UNITED ARAB EMIRATES Trends and Developments Contributed by: Yasser Omar and Laryssa Perkins, Hadef & Partners LLC
Resilient Capital Markets and Evolving Corporate Governance While the UAE’s initial public offering (IPO) market remains resilient, the focus in 2025 has shifted towards deepening market sophistication and strengthening corporate governance. The pipeline for IPOs remains strong for 2026, with market sentiment indicating an expected increase in secondary offerings from major shareholders as recently listed companies mature. Governance reforms in 2025 include Securities and Commodities Authority Decision No (24) of 2025, which introduces to Securities and Commodities Authority Decision No (3/RM) of 2020 Regarding the Approval of the Public Joint Stock Companies’ Gov - ernance Manual a conditional exception to the prohibi - tion of an individual holding both Chair and CEO roles for companies listed on, for example, the Abu Dhabi Securities Exchange or the Dubai Financial Market. Under this new amendment, a Chair-CEO dual role is permitted, but only under stringent conditions, such as requiring 75% board independence, all members of the permanent board committees being independent directors, a special resolution of the general assembly to approve the combined role, and establishing a new board-level governance committee. Federal Decree-Law No (20) of 2025 was imple - mented, amending a number of key provisions of the Federal Decree-Law No (32) of 2021 On Commercial Companies (CCL). The CCL now expressly permits: • the establishment of non-profit companies, subject to the issuance of a Cabinet decision specifying the purposes and regulating the provisions and forms of such companies (Article 8 (3)(b)); • the inclusion of drag-along and tag-along style pro - visions in the memorandum or articles of associa - tion of limited liability companies or private joint stock companies (Article 14 (4)(a)); • the inclusion of mechanisms for dealing with the transfer of shares or interests upon death of a part - ner of shareholder (Article 14 (4)(b)); • re-domiciliation within the UAE, facilitating compa - nies to transfer their registration between Emirates or from a free zone to the mainland, and vice versa (Article 15 bis);
FATF mutual evaluation for the UAE anticipated in 2026. Thresholds for Merger Control Regime Announced While a new competition law framework was intro - duced by Federal Law No (36) of 2023 Regarding the Regulation of Competition (New Competition Law) with effect from 29 December 2023, the updated implementing rules in Cabinet Decision No 3 of 2025 were released in 2025 with effect from 1 April 2025. The implementing rules clarified the ratios relevant to determining if a transaction constitutes an “Economic Concentration”. Unless exempted, if, during the last fiscal year, the parties have combined annual sales in the “relevant market” in the UAE of more than AED300 million or a market share that exceeds 40% of the overall transactions in that relevant market, the Min - istry of Economy must be notified of the transaction. The Ministry of Economy has 90 days to review the application and provide its decision, and such period may be extended by 45 days or upon request for addi - tional information. A failure by the Ministry of Econo - my to issue a decision within the review period now results in a deemed rejection, a significant reversal from the previous “silence implies approval” doctrine. Until such time as the Ministry of Economy provides its approval, the parties are prohibited from initiating any actions or proceedings to complete the transac - tion. Transaction parties that meet the economic con - centration thresholds, but do not notify the Ministry of Economy or proceed with the transaction without first obtaining the Ministry of Economy’s approval will be subject to a fine of no less than 2% and no more than 10% of the total annual sales revenue of the goods or services the subject of the violation generated dur - ing the prior fiscal year. If it is not possible to deter - mine the amount of relevant revenues, the fine will be set as a fixed amount between AED500,000 and AED5,000,000. This reform transforms antitrust reviews from a proce - dural formality into a critical pre-deal strategic consid - eration for material M&A transactions.
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