Enhanced Shareholder Protections in the UAE (2025)
Explore the 2025 UAE Commercial Companies Law's strategic enhancements designed to strengthen shareholder protections, especially for minority stakeholders.
A guide to the UAE's 2025 shareholder protection framework and how the updated Commercial Companies Law aims to ensure fair treatment of all shareholders.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
Enhanced Shareholder Protections in the UAE: The 2025 Legal Framework
A key objective of the UAE's new Commercial Companies Law (Federal Decree Law No. 20 of 2025) is to enhance shareholder protections, particularly for minority shareholders. The law introduces a number of important new provisions designed to ensure that all shareholders are treated fairly and that their interests are protected.
This guide explains what these new protections are and what they mean for you as an investor.
Related Services: Explore our shareholder rights and corporate governance advisory services for practical legal support in this area.
The Challenge: Why Minority Shareholders Are Vulnerable
In any company, there is a risk that the interests of minority shareholders can be overlooked or overridden by the majority. This can be a particular concern in closely held companies, where a small number of shareholders may hold a controlling interest.
The new law seeks to address this issue by creating a more level playing field and by giving minority shareholders a stronger voice.
Related: Explore our legal consultation services in Dubai for advice on your position as a shareholder.
The Legal Framework: Stronger Shareholder Protections in UAE Company Law
The new law introduces a more robust and equitable governance framework designed to protect the rights of all shareholders. Four provisions stand out.
Related: Explore our free zone company formation services for foreign investors.
1. New Rules on Related Party Transactions
The new law introduces new, more stringent rules on related party transactions. These are transactions between a company and a person related to it, such as a director, a major shareholder, or another company in the same group.
The rules are designed to prevent related party transactions from being used to benefit the related party at the expense of the company and its minority shareholders. They require that all related party transactions are approved by the board of directors and, in some cases, by the shareholders. They also require that the terms of the transaction are fair to the company.
2. Enhanced Rights to Information
The new law gives shareholders enhanced rights to request information from the company. This includes the right to inspect the company's books and records, and the right to ask questions of the directors at the annual general meeting.
These rights are intended to ensure that shareholders are kept fully informed about the company's performance and are able to hold the directors to account.
Related: Explore our minority shareholder rights advisory services.
3. A Lower Threshold for Bringing a Derivative Action
A derivative action is a lawsuit brought by a shareholder on behalf of the company. It is a powerful tool for holding directors to account for any wrongdoing.
The new law lowers the threshold for bringing a derivative action, which will make it easier for minority shareholders to act to protect the company's interests.
4. Protection Against Unfair Prejudice
The new law includes a general provision that protects shareholders against unfair prejudice. If a shareholder believes that the company's affairs are being conducted in a manner that is unfairly prejudicial to their interests, they can apply to the court for a remedy.
The court has a wide range of powers to remedy the situation, including ordering the company to buy the shareholder's shares.
For professional legal guidance, see our corporate governance advisory and Dubai free zone company formation service pages.
Conclusion: A More Secure Investment Environment in the UAE
The enhanced shareholder protections in the new UAE Commercial Companies Law are a major step forward in creating a more secure and attractive investment environment. They will provide greater protection for all shareholders, particularly minority shareholders.
They will also help ensure that the UAE remains a leading destination for foreign investment.
At Nour Attorneys Law Firm, we can advise on all aspects of the new shareholder protections in the UAE Commercial Companies Law. We can help you understand your rights as a shareholder and assist you in taking action to protect your interests. Contact us to make sure your investment is protected.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.
Nour Attorneys Team
Additional Resources
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