The UAE’s business landscape has hit a significant milestone, with over 1.4 million companies now operating in the country. This announcement from the UAE Ministry of Economy comes alongside the unveiling of major amendments to the Commercial Companies Law, designed to enhance flexibility and cement the nation’s status as a leading global hub for entrepreneurs and investors.
Pioneering Legislative Reforms
Minister of Economy and Tourism Abdulla bin Touq Al Marri explained that the new Federal Decree-Law No. 20 of 2025 is a strategic move to future-proof the UAE’s business ecosystem. A key amendment allows companies to transfer their commercial registration between emirates, free zones, and financial free zones, enabling businesses to relocate without dissolving their legal entity or voiding existing contracts.
“This is a pivotal milestone that reinforces the UAE’s position as one of the most competitive and flexible business environments regionally and globally,” said Bin Touq.
For the first time in the region, the law permits multiple quota and share classes for Limited Liability Companies (LLCs), a feature typically reserved for joint stock companies in other markets. This provides founders and VCs with greater flexibility in structuring ownership, financing rounds, and exit strategies. The law also permits companies to convert between different legal forms and strengthens alignment between federal and free zone regulations.
A Surge In Entrepreneurial Activity
The impact of progressive legislation is already clear. Since the Commercial Companies Law was first updated in September 2021, approximately 760,000 new companies have been established, marking a 118.7% increase.
The momentum accelerated in 2025, with around 250,000 new companies registered this year alone. The SME sector has also seen remarkable expansion, with the number of companies owned by UAE nationals growing by 63% over the last five years. Following these new amendments, officials anticipate a further 10-15% rise in company registrations within the first year.
Broader Economic Impact
The nation’s economic dynamism extends beyond company formation. In 2025, the UAE registered 37,794 trademarks, while intellectual property filings grew by 124% over the past four years, signaling a deepening innovation ecosystem.
Tourism has also become a powerful economic engine, with its contribution to GDP soaring to 15% in 2025, valued at AED 291 billion. This marks a 216% growth over four years.
Supported by the robust performance of non-oil sectors, which now constitute 77.5% of the GDP, the UAE economy is projected to grow by 5% in 2025. These developments are aligned with the “We the UAE 2031” vision, which aims to establish the nation as a global leader in proactive regulation for new economy sectors.
About The UAE Ministry of Economy
The Ministry of Economy of the United Arab Emirates is responsible for formulating and implementing economic policies that drive diversification and sustainable growth. It focuses on creating a competitive, knowledge-based economy by enhancing the business environment, promoting trade, attracting investment, and supporting national industries and SMEs.
Source: Fast Company Middle East
