree on appointing the board or managers, the licensing authority may appoint independent, non-shareholder directors for up to one year, according to Bracewell's summary. This gives 50:50 companies a route other than court.

Conversion to a joint stock company. An LLC can convert more simply, and existing management can lead the process without first appointing a board or auditor. Private joint stock companies may raise capital by private placement under Securities and Commodities Authority rules that were still to be issued.

Free zone companies. The amendment clarifies that the Commercial Companies Law applies to free zone companies when they operate outside their free zone, while their own free zone regime still governs them inside it. For a free zone company with mainland customers, that means checking both rulebooks. Our page on Dubai Resolution 11 of 2025 covers mainland permits for Dubai free zone firms.

Not-for-profit companies. A new form must reinvest income in its objects and cannot distribute profits. Its detailed rules await regulations.

The amendment mostly adds options rather than new duties, but some housekeeping is sensible:

1. Review the memorandum of association. If you have shareholder agreement terms (preferences, drag-along, succession) that the old MOA could not hold, ask the licensing authority whether they can now be written into the MOA.
2. Check deadlock exposure. 50:50 LLCs should add a deadlock clause rather than rely on the authority's power.
3. Plan moves, do not rush them. Re-domiciliation depends on regulations and both authorities' procedures. Model the corporate tax and VAT effects before filing anything.
4. Update records. Any change to share capital, classes or ownership must also be reflected in the UBO register within the required period and, where relevant, notified to the FTA.

Law firm summaries mention wider changes to directors' duties, disclosure, audit and penalties, with transitional grace periods. Read the official text, or take legal advice, before restructuring. Our liquidation provisions page covers the parts of the law on closing a company.

• What it is: an amendment to the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), issued on 1 October 2025 and reported in force from 15 November 2025, amending 15 articles.
• Share classes: LLCs and joint stock companies can create multiple classes with different economic and voting rights.
• Re-domiciliation: a company can move its registration between emirates and between the mainland and free zones, keeping its legal personality.
• Investor terms: drag-along and tag-along rights and share succession clauses are recognised.
• Deadlock: the licensing authority can appoint independent directors for up to one year.
• New form: not-for-profit companies that must reinvest income in their objects.
• Still pending: several features, including share classes and not-for-profit companies, depend on implementing regulations.