UNITED ARAB EMIRATES Law and Practice Contributed by: Francesco Bulleri, Beshoy Mounir, Sultan Bahriddini and Noora Al Doseri, ADG Legal
ADG Legal Office 1401, 48 Burj Gate Tower Sheikh Zayed Road PO Box 413633 Dubai UAE
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1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements The UAE corporate landscape is divided broadly between mainland companies, commercial free zone entities and companies incorporated in the financial free zones, namely the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM). For mainland UAE companies, the principal corporate forms are those prescribed under Federal Decree- Law No 32 of 2021 on Commercial Companies, as amended (the “Companies Law”), namely general partnership companies, limited partnership compa - nies, limited liability companies (LLCs), public joint stock companies and private joint stock companies. The Companies Law is the principal statute govern - ing companies established in the UAE mainland. In practice, the limited liability company is the most common vehicle for privately held commercial busi - nesses, joint ventures and family-owned companies in the UAE mainland. A private joint stock company is less commonly used and is generally adopted for larger private groups, holding structures, regulated businesses or pre-IPO structures where a share-based capital structure and board-led governance model are required, but where the company is not intended to be listed as a public joint stock company. A public joint stock company is the principal form used where a company seeks to conduct a public offering, including through an IPO, and list its shares on an onshore UAE securi -
ties market. Branches and representative offices of foreign companies are also recognised, although they do not have separate legal personality from the parent company. Free zone entities are also widely used in the UAE and are typically incorporated as free zone compa - nies, free zone establishments or branches, depend - ing on the regulations of the relevant free zone. These entities are primarily governed by the rules of the rel - evant free zone authority, although certain UAE fed - eral laws may still apply. DIFC and ADGM companies are subject to separate companies law and regulatory regimes. For example, the DIFC Registrar of Compa - nies receives, reviews and processes applications for entities seeking to establish a presence in the DIFC, while ADGM-registered entities are subject to annual filing obligations administered by the ADGM Registra - tion Authority. The principal sources of corporate governance requirements for UAE mainland companies are the Companies Law (including any implementing regula - tions), the company’s memorandum of association, resolutions, and the rules of the relevant licensing authority. For private companies, governance is gen - erally driven by the Companies Law and its constitu - tional documents, including provisions on manage - ment authority, shareholder approvals, quorum, voting thresholds, transfer of shares, accounts and auditors. Additional governance requirements may apply where the company operates in a regulated sector – inter alia, financial services, banking, insurance, virtual assets or other regulated activities.
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