UAE Law and Practice Contributed by: Ahmed Ibrahim, Malack El Masry and Maryam Quadri, IN’P IBRAHIM .N. PARTNERS
2. Overview of Regulatory Field 2.1 Acquiring a Company Acquiring a Private Company
Recent amendments to the Commercial Compa - nies Law pursuant to Federal Decree-Law No 20 of 2025 aim to further strengthen the competitiveness of the UAE’s business and investment environment. The amendments include the introduction of multiple classes of shares in a limited liability company (LLC), permissibility of migration of companies from main - land UAE to other freezones or financial freezones, and statutory recognition of drag-along and tag-along rights. Previously implemented primarily through con - tractual shareholder arrangements, these mechanisms may now be reflected in a company’s constitutional documents, enhancing enforceability and alignment with international M&A practice. This development provides greater certainty around exit mechanics and minority protection in private company acquisitions. Enhanced AML and beneficial ownership verification requirements may also affect transaction execution, particularly in cross-border structures, potentially extending approval and onboarding timelines. There is more regulatory control of public mergers and acquisitions, as explained below. Public Mergers Two companies that are merging will be required to get the appropriate board approval and call a gen - eral assembly to approve the merger. This will involve formal valuations of both companies. The relevant regulatory approvals will also be required. For public companies, these are acquired from industry-specific regulators, the Capital Markets Authority (CMA) and the Department of Economic Development (DED), usually by completing applications and submitting documentation. Where the applicable economic concentration thresholds are met, the merger may also require pri - or approval from the Ministry of Economy under the UAE’s competition regime before completion. An application will need to be submitted to the CMA, and a merger certificate obtained from the CMA approving the merger, before said merger can be com - pleted. The CMA has 20 business days from the date of complete submission to issue a decision approving or denying the application. Practically, initial approval
The most common way to acquire a private company is through a share purchase. Asset purchases exist in the UAE but are less common, owing to a lack of legal precedent and formality. The UAE has introduced a federal corporate tax, which came into effect in June 2023. The implementation of this corporate tax has had a significant impact on potential transactions, as tax implications are now being factored in during an acquisition. Furthermore, the practicality of moving assets is more complicated in the UAE owing mainly to the require - ment of tripartite agreements to transfer assets (they do not automatically transfer by operation of the busi - ness of the company). A private company can also be acquired through a statutory merger, which allows the transfer of assets by operation of law. This was previ - ously not common practice owing to the lack of prec - edents and the long procedural requirements in rela - tion to creditor objections. However, this is no longer the case, and mergers have started to become more popular because of the rising demand to consolidate entities working in the same sector. The merger of companies is clearly envisaged under the applicable law and there have been more mergers in the past few years than previously. However, these mergers have been of private and public joint stock companies, rather than limited liability companies. In addition, the UAE Commercial Companies Law (Federal Law No 32 of 2021) or CCL, which came into force on 2 January 2022, introduces key changes that contemplate two new corporate vehicles, a special- purpose acquisition vehicle (SPAC) and a special-pur - pose vehicle (SPV). It is anticipated that SPACs will increasingly be used as vehicles to acquire or merge with another company. The CCL also recognises the concept of an SPV, which is defined as a company established for the purpose of separating the obliga - tions and assets associated with a specific financing operation from the obligations and assets of its parent entity. An SPV can offer a strategic structuring propo - sition for receiving and issuing equity investments.
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