FEDERAL DECREE-LAW NO. 32 OF 2021
ON COMMERCIAL COMPANIES

HIGHLIGHTS OF LAW NO. 32 OF 2021 ON COMMERCIAL COMPANIES

The UAE Federal Decree-Law No. 32 of 2021 on Commercial Companies applies to any economic entity on the mainland that engages in any commercial, financial, industrial, agricultural, real estate, or other type of economic activity. The law came into effect on 1 January 2022 and applies to all commercial companies operating in the UAE.

AMENDMENTS TO LAW NO. 32 OF 2021 ON COMMERCIAL COMPANIES

Federal Law No. 32 of 2021, also known as the “UAE Commercial Companies Law,” is a new piece of legislation in the UAE that governs the formation, management, and dissolution of commercial companies in the country. The law replaces Federal Law No. 2 of 2015 and introduces several significant changes, including:

• The ability for companies to have a single shareholder.
• The elimination of restrictions on foreign ownership in certain sectors.
• New provisions regarding corporate governance, management, and financial reporting for companies operating in the UAE.

ISSUER OF LAW NO. 32 OF 2021 ON COMMERCIAL COMPANIES

The issuer of the UAE Commercial Companies Law is the government of the UAE. Specifically, the law was enacted and issued by the UAE’s federal government to regulate and govern commercial activities and the formation of commercial companies within the country.

WHO IS SUBJECT TO THE ‘COMMERCIAL COMPANIES LAW’?

The UAE Commercial Companies Law is primarily for businesses and individuals who intend to establish and operate commercial companies in the UAE. It provides regulations and guidelines for various types of commercial entities, including joint-stock companies, limited liability companies, partnerships, and more. The law sets out the requirements and procedures for business formation, governance, and operations, making it essential for entrepreneurs, investors, and businesses operating in the UAE.