What do investors check in due diligence on a UAE company?

An investor, or the investor's lawyers and accountants, will ask for documents that prove each of the points below. The gaps they find often become price cuts, extra warranties or conditions to fix before completion.

What they check What the UAE rules require Source
Licence and activities The company must hold every approval and licence its activities need before it starts them [1] Art. 11
Founding documents A mainland company's memorandum, and every amendment, must be in Arabic and attested by the licensing authority, or it is void. Where there is also a foreign-language version, the Arabic text prevails [1] Art. 14
Owners on the register An LLC keeps a register of partners and sends its details, with the year's changes, to the licensing authority every January [1] Art. 74
Beneficial owners Anyone owning or controlling 25% or more of the capital or votes is a beneficial owner. The company keeps a beneficial owner record and updates it within 15 working days of any change. Commercial free zones such as DMCC are covered; the financial free zones (DIFC, ADGM) are not [6] Arts. 3, 5, 8; [16] Art. 38
Accounts and audit Every LLC and joint stock company must have an auditor and prepare annual accounts under international accounting standards, and keep its accounting records for at least 5 years [1] Arts. 26, 27
Corporate tax Companies must register with the Federal Tax Authority. Late registration carries an AED 10,000 penalty [7]
VAT Registration is mandatory once taxable supplies and imports exceed AED 375,000 over the previous 12 months [8]
Staff and visas No one may be employed without a work permit from the Ministry of Human Resources and Emiratisation, and wages must be paid on their due dates under the Ministry's rules [12] Arts. 6, 22
Brand and other intellectual property Trademarks are registered with the Ministry of Economy and Tourism. The register records owners and every assignment, transfer or licence, and registration protects a mark for 10 years from the application date [13] Arts. 5, 21
Related-party dealings For corporate tax, transactions with related parties must meet the arm's length standard, and payments to owners and directors are deductible only at market value [10] Arts. 34, 36

Beyond these, investors read the company's material contracts (customers, suppliers, leases, loans), look for disputes, and check that the bank holds current ownership and signatory details. A change of ownership can't be registered without a statement saying whether it changes the beneficial owner. [6]

Which UAE company types can issue different classes of shares?

Company type Different share classes? Source
Mainland LLC Allowed by the law since 15 October 2025. The memorandum sets the classes, and each class with its rights must be recorded in the commercial register. A Cabinet decision is to set the permitted classes, their conditions and procedures; we found none published by 29 October 2026 [1] Art. 76; [3]; [4]
Mainland public joint stock company Only as a Cabinet resolution allows. The 2025 change removed the old outright ban, but the classes still depend on that resolution [1] Art. 208; [2]
Mainland private joint stock company The 2025 amendments add no class rule of its own. Ask your lawyer how the joint stock company rules on classes apply [1]; [2]
DMCC company Yes, where the articles set out the rights of each class. Redeemable shares are allowed if the articles permit [14] Regs. 27.1, 34
DIFC company Yes, to the extent its articles of association allow [15] Art. 34

A practical limit: an LLC may have no more than 50 partners. If an investment round takes it above that, the managers must notify the licensing authority within 30 days and fix the position within 3 months, which the authority can extend by 3 more. A company expecting more than 50 owners needs a different company form. [1] Arts. 71, 75

What changed in the UAE Commercial Companies Law in 2025?

Federal Decree-Law No. 20 of 2025 amended Federal Decree-Law No. 32 of 2021 on Commercial Companies. It was issued on 1 October 2025, published in the Official Gazette on 14 October 2025, and took effect the following day. [2][4][5] The Ministry of Economy and Tourism describes the changes as updates across 15 articles plus a new article on moving a company's registration. [3]

The changes that matter most when investors come in:

  • Drag-along and tag-along. LLC partners and private joint stock company shareholders may put in the founding documents a right for one or more owners to require the others to sell to a third party when pre-agreed conditions are met, and a right for an owner to join a sale on the same terms the buyer agreed. [1] Art. 14. Before this, these terms usually sat only in a private shareholders' agreement; they can now also sit in the constitutional documents. [4]
  • A deceased owner's shares. The documents may give the other owners, or the company itself, a first right to buy a deceased owner's shares at a price agreed with the heirs. If they can't agree, the court sets the value through experts. [1] Art. 14
  • LLC share classes. Partners' shares may be split into classes that differ in value, voting, redemption, priority for profits or on liquidation, or other rights and restrictions. The Cabinet determines the classes, the conditions of each and the procedures. [1] Art. 76. The Ministry of Economy and Tourism said in January 2026 that the share categories would be set by a later Cabinet decision. [3] We found no such decision published by 29 October 2026, so check with your lawyer whether it is in force before you rely on a class structure.
  • Valuing assets put in for shares. The Ministry, with the licensing authority, sets the standards for valuing in-kind contributions and approves the valuers, except for public joint stock companies. [1] Art. 17
  • Private placement. A private joint stock company may offer its securities privately on a UAE securities market, under the regulator's conditions. One that does so and is listed on a UAE market is exempt from the one-year restriction on transferring its shares. [1] Arts. 32, 266
  • Moving registration. A company can move its registration between licensing authorities, or between a free zone and the mainland, keeping its legal personality, if both registers allow it and both authorities approve. Moves to or from a financial free zone (DIFC or ADGM) follow controls the Cabinet is to issue. [1] Art. 15 bis; [3]

What the amendments don't do: the law's employee share incentive scheme article (Article 228) sits in the part on public joint stock companies. None of the amended articles creates an equivalent scheme for LLCs. [1][2]

Do free zone companies follow the Commercial Companies Law?

Mostly not. The federal law doesn't apply to free zone companies on any matter their free zone's own laws or regulations cover. If a free zone company is allowed to work outside the zone in the UAE, its mainland branch or representative office is subject to the federal law. [1] Arts. 3, 5

So a DMCC company's share classes come from the DMCC Company Regulations [14], and a DIFC company's from the DIFC Companies Law [15]. ADGM and the other free zones have their own rules. Before an investment, read the company's own articles against its own free zone's regulations.

Should you put a holding company above the operating company?

Some owners do, so that investors buy into one top company that owns the operating businesses. Under the federal law, a holding company is an LLC or joint stock company that controls subsidiaries in the UAE or abroad, and it may only carry on its activities through those subsidiaries. [1] Arts. 268, 269

For corporate tax, dividends and gains from a qualifying shareholding can be exempt. The main conditions are a holding of at least 5%, held (or intended to be held) for 12 months without a break, in a company taxed at 9% or more. [10] Art. 23. A smaller holding can also qualify if it cost more than AED 4 million, and further conditions apply. [11] Moving existing companies under a new holding company can have tax effects of its own; the law gives relief for some transfers within a group and some business restructurings, each with conditions. [10] Arts. 26, 27

We compare the UAE holding company options on our holding companies page.

How do valuation and corporate tax affect a share issue?

  • The vote. An LLC's memorandum can be amended, and its capital increased, only with the approval of partners holding at least three-quarters of the shares represented at the general assembly. [1] Art. 101
  • Existing partners' first right. If an LLC partner sells shares to an outsider, the other partners have 30 days to buy them first. If they disagree on price, experts nominated by the licensing authority set it. [1] Art. 80
  • Assets instead of cash. If someone pays for LLC shares with assets, one or more valuers must value them at that person's expense. If the partners agree a value themselves, the licensing authority must approve it, and anyone who overstated the value pays the difference in cash. [1] Art. 78
  • Dealings with owners. Once an investor is in, the price of services, loans or assets between the company and its owners, directors and their related parties is tested against the arm's length standard. The Federal Tax Authority can ask for a disclosure of those dealings with the tax return, and for transfer pricing files where the conditions are met. [10] Arts. 34 to 36, 55
  • Audited accounts for tax. Audited financial statements are required for corporate tax where revenue exceeds AED 50 million, and for every Qualifying Free Zone Person, for tax periods starting on or after 1 January 2025. [9]

For example, an investor who puts in AED 5 million at a pre-money value of AED 15 million owns 25% of the company afterwards (5 out of 20), before any option pool, preference terms or fees. A liquidation preference or a different share class can change what each owner receives on a sale, so model what each owner would receive at several possible sale prices before agreeing the headline value.

Is raising money from investors regulated in the UAE?

It can be. Under the federal law, only a public joint stock company may offer securities to the public. No one, inside or outside the UAE, may publish an advertisement in the UAE inviting the public to subscribe for securities without the securities regulator's approval. [1] Art. 32

Where approaching investors, advising them or arranging the offer is licensed work, a licensed firm does it and contracts with you directly.

A checklist to get investor-ready

  • Your licence covers every activity the company actually carries on. [1]
  • The memorandum or articles, in their attested Arabic form for a mainland company, match how the company is actually owned and run. [1]
  • The partner or shareholder register and the beneficial owner record are current, and were updated in time after the last change (15 days for the register, 15 working days for the beneficial owner record). [6][16]
  • Trademarks are registered in the company's name, not a founder's. [13]
  • Every employee holds a work permit from the Ministry of Human Resources and Emiratisation, and wages are paid on their due dates under the Ministry's rules. [12]
  • Corporate tax and VAT registrations are in place and returns are filed. [7][8]
  • The latest annual accounts follow international accounting standards and have been audited. [1][9]
  • Loans, services and leases with founders or family are written down and priced as they would be between strangers. [10]
  • Shareholder rights you want (drag-along, tag-along, vetoes, share classes) are agreed in principle, so your lawyer can draft them into the documents and any shareholders' agreement. [1][4]
  • You know which regulator, if any, covers how you approach investors. [1]

How Marlborough Gulf helps

What we do:

  • We set out the plan and run the preparation: the gaps against this checklist, the order to fix them, and the deadline.
  • We keep the books and prepare accounts ready for audit and review.
  • We advise on how corporate tax and VAT apply to the company, its owners and any holding structure.
  • We coordinate the lawyers, auditors and other specialists so the work arrives in one place, in one timetable.

What others do: A law firm drafts the memorandum, articles and shareholders' agreement. An auditor audits the accounts. Where finding or advising investors, or arranging a share offer, is regulated, a licensed firm does it.

Marlborough Gulf does not give investment, pension or insurance advice. Regulated services are provided by licensed firms, who contract with you directly.

Accounting and bookkeeping → Corporate tax and VAT advice →

Request a consultation

Questions people ask

What do investors look for in due diligence on a UAE company?

Proof of the licence and activities, the attested founding documents, an up-to-date owner register and beneficial owner record, tax registrations and filings, audited accounts where required, staff permits, and who owns the brand. [1][6][7]

Can a UAE LLC have different classes of shares?

The law has allowed it since 15 October 2025, if the memorandum creates the classes and each one is recorded in the commercial register. The permitted classes and their conditions are to be set by a Cabinet decision, which we found no sign of by 29 October 2026, so check with your lawyer first. [1][3][4]

Are drag-along and tag-along rights enforceable in the UAE?

Since 15 October 2025 the federal law expressly allows LLCs and private joint stock companies to include them in their founding documents. [1][4] How a court applies a given clause is a question for your lawyer.

Does the new companies law apply to DMCC or DIFC companies?

Not on matters their own free zone rules cover. DMCC and DIFC companies follow their own company regulations. [1][14][15]

This guide is general information, not legal or tax advice for your circumstances.

Sources

  1. Federal Decree-Law No. 32 of 2021 on Commercial Companies, as amended by Federal Decree-Law No. 20 of 2025, UAE Legislation portal (English; the Arabic text prevails), read 29 Oct 2026. Articles 3, 5, 11, 14, 15 bis, 17, 26, 27, 32, 71, 74, 75, 76, 78, 80, 101, 208, 228, 266, 268,

    https://uaelegislation.gov.ae/en/legislations/1542

  2. UAE Legislation portal, Amendments to the Commercial Companies Law: the 2025 amending decree-law dated 1 Oct 2025, with each amended article and its previous text (Arabic), read 29 Oct 2026. https://uaelegislation.gov.ae/ar/legislations/1542/modifications
  3. Ministry of Economy and Tourism, "Ministry of Economy and Tourism reviews new amendments to the Commercial Companies Law", 6 Jan 2026 (share categories to be set by a later Cabinet decision). https://www.moet.gov.ae/en/-/ministry-of-economy-and-tourism-reviews-new-amendments-to-the-commercial-companies-law-and-their-pivotal-role-in-enhancing-competitiveness-of-the-uae-s-business-environment
  4. Gibson Dunn, "Recent Amendments to the UAE Commercial Companies Law", 17 Dec 2025 (law firm summary: Gazette date, effective date, drag-along and share classes, implementing regulations). https://www.gibsondunn.com/wp-content/uploads/2025/12/recent-amendments-to-the-uae-commercial-companies-law.pdf
  5. Baker McKenzie, "UAE: Recent amendments to the Commercial Companies Law No. 32 of 2021", 12 Dec 2025 (law firm summary: in force 15 Oct 2025). https://www.bakermckenzie.com/en/insight/publications/alerts/2025/12/uae-recent-amendments-to-the-commercial-companies-law-no-32-of-2021
  6. Cabinet Decision No. 109 of 2023 Regulating the Beneficial Owner Procedures, English version, Ministry of Economy and Tourism, Articles 3, 5 and 8. https://www.moet.gov.ae/documents/20121/0/Cabinet+Decision+109-2023+English+Version+06062024.pdf/f7138fc2-fe12-cef3-077b-b4c49c12eabd?t=1718181974877
  7. Federal Tax Authority, Corporate Tax Registration, updated 26 Oct 2026. https://tax.gov.ae/en/services/corporate.tax.registration.aspx
  8. Federal Tax Authority, Registration for VAT, read 29 Oct 2026. https://tax.gov.ae/en/taxes/Vat/vat.topics/registration.for.vat.aspx
  9. Ministerial Decision No. 84 of 2025 on Audited Financial Statements, Articles 2 and 4, Ministry of Finance. https://mof.gov.ae/wp-content/uploads/2025/04/Ministerial-Decision-No.-84-of-2025-on-Audited-Financial-Statements.pdf
  10. Federal Decree-Law No. 47 of 2022 (Corporate Tax Law), Ministry of Finance unofficial translation (original 2022 text), Articles 23, 26, 27, 34, 35, 36 and 55. https://mof.gov.ae/wp-content/uploads/2022/12/Federal-Decree-Law-No.-47-of-2022-EN.pdf
  11. PwC Worldwide Tax Summaries, UAE: corporate, income determination (participation exemption, including the AED 4 million alternative), reviewed 9 Sep 2026. https://taxsummaries.pwc.com/united-arab-emirates/corporate/income-determination
  12. Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships and its amendments, Ministry of Human Resources and Emiratisation, Articles 6 and 22. https://www.mohre.gov.ae/assets/download/3bde4984/Federal%20Decree-Law%20No.%2033%20of%202021%20Regarding%20the%20Regulation%20of%20Employment%20Relationship%20and%20its%20amendments_638990571068264034.pdf.aspx
  13. Federal Decree-Law No. 36 of 2021 on Trademarks, UAE Legislation portal, Articles 5 and 21. https://uaelegislation.gov.ae/en/legislations/1535
  14. DMCCA Company Regulations, issued 10 Oct 2024, updated 2 Jan 2025, Regulations 27.1 and 34. https://dmcc.ae/hubfs/Compliance%20Documents%202024/DMCCA%20Company%20Regulations%20-%202024%20%5BAmended%5D.pdf
  15. DIFC Companies Law, DIFC Law No. 5 of 2018, consolidated version (March 2022), Article 34(3). https://edge.sitecorecloud.io/dubaiintern0078-difcexperie96c5-production-3253/media/project/difcexperiences/difc/difcwebsite/documents/laws--regulations/companies_law.pdf
  16. Cabinet Resolution No. 134 of 2025 on the Executive Regulations of Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering, in force 14 Dec 2025, Articles 38 and 70, CBUAE Rulebook, read 29 Oct 2026. https://rulebook.centralbank.ae/en/rulebook/cabinet-resolution-no-134-2025-regarding-executive-regulations-federal-decree-law-no-10