Mergers and Acquisitions in the UAE: a Complete Legal Guide for 2025

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The United Arab Emirates (UAE) has firmly established itself as the commercial and financial hub of the Middle East, attracting significant foreign direct investment and fostering a dynamic environment for corporate growth. Mergers and Acquisitions (M&A) activity remains a critical component of this economic dynamism, serving as a primary mechanism for market consolidation, strategic expansion, and the introduction of new capital and expertise. For any business or investor considering an M&A transaction in the Emirates, a thorough understanding of the evolving legal and regulatory landscape is not merely advisable—it is absolutely essential.

This comprehensive guide delves into the complete legal framework governing M&A in the UAE, with a specific focus on the critical legislative updates and regulatory shifts that have come into effect in 2025. From the foundational Commercial Companies Law to the newly enforced merger control thresholds, navigating this environment requires precision, foresight, and expert legal guidance.

The Evolving UAE M&A Landscape in 2025

The M&A market in the UAE continues its robust trajectory, driven by a post-pandemic economic recovery, strategic government initiatives, and a stable, investor-friendly regulatory environment. Deal-making activity in 2025 is characterized by several key trends:

• Sectoral Focus: Significant activity is concentrated in sectors aligned with the UAE’s national strategies, particularly green energy, artificial intelligence (AI), and the ever-resilient real estate market. The government’s push for technological advancement and sustainability is directly fueling M&A in these areas.
• Geopolitical Shift: The UAE is increasingly viewed as a strategic global headquarters, leading to a rise in complex, cross-border transactions. This shift is bringing new international players and sophisticated deal structures to the market.
• Regulatory Maturity: The continuous refinement of corporate and competition laws demonstrates the UAE’s commitment to transparency and governance, aligning its legal framework with international strategic frameworks.

Foundational Legal Pillars of UAE M&A

M&A transactions in the UAE are primarily governed by a combination of federal laws, local emirate regulations, and the specific rules of the various free zones.

1. The Commercial Companies Law (CCL)

The primary legislation governing the formation, operation, and restructuring of companies on the UAE mainland is the Federal Decree-Law No. 32 of 2021 Concerning Commercial Companies, which has seen further critical amendments in 2025.

Types of M&A Transactions

The CCL provides the legal basis for different M&A structures:

Transaction Type	Description	Legal Mechanism
Share Purchase	The acquisition of shares in the target company, resulting in a change of ownership. The company’s legal identity remains intact.	Governed by the CCL and specific contractual agreements (SPA).
Asset Purchase	The acquisition of specific assets and liabilities of the target company. Less common due to the complexity of transferring individual assets.	Requires individual transfer agreements and is not automatic by operation of law.
Statutory Merger	The legal consolidation of two or more companies into a single entity. This allows for the transfer of assets and liabilities by operation of law.	Requires board and general assembly approval, formal valuations, and regulatory sign-off from the SCA and DED.

New Corporate Vehicles

The CCL also formally recognizes two modern corporate vehicles that are increasingly relevant in M&A structuring:

• Special Purpose Acquisition Companies (SPACs): These are shell companies formed to raise capital via an Initial Public Offering (IPO) with the sole purpose of acquiring an existing private company. SPACs are anticipated to become a more common vehicle for market entry and consolidation.
• Special Purpose Vehicles (SPVs): Defined as companies established to separate the obligations and assets of a specific financing operation from its parent entity. SPVs offer a strategic structuring tool for receiving and issuing equity investments, particularly in complex financing deals.

2. Foreign Direct Investment (FDI) and Ownership

A landmark change that continues to shape the M&A landscape is the liberalization of foreign ownership rules. Amendments to the CCL removed the long-standing requirement for a UAE national to hold at least 51% of the shares in an onshore company.

Today, 100% foreign ownership is permitted for onshore companies in a wide range of commercial and industrial activities, subject to certain approvals from the relevant Department of Economic Development (DED) in each Emirate. This change has significantly simplified the structuring of M&A deals involving foreign investors, removing the need for complex nominee arrangements and fostering greater investor confidence. However, it is important to note that certain strategic sectors may still have restrictions, and the practical implementation of the 100% ownership rule can vary slightly between Emirates.

For professional legal guidance, explore our Mergers And Acquisitions, Mergers And Acquisitions Services, Strategic Mergers And Acquisitions Solutions In..., and Comprehensive Guide To Contract Drafting Services service pages.

Critical 2025 Regulatory Updates

The year 2025 has brought into sharp focus two major regulatory developments that directly impact M&A transactions: the new merger control regime and the full integration of corporate tax.

1. New Merger Control Thresholds

The most significant legal update for M&A practitioners is the enforcement of the new competition law framework. The Federal Decree-Law No. 36 of 2023 on the Regulation of Competition replaced the previous law, establishing a more robust and modern framework. Crucially, the Cabinet issued Ministerial Decree No. 3 of 2025 in January 2025, which clarified the criteria for an "economic concentration" that requires mandatory prior approval from the Ministry of Economy (MoE).

Under the 2025 Decree, a transaction is considered an economic concentration requiring a mandatory filing if either of the following thresholds is met during the last fiscal year [7]:

Threshold Type	Requirement
Turnover Threshold	The total annual sales value of the relevant parties in the UAE exceeds AED 300,000,000 (approximately USD 81.7 million).
Market Share Threshold	The total share of the relevant parties exceeds 40% of the total transactions in the relevant market in the UAE.

Mandatory Filing and Review: If either threshold is met, the parties must submit an application for approval to the Competition Regulation Committee (CRC) at the MoE at least 90 days prior to completing the transaction. The CRC has a 90-day period (extendable by a further 45 days) to review the transaction. Failure to file can result in substantial fines, underscoring the need for early competition law assessment in the M&A process.

2. Corporate Tax and UBO Regulations

The introduction of a federal Corporate Tax in June 2023 has fundamentally altered the financial and tax due diligence process in M&A. Tax implications are now a central factor in transaction structuring, valuation, and the drafting of transaction documents. Tax indemnities have become market standard, and specialized tax advice is now an indispensable component of any M&A deal.

Furthermore, the strict enforcement of Ultimate Beneficial Owner (UBO) regulations requires companies to disclose the individual who ultimately owns or controls 25% or more of the company. M&A transactions must be structured to ensure full compliance with these transparency requirements, as failure to disclose UBO information can lead to penalties and regulatory complications.

The M&A Process: A Step-by-Step Legal Guide

A typical M&A transaction in the UAE follows a structured, multi-stage process, each with distinct legal requirements.

Stage 1: Preparation and Due Diligence

This initial phase is critical for identifying risks and opportunities.

• Non-Disclosure Agreement (NDA): A legally binding agreement to protect confidential information shared during the exploratory phase.
• Due Diligence (DD): The comprehensive investigation of the target company. This is not limited to financial and commercial aspects but must include a rigorous Legal Due Diligence review covering corporate structure, contracts, litigation, intellectual property, and compliance with all UAE laws, including the New Labour Law and UBO regulations.
• Valuation: Formal valuation of the target company to determine the transaction price.

Stage 2: Transaction Structuring and Documentation

Based on the DD findings, the parties agree on the structure and terms of the deal.

• Term Sheet/Memorandum of Understanding (MOU): A non-binding document outlining the key commercial terms.
• Transaction Agreement: This is typically a Share Purchase Agreement (SPA) or an Asset Purchase Agreement (APA). The SPA is the most common and complex document, containing representations, warranties, indemnities (including the newly critical tax indemnities), and conditions precedent.
• Regulatory Pre-Filing: An early assessment of the new merger control thresholds is conducted. If a mandatory filing is required, the application to the MoE is prepared and submitted.

Stage 3: Regulatory Approvals and Conditions Precedent

This stage involves securing the necessary governmental and regulatory approvals.

• Shareholder and Board Approvals: Internal approvals from the boards of directors and general assemblies of the merging or acquiring entities.
• Ministry of Economy (MoE) Approval: Mandatory for transactions meeting the 2025 merger control thresholds.
• Sector-Specific Approvals: Approvals from regulators in specialized sectors, such as the Central Bank (for financial institutions), the Telecommunications and Digital Government Regulatory Authority (TDRA), or the Securities and Commodities Authority (SCA) for public companies.
• Creditor Objections: In the case of a statutory merger, creditors have a 30-day period to object to the merger after public notification.

Stage 4: Closing and Post-Acquisition Integration

The closing involves the execution of the transaction agreement and the transfer of ownership.

• Transfer of Shares/Assets: Formal execution of transfer documents and registration with the relevant DED or free zone authority.
• Labour Law Compliance: A key distinction must be made here: in a share purchase or statutory merger, employees generally transfer automatically. In an asset purchase, employment contracts must technically be terminated and new contracts issued by the acquiring entity, requiring careful compliance with the Federal Labour Law No. 33 of 2021.
• Post-Acquisition Integration: Legal and operational integration of the acquired entity, including updating trade licenses, bank mandates, and ensuring full compliance with all local regulations.

The Indispensable Role of Expert Legal Counsel

The complexity of M&A in the UAE—particularly with the rapid pace of legislative change in 2025—cannot be overstated. From navigating the nuances of the 100% foreign ownership rules to ensuring strict adherence to the new AED 300 million merger control threshold, the process is fraught with potential pitfalls for the uninitiated.

Expert legal counsel provides the necessary strategic oversight, due diligence rigor, and regulatory expertise to ensure a smooth and successful transaction. A specialized M&A legal team will:

• Structure the Deal: Advise on the optimal legal structure (share vs. asset vs. merger) to minimize tax and regulatory burdens.
• Conduct Due Diligence: Perform a comprehensive legal audit to uncover hidden liabilities and ensure compliance with all federal and local laws.
• Manage Regulatory Filings: Proactively manage the mandatory filing process with the Ministry of Economy and other sector-specific regulators, ensuring all deadlines are met.
• Draft and Negotiate: Draft robust transaction documents (SPAs, APAs) that protect the client’s interests, incorporating the latest market standards for indemnities and warranties.

For businesses seeking to navigate the intricacies of the UAE’s M&A environment, partnering with a law firm that possesses deep local knowledge and international experience is paramount. Nour Attorneys & Legal Consultants offers comprehensive legal support across all stages of the M&A lifecycle, ensuring your transaction is legally sound and strategically optimized.

Conclusion

The UAE’s M&A market in 2025 is defined by growth, opportunity, and increasing regulatory sophistication. The legislative updates, particularly the new merger control thresholds and the full impact of corporate tax, signal a maturing market that demands a high level of legal compliance and strategic planning. By understanding the foundational legal framework, adapting to the latest regulatory changes, and engaging expert legal counsel, investors and businesses can confidently execute M&A transactions that drive significant value and contribute to the continued economic success of the Emirates.

Related Services: Explore our Mergers And Acquisitions Uae and Mergers Acquisitions Compliance services for practical legal support in this area.

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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• Mergers & Acquisitions UAE: Legal Framework & Due Diligence Guide
• M&A in UAE: Complete Guide to Mergers and Acquisitions
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• Common Mergers And Acquisitions Mistakes to Avoid in Dubai