Big 5 MOA Changes Under UAE’s New Companies Law

Big 5 MOA Changes Under UAE’s New Companies Law Every Business Must Understand

The UAE has continued its commitment to encourage a dynamic and investor-friendly business environment with the introduction of the New Commercial Companies Law (CCL), which officially came into force on 2 January 2022. One of the key mandates under the new legislation is for all companies within its scope to amend their Memorandum of Association (MOA) to align with the updated provisions. 

The New CCL represents a transformative shift toward a more liberalized and investor-centric corporate environment. Whether you’re a multinational expanding into the region, or a startup founder setting up your first venture, the new law offers greater flexibility, reduced barriers, and streamlined compliance.

Key Changes Under the New CCL

The New CCL introduces a range of reforms aimed at improving ease of doing business and ensuring corporate transparency. Some of the most notable changes include:

1. 100% Foreign Ownership (Most Sectors)

Companies across most sectors are now permitted 100% foreign ownership, removing the long-standing requirement of having a local Emirati partner or sponsor. This landmark reform boosts foreign investor confidence and enhances competitiveness.

2. Introduction of SPACs & SPVs

For the first time, the UAE legally recognizes:

• Special Purpose Acquisition Companies (SPACs), which facilitate mergers or acquisitions with existing companies, and
• Special Purpose Vehicles (SPVs), used to isolate financial risk.

These additions create more sophisticated investment tools for global investors and UAE-based enterprises.

3. LLC Updates

The new law introduces several changes for Limited Liability Companies, including:

• Manager Terms & Proxies: Clear definitions around terms and proxy use.
• General Assembly Notices: Extended notice period of 21 days.
• Flexible Quorum: More adaptable attendance requirements for meetings.
• Reduced Statutory Reserve: Lowered from 10% to 5% of net profits.
• Dispute Resolution in MOA: Companies can now include dispute resolution mechanisms directly within their MOA.

4. PJSC Updates

Public Joint Stock Companies also see important adjustments:

• Director Replacement: Must be filled within 30 days.
• Founder Shares: More flexibility in structuring.
• Discounted Shares: Allowed with approval.
• Board Fees: Can be issued even in years with no profit, subject to shareholder consent.

5. Other Reforms

• No capital limit for founders in IPOs.
• No time restriction on PJSC share subscription periods.
• No need for a National Service Agent for foreign branches.

Is Updating the MOA Mandatory? Yes - Here’s Why?

All companies covered by the New CCL were legally required to amend their MOAs by 2 January 2023. Failure to comply may result in penalties, loss of licensing benefits, or reputational harm.

How to Update Your MOA: Step-by-Step Process

Step 1: Identify Changes required under the New CCL.
Step 2: Call a General Assembly, issuing at least 21 days' notice.
Step 3: Pass a Special Resolution (minimum 75% shareholder approval).
Step 4: Draft an Arabic Addendum reflecting the changes.
Step 5: Notarize the amended document.
Step 6: Submit to the relevant authority (e.g., DED or Free Zone) and pay applicable fees.
Step 7: Receive your updated MOA, legally recognized and compliant.

Why It Matters: Practical Implications of Non-Compliance

In case of failure to update your MOA, there may be serious business and operational consequences such as -

• Your bank may require a compliant MOA for transactions or account maintenance
• A new MOA may be needed during capital changes, share amendments, or license renewals
• It can affect director or CFO appointments and other top-level personnel decisions
• Without a valid MOA, companies may be ineligible for government or legal contracts
• Claiming government refunds or subsidies may require an updated MOA
• Establishing subsidiaries or new branches may not be possible without compliance
• Penalties and fines may apply
• Your company’s credibility and reputation may suffer

Why choose CLA Emirates for guidance & consultation?

The New Commercial Companies Law marks a transformative shift in making the UAE a truly business-friendly hub. But with every new opportunity comes the responsibility to adapt.

With over 20 years of industry experience, CLA Emirates is uniquely positioned to help businesses navigate these changes. Our team understands the law, the local landscape, and the practical steps required to keep your operations compliant and competitive.

Whether you're a startup, a multinational corporation, or expanding into the UAE from abroad, CLA Emirates offers precise legal guidance, deep regional insight, and full-spectrum support — from MOA amendments to complete Business Setup Services.

5 Big MOA Changes Under UAE’s New Companies Law