TRW & Co · Corporate & Commercial
Corporate Restructuring in the UAE
Corporate restructuring in the UAE covers holding company insertions, moves between the mainland, free zones and financial centres, conversions, mergers and distressed reorganisations. The 2025 Commercial Companies Law amendments now allow companies to redomicile and convert while keeping their legal personality, and corporate tax reliefs can make reorganisations tax-neutral if the conditions are met.
Key pointCorporate tax reliefs for intra-group transfers and business restructurings can be clawed back if the shares or business leave the group within two years, so a reorganisation done shortly before a sale can hand the buyer a tax liability.
At a glance
Redomicile, same entity
Federal Decree-Law No. 20 of 2025 lets companies move registration between emirates, free zones and the mainland while keeping legal personality, with both authorities’ consent.
Conversion keeps personality
The 2025 amendments streamline conversion between legal forms while preserving the company’s legal personality, assets and liabilities, subject to approvals and the new form’s rules.
Two tax reliefs
Ministerial Decisions No. 132 and 133 of 2023 provide qualifying group and business restructuring reliefs, each requiring an election and subject to a two-year clawback.
Distress has its own law
Federal Decree-Law No. 51 of 2023, in force since 1 May 2024, offers preventive settlement, restructuring and bankruptcy procedures for onshore companies.
Financial centres differ
DIFC and ADGM entities use their own companies and insolvency laws and courts, so cross-jurisdiction restructurings need coordinated approvals.
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What corporate restructuring in the UAE covers
Corporate restructuring in the UAE means changing how a business is organised, owned or financed: inserting a holding company, moving entities between the mainland, free zones and the DIFC or ADGM, converting legal form, merging or consolidating subsidiaries, separating a business line for sale, reorganising shareholdings for investors or the next generation, and, where the business is under financial pressure, restructuring its debts.
Two developments make 2026 a good year to restructure. The Commercial Companies Law amendments in Federal Decree-Law No. 20 of 2025 allow companies to redomicile and convert while keeping their legal personality, and to issue classes of shares. And the corporate tax regime offers reliefs for intra-group transfers and business restructurings, provided the conditions and two-year holding periods are respected.
Restructuring becomes a legal question when the structure stops matching the business: before investment or sale, when a group outgrows a single licence, after a founder’s death or family transition, when tax registration and transfer pricing reveal inefficiencies, or when cash flow tightens. Starting early gives you choices; starting late leaves only the statutory routes.
The legal framework for corporate restructuring in the UAE
Company law onshore
The Commercial Companies Law (Federal Decree-Law No. 32 of 2021) governs onshore companies, including transfers of shares, increases and reductions of capital, conversion between legal forms, mergers and dissolution. Federal Decree-Law No. 20 of 2025 amended it in October 2025. The amendments allow a company to transfer its registration between emirates, from the mainland to a free zone and back, or between free zones while remaining the same legal entity, with shareholder approval and the consent of both licensing authorities. They also streamline conversion into another legal form while keeping legal personality.
The same amendments let LLCs issue classes of shares with different voting, dividend, redemption or liquidation rights, recorded in the memorandum and the commercial register, and require in-kind contributions to be valued by approved valuers. Several features depend on implementing Cabinet resolutions, so confirm the current practice of each licensing authority before fixing a timetable. The Ministry of Economy and Tourism lists the law and resolutions on its companies legislation page.
Free zones, the DIFC and ADGM
Each free zone has its own companies regulations and registrar, with its own procedures for share transfers, continuation and strike-off. The DIFC and ADGM have common-law-based companies and insolvency laws, familiar tools such as schemes of arrangement and members’ voluntary winding up, and their own courts. Restructurings that cross these boundaries need the consent of each authority involved.
Tax, insolvency and other overlays
The Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and Ministerial Decisions No. 132 and 133 of 2023 provide reliefs for transfers within a qualifying group and for business restructurings. Distressed restructurings sit under the Financial Restructuring and Bankruptcy Law (Federal Decree-Law No. 51 of 2023), in force since 1 May 2024. Merger control, sector regulators, beneficial ownership rules and, for family groups, the family business law also apply.
Every change of shareholder or ultimate owner must be reflected in the entity’s beneficial ownership register and notified to the registrar within the required period, so the compliance team should be part of the project from the start. Our page on beneficial ownership and registers explains these duties.
The main restructuring tools compared
Corporate restructuring in the UAE usually combines several of the tools below. The right mix depends on the starting structure, the target structure and what must be preserved, such as licences, contracts, visas or tax attributes.
| Tool | What it does | What survives | Main approvals | Watch-outs |
|---|---|---|---|---|
| Share transfer to holding company | Inserts a new parent above operating companies | Operating companies, licences and contracts unchanged | Licensing authority, pre-emption waivers, change-of-control consents | Tax relief conditions; notarisation and attestation of foreign documents |
| Redomiciliation | Moves a company’s registration between emirates, free zones and the mainland | The same legal entity, contracts and assets | Both licensing authorities and shareholders; regulators for listed or regulated companies | Depends on implementing rules and each authority’s practice |
| Conversion of legal form | Changes an LLC into a joint stock company or another form | Legal personality, assets and liabilities | Shareholders and registrar; capital markets regulator for public companies | Capital, governance and auditor requirements of the new form |
| Statutory merger | Combines companies by absorption or into a new company | All assets and liabilities pass to the surviving company | Shareholders, registrar, creditor protection period; merger control if thresholds met | Creditor objections; contract and licence transfers |
| Asset or business transfer | Moves a business line between entities | Only what is transferred | Counterparty consents, employee transfers, licences | Contracts and permits do not move automatically |
| Solvent liquidation or strike-off | Removes dormant or redundant entities | Nothing; the entity ends | Licensing authority, tax and labour clearances | Must be genuinely solvent; sequencing of clearances |
Before choosing between redomiciliation and a share or asset transfer, ask each licensing authority involved how it currently processes the route. Redomiciliation can preserve contracts, bank relationships and visas in one step, but where implementing rules or authority practice are not yet settled, a well-planned transfer may still be faster and more certain.
Holding company insertions
The most common project is inserting a holding company above operating entities that were set up one by one. Founders often choose a DIFC or ADGM holding company, or a free zone holding entity, for common-law governance, easier investor entry and cleaner exits. The shareholders transfer their shares in each operating company to the new holding company, usually in exchange for shares, which is the structure business restructuring relief is designed for. Our article on setting up a holding company covers the choice of jurisdiction.
Mergers, demergers and carve-outs
Combining subsidiaries reduces licence, audit and compliance costs. A statutory merger transfers all assets and liabilities to the surviving company, but creditors have protection rights and the process takes longer than a simple transfer. Separating a business line for sale or investment is usually done by transferring it to a new subsidiary, with contracts, employees and permits moving individually. Plan carve-outs around what the buyer will need on day one.
Shareholding and governance changes
Restructuring is often about people rather than entities: admitting an investor, providing for the next generation, or separating economic and voting rights. Share classes for LLCs, constitutional drag and tag rights and in-kind contribution rules from the 2025 amendments make this easier onshore. Changes must be reflected in the memorandum, the commercial register and the beneficial ownership register.
Tax reliefs and tax risks
Tax is often the deciding factor in corporate restructuring in the UAE. Corporate tax applies at 9% on taxable income above AED 375,000, so moving assets or businesses between group companies can crystallise gains unless a relief applies.
Qualifying group relief under Ministerial Decision No. 132 of 2023 allows assets and liabilities to move between members of a qualifying group without recognising a gain or loss, if elected and documented. Business restructuring relief under Ministerial Decision No. 133 of 2023 covers the transfer of a whole business, or an independent part of one, in exchange for shares, with only limited other consideration. Both reliefs can be clawed back if the relevant assets, shares or companies leave the group or are sold within two years.
Other points to check include the participation exemption for dividends and gains on qualifying shareholdings, tax grouping, transfer pricing on intra-group transfers, qualifying free zone person status (which a restructuring can jeopardise), VAT on business transfers and real estate, and registration fees on property transfers. The Federal Tax Authority publishes guides on each relief. See our page on corporate tax in the UAE.
A restructuring that saves tax today but sells the business within two years may hand the buyer a clawback. Plan the reorganisation and the exit together.
A practical restructuring process
- Map the current structure. Chart every entity, licence, licensing authority, shareholder, beneficial owner, bank account, visa quota, property and key contract. Identify nominee or side arrangements.
- Define the target structure. Agree with shareholders and advisers what the group should look like: holding jurisdiction, operating entities, share classes and governance.
- Choose the routes. For each step, compare redomiciliation, conversion, merger, share transfer and asset transfer on time, cost, tax and what must survive.
- Model tax and regulatory effects. Confirm relief conditions, clawback periods, merger control, sector approvals and any free zone status. Obtain FTA clarifications if the position is uncertain.
- Obtain consents. Secure shareholder resolutions, lender and counterparty consents, regulator approvals and licensing authority confirmations in the right order.
- Execute and register. Sign transfer and merger documents, complete notarisation and attestation, update commercial registers, licences, bank mandates and beneficial ownership registers.
- Clean up and monitor. Close redundant entities, transfer employees and visas, update contracts and policies, and diary relief clawback dates.
Employees, visas and licences
Employees and their residence visas are tied to the sponsoring entity. Where staff move between group companies, new employment contracts and work permits are needed through MOHRE and the immigration authorities, and accrued end-of-service benefits must be either paid or expressly assumed by the new employer. Regulated licences, such as financial services, healthcare or education approvals, rarely transfer automatically and may need fresh applications or prior consent. Schedule these steps so that no one is left without valid status and no licensed activity is interrupted.
Restructuring under financial pressure
Where a business cannot pay its debts as they fall due, corporate restructuring in the UAE moves into a different legal frame. Onshore, the 2023 Bankruptcy Law offers three procedures: preventive settlement for early distress, court-supervised restructuring with a trustee and the possibility of a plan binding dissenting creditors, and bankruptcy leading to liquidation. A debtor that has ceased paying its debts should apply promptly, and directors who delay or prefer some creditors face personal exposure.
DIFC and ADGM entities use their own insolvency laws and courts, including schemes of arrangement. Groups with entities in several jurisdictions need a coordinated plan, because the onshore regime and the financial centres do not automatically recognise each other’s proceedings. Read our pages on insolvency and bankruptcy and debt restructuring.
Solvent groups closing dormant entities should use voluntary liquidation or strike-off instead; see company liquidation in the UAE. A documented solvency assessment should come before any resolution to dissolve.
Documents and evidence to assemble
Licensing authorities, the Federal Tax Authority, lenders and any buyer will each ask for evidence. Building a single restructuring file at the start avoids repeated requests and shows that each step was properly authorised and valued.
- A current group structure chart, with licences, licensing authorities and registered addresses for each entity.
- Constitutional documents, share registers and the full history of share transfers and capital changes.
- Beneficial ownership registers and supporting identification for ultimate owners.
- Audited financial statements, management accounts and a solvency assessment for each entity involved.
- Corporate tax and VAT registrations, returns and any existing relief elections or tax group approvals.
- Material contracts, finance documents and leases, with assignment and change-of-control clauses identified.
- Employee and visa lists for each entity, and real estate and IP registrations to be transferred.
- Valuation reports where in-kind contributions, mergers or related-party transfers require them.
Risks and common mistakes
Starting the paperwork before the tax analysis
Share and asset transfers can be completed at a licensing authority in days, but undoing a transfer that triggered tax is far harder. Election deadlines, the requirement for shares as consideration in business restructuring relief, and the two-year clawback period should all be mapped before documents are signed. Where the position is uncertain, consider a clarification from the Federal Tax Authority.
Forgetting contracts, licences and visas
A new holding company or a transfer of business may trigger change-of-control or assignment clauses in leases, finance documents, distribution agreements and government contracts. Regulated licences may need prior approval. Employees and their visas are tied to the sponsoring entity. A checklist of what must move, and in which order, prevents the operating business from being disrupted.
Treating redomiciliation as automatic
The 2025 amendments create the legal basis for moving between jurisdictions while keeping legal personality, but both the departing and receiving authorities must consent, and implementing rules and practice are still developing. Confirm requirements with each authority in writing, and keep a fallback plan, such as a share transfer to a new entity, if timing is critical.
Ignoring creditors and lenders
Mergers, capital reductions and asset transfers can prejudice creditors, and the law gives them protection periods and objection rights. Facility agreements typically restrict reorganisations without lender consent. Approach lenders early with a clear explanation of the target structure; it is easier to agree than to obtain a waiver after a breach.
Leaving family and nominee arrangements unresolved
Family groups often hold entities through relatives or nominees with informal understandings. A restructuring is the right time to regularise them, align with the family business law where useful and put share classes or governance rules into the constitution. Leaving them in place carries enforceability and succession risks. See family business governance.
Cross-border restructuring
Many UAE groups have parents or shareholders abroad. Indian and Bangladeshi parents may need home-country approvals for outward investment, share swaps or changes in overseas holdings, and the restructuring should be sequenced around them. UK and Singapore holding companies raise questions of tax residence, controlled foreign company rules and treaty access. Saudi expansion often requires a separate entity, and restructuring a GCC group means dealing with several company law regimes at once.
For corporate restructuring in the UAE that involves foreign shareholders, attestation and legalisation of board resolutions, powers of attorney and passports is usually the longest lead-time item. TRW & Co coordinates across Dhaka, Singapore, London and Dubai so that foreign approvals and documents arrive when the UAE authorities need them.
Lenders and investors outside the UAE will also look at enforceability. A group whose holding company sits in the DIFC or ADGM can offer share security and governance rights under common-law rules and courts, which many international financiers prefer. Where onshore operating companies remain, security over their assets is still taken under federal law, so the finance and corporate workstreams need to be planned together rather than in sequence.
How TRW & Co helps with corporate restructuring in the UAE
We plan and implement corporate restructuring in the UAE for founders, family groups, multinationals and investors, working with tax advisers, auditors and valuers. Where representation before UAE onshore courts or the DIFC/ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners.
Structure design
We map the current group, design the target holding and operating structure, and compare redomiciliation, conversion, merger and transfer routes.
Implementation
We prepare resolutions, transfer and merger documents, run licensing authority and registrar filings, and manage attestation of foreign documents.
Contracts and consents
We identify change-of-control and assignment issues, prepare consent requests and coordinate lender and regulator approvals.
Distress and exit
We advise boards on options under the Bankruptcy Law, solvent wind-downs and pre-sale reorganisations, coordinating with insolvency practitioners and courts.
Related pages: mergers and acquisitions, free zone company formation and mainland company structures. Explore our practices or contact us at info@trw.co.
Checklist for decision-makers
- Do we have an accurate chart of every entity, licence, shareholder and beneficial owner in the group?
- Have we agreed the target structure and the reason for each change?
- For each step, have we compared redomiciliation, conversion, merger and transfer routes?
- Have corporate tax reliefs, election deadlines and two-year clawback periods been modelled?
- Have lenders, key counterparties and regulators been mapped for consent?
- Is merger control relevant to any step involving unrelated parties?
- Are employees, visas, bank mandates and beneficial ownership registers part of the plan?
- If the group is under financial pressure, have the directors taken advice on the Bankruptcy Law options?
A well-planned corporate restructuring in the UAE leaves a group easier to finance, govern and sell. For a shorter introduction, read our article on corporate restructuring.
Frequently asked questions
01Can a UAE mainland company move to a free zone without being liquidated?
The 2025 amendments to the Commercial Companies Law create a legal basis for a company to transfer its registration between emirates, between the mainland and free zones, or between free zones, while remaining the same legal entity. Shareholder approval and the consent of both licensing authorities are required, and some details depend on implementing rules and authority practice. Confirm the current process with both authorities before relying on it.
02Is an internal reorganisation subject to corporate tax?
It can be. Transfers between group companies are generally at market value, which may produce a taxable gain. Qualifying group relief and business restructuring relief, under Ministerial Decisions No. 132 and 133 of 2023, can allow transfers without recognising a gain or loss if the conditions are met and the relief is elected. Both reliefs can be clawed back if the assets or shares leave the group within two years.
03How long does a typical UAE group restructuring take?
A simple insertion of a holding company above one or two operating companies can be completed in a few weeks to a few months, depending on licensing authorities and the attestation of foreign documents. Multi-jurisdiction restructurings involving redomiciliation, mergers, regulated entities or lender consents take longer. Tax analysis and consents usually set the pace, not the registry filings themselves, so plan these first.
04Do we need merger control clearance for an internal restructuring?
Generally, transactions within a group that is already under common control do not change control and are not economic concentrations. However, restructurings that bring in a new investor, combine with an unrelated business or change joint control can be notifiable if the thresholds of AED 300 million relevant UAE sales or 40% market share are met. Check each step that involves a third party.
05What can a company do if it cannot pay its debts?
Onshore companies can use the Financial Restructuring and Bankruptcy Law, Federal Decree-Law No. 51 of 2023. Preventive settlement suits early distress, restructuring allows a court-supervised plan that can bind dissenting creditors, and bankruptcy leads to liquidation by a trustee. Directors should act promptly once payments cease, because delay increases personal exposure. DIFC and ADGM companies use their own insolvency regimes.
06Can we introduce different share classes as part of a restructuring?
Yes. Since the 2025 amendments, mainland LLCs may issue classes of shares with different voting, dividend, redemption or liquidation rights, set out in the memorandum and recorded in the commercial register. This helps separate economic and control rights for family members, founders and investors. Detailed rules depend on Cabinet resolutions, and free zone, DIFC and ADGM companies follow their own regulations on share classes.
Sources and official materials
- Federal Decree-Law No. 32 of 2021 on Commercial Companies — Onshore companies law, as amended in 2025
- Companies Legislations, Ministry of Economy and Tourism — Companies law and resolutions
- Federal Decree-Law No. 47 of 2022 on Corporate Tax — Corporate tax and restructuring reliefs
- Federal Tax Authority: Corporate Tax — Guides and decisions on reliefs
- Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy — Onshore restructuring and insolvency
- ADGM rules and regulations — ADGM companies and insolvency rules
- DIFC Courts — DIFC court for schemes and insolvency
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
