UAE Law and Practice Contributed by: Amir Alkhaja, Areen Jayousi, Gulsun Ozmen and Alia AlMarzooqi, Habib Al Mulla & Partners
Habib Al Mulla & Partners 14th Floor, O14 Tower
Al Abraj Street Business Bay Dubai UAE Tel: +971 4 423 0000
Email: info@habibalmulla.com Web: www.habibalmulla.com
1. Legal System 1.1 Legal System and Judicial Order Civil Law Foundations
Financial Free Zone Courts The Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) each maintain separate common law court systems operating in English, with jurisdiction over civil and commercial matters arising within those zones. The DIFC courts apply common law principles as developed in Eng - land and Wales and are widely regarded as a sophis - ticated dispute resolution forum. Both the DIFC courts and the ADGM courts regularly enforce each other’s judgments and have entered into recognition arrange - ments with various international courts, adding signifi - cantly to their utility in cross-border disputes. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments General Framework Foreign investment in the UAE mainland is governed by the Commercial Companies Law (Federal Decree Law No 32 of 2021 as amended by Federal Decree Law No 20 of 2025) with implementing Cabinet deci - sions. The current framework permits 100% foreign ownership across the majority of commercial activities on the mainland. The limitation on foreign ownership is defined by reference to a “List of Activities with Strate - gic Impact” established by Cabinet decision (No 55 of 2021), which identifies the activities reserved for UAE national ownership or UAE national-majority owner - ship; all activities not appearing on the Negative List may be conducted through a wholly foreign-owned entity.
The UAE operates a civil law system, rooted primar - ily in codified legislation that draws significantly from Egyptian civil law (itself derived from French civil law principles) alongside an overlay of Islamic (Sharia) principles, particularly in areas of personal status, inheritance and certain aspects of commercial law. The primary codified instruments include the Civil Transactions Law (Federal Decree Law No 5 of 1985, as comprehensively amended by Federal Decree Law No 25 of 2025 coming into force on 1 June 2026) and the Commercial Transactions Law (Federal Law No 18 of 1993). There is no doctrine of binding judicial precedent as understood in common law systems, although courts give significant weight to decisions of higher courts, particularly the Federal Supreme Court. Federal and Emirate Court Structure The UAE constitution establishes a dual court struc - ture comprising a federal judiciary and independent emirate-level judiciaries. The federal court system consists of the Federal Supreme Court (the apex court, sitting in Abu Dhabi), Federal Courts of Appeal and Federal Courts of First Instance. However, the emirates of Abu Dhabi, Dubai and Ras Al Khaimah have each exercised their constitutional right to main - tain independent local court systems, with their own courts of first instance, courts of appeal and courts of cassation. In practice, the majority of commercial liti - gation is conducted before the Dubai and Abu Dhabi local courts.
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