UAE Corporate Citizenship Law: What Emirati Company Status Means for Your Business

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Boosting business: UAE's new citizenship status for companies.

Federal Decree-Law No. 20 of 2025 confirms that all UAE-incorporated companies hold Emirati nationality as legal entities, effective January 2026.
Corporate nationality is determined by place of incorporation, not the nationality of shareholders, directors, or beneficial owners.
The law covers mainland companies, free zone entities, and financial free zone companies including those in the DIFC and ADGM.
Emirati corporate status opens access to preferential trade terms under the UAE's growing network of Comprehensive Economic Partnership Agreements.
The reform does not grant personal UAE citizenship, residency rights, or passports to any individual associated with a company.
Wider amendments to the Commercial Companies Law introduce multiple share classes, simplified re-domiciliation, and stronger merger and acquisition protections.

Federal Decree-Law No. 20 of 2025 and the UAE Commercial Companies Law: Context and Scope

In January 2026, the UAE enacted Federal Decree-Law No. 20 of 2025, formally amending the UAE Commercial Companies Law to confirm that every company incorporated in the country holds Emirati corporate nationality as a legal entity. The change covers businesses registered on the mainland, in free zones such as JAFZA and DMCC, and in financial free zones including the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). For the first time, this status is stated explicitly and consistently across all UAE jurisdictions.

The reform aligns the UAE with established international corporate law practice, where a company's nationality is determined by its place of incorporation rather than the origin of its shareholders. The practical consequences are significant - particularly for businesses seeking to benefit from the UAE's expanding network of Comprehensive Economic Partnership Agreements (CEPAs), which are bilateral trade deals that provide preferential tariff access to partner markets for recognised national entities.

What the Law Actually Changes

The reform codifies a principle that was broadly recognised in international law but not explicitly addressed across all UAE jurisdictions. Previously, free zone and financial free zone companies sometimes faced questions from trade counterparties about whether they truly qualified as UAE companies for procurement and trade purposes. The new law removes that ambiguity by stating clearly that all UAE-incorporated entities - regardless of ownership structure - carry Emirati corporate nationality.

Corporate nationality belongs to the company as a juridical person, not to its shareholders or directors. A valid UAE trade licence serves as the primary evidence of Emirati company status, and no separate corporate citizenship certificate is currently mandated under the law. Authorities including customs, tax, and procurement bodies assess company nationality based on incorporation and licensing details rather than the passports of the individuals behind the business.

CEPA Access: The Core Commercial Benefit

The most immediate commercial benefit of Emirati corporate status is access to CEPAs. The UAE has signed these agreements with India, Turkey, South Korea, and several other economies, with further deals in negotiation. CEPAs provide tariff reductions, preferential market access, and other advantages to companies recognised as national entities of the signatory country.

The 2026 clarification confirms that all UAE-incorporated companies - including 100% foreign-owned free zone businesses - are eligible to be treated as Emirati entities for CEPA purposes, subject to rules of origin and documentary requirements. This removes previous uncertainty over whether free zone companies or UAE subsidiaries of multinationals could claim national entity status when seeking these benefits. Companies can now brand themselves clearly as Emirati entities in tenders and trade documentation when bidding for contracts in partner countries.

Government Procurement and Domestic Incentive Programmes

Emirati corporate status can also influence eligibility for government procurement and sector-specific incentive schemes. National-status companies are better positioned to qualify for public sector tenders that prioritise domestic entities, and to access financial support and industrial development programmes targeted at UAE companies. According to Gulf News, UAE Minister of Economy and Tourism Abdulla bin Touq Al Marri stated that the amendments are about positioning UAE companies at the forefront of global trade and investment.

Legal and advisory sources also note that Emirati-status companies may enjoy clearer recognition from international banks and regulators, because their status ties them to the UAE's legal system and regulatory oversight. This can improve risk assessments and due diligence outcomes when UAE companies seek cross-border financing or partnerships.

What Corporate Citizenship Does Not Mean

It is essential to be clear about what this reform does not do. Corporate citizenship does not grant personal UAE citizenship, residency rights, or passports to any individual associated with a company. Shareholders, directors, and beneficial owners retain their existing nationalities and must continue to meet immigration and visa requirements under separate residency schemes.

Legal advisors have described the 2026 update as a "strategic legal shift, not a personal one." The value lies in enhanced credibility, market access, and legal clarity for the business entity. Marketing or describing the reform as personal citizenship by proxy is misleading and contrary to the legal text of Federal Decree-Law No. 20 of 2025, which addresses companies, not natural persons.

Broader Reforms Under Federal Decree-Law No. 20 of 2025

The corporate citizenship provision is part of a wider package of Commercial Companies Law amendments designed to modernise the UAE's corporate legal environment. These structural changes are intended to align the UAE with leading international business jurisdictions and to attract more complex, higher-value investment structures.

Key related reforms include the following:

Multiple Share Classes

Limited liability companies (LLCs) and joint stock companies may now issue different share classes, such as preferred shares and non-voting shares. This allows more flexible fundraising, investor participation, and governance structures for businesses at all stages of growth.

Simplified Re-domiciliation

Companies can now move between emirates, or between free zones and the mainland, without losing their legal identity. This makes it easier to adapt corporate structures to changing business needs while maintaining continuous Emirati corporate nationality.

Free Zone to Mainland Integration

Free zone companies have a more straightforward path to opening mainland branches, enhancing their ability to serve domestic UAE markets while keeping their existing structure intact.

Merger and Acquisition Protections

Streamlined rules for mergers, acquisitions, and shareholder exits are now in place, alongside clearer provisions for drag-along and tag-along rights - mechanisms that protect minority shareholders and facilitate cleaner transaction processes.

What Businesses Should Do Now

Corporate services firms and legal advisors recommend several practical steps for businesses looking to make the most of the new framework. Companies should review their trade licences and corporate documents to confirm they clearly reflect UAE incorporation. Those engaged in export and cross-border trade are advised to update certificates of origin, commercial invoices, and trade agreements to correctly reference Emirati status when seeking CEPA benefits.

Businesses targeting public sector contracts may consider updating capability statements and tender submissions to highlight national entity status where procurement rules allow. For multinationals using UAE holding structures - particularly those in the ADGM or DIFC - corporate advisors suggest reviewing how clarified national status intersects with group structuring, substance requirements, and international tax planning. Some projections cited in legal commentary suggest a 15% rise in company registrations in the first year as both local entrepreneurs and international investors respond to the new regime.