Definition

A Commercial Companies Law is the foundational corporate statute that defines the types of business entities that may be established within a jurisdiction, the requirements for their formation and registration, their governance structures, shareholder rights and obligations, capital requirements, and the procedures for merger, dissolution, and liquidation. It serves as the primary legal architecture for all private-sector economic activity.

UAE Context

The UAE’s current Commercial Companies Law is governed by Federal Decree-Law No. 32 of 2021 (amending the original Federal Law No. 2 of 2015), which introduced significant modernisations. The law recognises seven types of commercial companies: general partnership, limited partnership, joint venture, public joint stock company (PJSC), private joint stock company, limited liability company (LLC), and single-person company. The 2020 and 2021 amendments removed the mandatory 51 percent Emirati ownership requirement for most sectors, allowed single-person LLCs, strengthened corporate governance standards, and introduced provisions for digital incorporation processes.

Key Data

The LLC remains the most common business structure in the UAE, accounting for the majority of new company registrations. Federal and emirate-level licensing authorities — including the Department of Economic Development in each emirate — administer company registration under the law. The amendments aligned UAE corporate law with OECD governance standards, including enhanced requirements for board composition, auditing, and financial disclosure for public companies.

Vision 2031 Significance

The Commercial Companies Law is the legislative backbone of the UAE’s business environment. Its progressive modernisation — particularly the ownership reforms and digital incorporation provisions — directly supports the country’s competitiveness rankings and its ability to attract the volume and quality of private-sector investment required to achieve Vision 2031 economic targets.

Related Terms

• FDI Law — The foreign ownership provisions embedded within the Commercial Companies Law amendments.
• Free Zones — Business jurisdictions with their own corporate regulations, operating alongside the federal law.
• Corporate Governance — Standards for board oversight and transparency mandated by the law.
• Department of Economic Development — Emirate-level authority administering company registration.