UNITED ARAB EMIRATES Trends and Developments Contributed by: Yasser Omar and Laryssa Perkins, Hadef & Partners LLC
Introduction Throughout 2025, the United Arab Emirates (UAE) introduced a number of significant legal and regula - tory developments. From sweeping financial sector reforms and enhanced anti-money laundering meas - ures to pioneering ESG mandates, the UAE is rede - fining its position as a global investment hub. These changes seek to align with international standards, strengthen governance, and embrace the digital econ - omy. This article is intended to highlight some of the significant legislative developments arising in 2025 in the UAE. Reforms to Modernise and Consolidate the Financial Regulatory Framework Significant reforms were enacted, effective 16 Sep - tember 2025, to the financial sector by the introduc - tion of Federal Decree-Law No (6) of 2025 Regard - ing the Central Bank and the Regulation of Financial Institutions, Activities and Insurance Business (New CBUAE Law). The New CBUAE Law consolidates the regulation of the banking and insurance sectors under the Central Bank of the UAE (CBUAE) in one legislative instru - ment, repealing and replacing Federal Decree-Law No 14 of 2018 Regarding the Central Bank and the Regulation of Financial Institutions and Activities, and Federal Decree-Law No 48 of 2023 Regarding the Regulation of Insurance Activities. Significant changes under the New CBUAE Law include the following: • Introduction of Criminal Penalties: A notable development includes the introduction in the New CBUAE Law of a criminal penalty for any per - son that engages in regulated financial activities without a licence from the CBUAE. Any person engaging in a licensed financial activity without the relevant licence may face imprisonment and/or a fine of between AED50,000 and AED500 million. This change reflects the UAE’s commitment to strengthening the deterrent framework for unli - censed financial activities. • Broadening of the “Licensed Financial Activities” Definition: The financial activities subject to licens - ing by the CBUAE cover, for example: receiving
deposits; providing credit and financing facilities, currency exchange and money transfer services, stored value services, retail payments and digital currency services; arranging, marketing or promot - ing licensed financial activities; and acting as a principal in financial products that affect the finan - cial position of the licensed financial institution. As part of the consolidation of legislative instru - ments, the definition of licensed financial activities was expanded by the New CBUAE Law to include providing insurance, reinsurance and insurance- related professions, businesses and services. Most notably, the definition now includes the providing of open finance services and the providing of pay - ment services using virtual assets, reflecting the UAE’s pivot towards a digitally enabled financial ecosystem. • Regulation of Technology Providers Facilitat - ing Licensed Financial Activities: The CBUAE’s regulatory perimeter has also been significantly broadened to capture any person who directly or indirectly practises, offers, issues, or facilitates any licensed financial activity regardless of the means, technology, or form used. Therefore, licensed financial activities provided through emerging tech - nologies, such as decentralised finance platforms, or technology providers that facilitate, intermediate or enable the provision of licensed financial activi - ties will now be subject to the CBUAE’s licensing, regulatory, and supervisory authority under the New CBUAE Law. • Integration of Insurance Specific Regulations: Another major change is the integration of detailed insurance regulations into the New CBUAE Law. While the prior law was amended to make refer - ence to insurance, the New CBUAE Law has a dedicated section (Articles 78-106) governing the insurance sector. • Enhanced Supervisory and Enforcement Powers: The CBUAE has also been equipped with stronger supervisory tools, including “early intervention” powers to address risks before they escalate. The maximum administrative fine for licensed finan - cial institutions was substantially increased from AED200 million to AED1 billion. This new framework marks a significant shift in the UAE’s regulatory landscape in the financial sector. It
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