TRW & Co · Banking and finance
Taking Security Over Assets in the UAE
Taking security over assets UAE businesses own is possible for receivables, accounts, inventory, land and shares, but each asset has its own law and register. Movables follow a federal law and national registry, land follows emirate mortgage rules, and the DIFC and ADGM run separate regimes. This guide explains how to create, perfect and enforce each type of security.
Key pointPriority over movables depends on when security became effective against third parties, not when the contract was signed, so a lender that delays filing its registry notice can rank behind a later creditor that filed first.
At a glance
Movables under federal law
Federal Law No. 4 of 2020 covers present and future movables, extends to proceeds by default and is perfected by registry notice, possession or control.
National collateral registry
Notices are filed on the Emirates Movable Collateral Registry, operated by Emirates Integrated Registries Company, and priority generally follows the time of third-party effectiveness.
Land is emirate-specific
In Dubai a mortgage has effect only once registered with the Dubai Land Department, and mortgagees must be licensed banks or finance companies.
Financial centres differ
The DIFC Law of Security 2024 follows the UNCITRAL model, while ADGM companies must register charges with the Registrar within 21 days of creation.
Guarantees have a clock
A guarantor is discharged unless judicial claims start against debtor and guarantor within six months after the debt falls due under the new civil code.
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Taking security over assets UAE-wide is possible for almost every asset class, but there is no single security law or single register. Movables such as receivables, bank accounts, inventory and equipment follow a federal law and a national online registry; land follows the mortgage law of the emirate where it sits; shares follow company law; and the DIFC and ADGM run their own common-law regimes. Getting the right instrument on the right register is what makes security work.
This guide is for lenders, suppliers, investors and borrowers who want to know how security is actually created, perfected and enforced in practice. It works asset by asset, compares the main routes, and flags the mistakes that turn apparently secured creditors into unsecured ones. As of October 2026 it reflects the new Civil Transactions Law in force since 1 June 2026.
The short answer: how security over assets UAE law recognises works
Four rules explain most of the system.
- Movables are federal. Federal Law No. 4 of 2020 on Securing Rights in Movables lets a debtor grant security over present and future movable assets, and the security becomes effective against third parties by registration, possession or control.
- Land is local. Each emirate has its own land registry and mortgage rules. In Dubai a mortgage has no effect until registered with the Dubai Land Department.
- Some assets have their own registers. Vehicles, vessels, aircraft, listed securities and intellectual property follow specialist registration systems and are outside the movables law.
- The DIFC and ADGM are separate. Companies there grant security under their centre's own law and register it with the centre's registrar.
For security over assets UAE courts will respect, priority generally follows the order in which security became effective against third parties. A creditor that signs a perfect document but never files it may rank behind everyone who did.
The legal framework
Movables: the federal security law
Federal Law No. 4 of 2020 replaced the earlier 2016 law on mortgaging movables. It covers tangible and intangible movables, existing or future, and allows security for present or future, fixed or fluctuating obligations. Unless the parties agree otherwise, the security extends to proceeds, products and replacements. It excludes movables that must be recorded in a special registry, wages and salaries, and public and waqf property.
Third-party effectiveness comes through a notice on the Emirates Movable Collateral Registry, operated by Emirates Integrated Registries Company, or through possession or control. For bank accounts, the account bank has priority and a control agreement ranks ahead of other competing interests.
Land: emirate mortgage laws
In Dubai, Law No. 14 of 2008 concerning Mortgages requires registration with the Dubai Land Department, limits mortgagees to banks and finance companies licensed for property finance, and allows mortgages over musataha rights and long leases or usufructs for their term. Abu Dhabi and the northern emirates run their own registration regimes, so the form and filing route follow the land's location.
The civil and commercial codes
The new Civil Transactions Law supplies the general rules on real rights, possessory pledges and personal guarantees, while the Commercial Companies Law governs share pledges in onshore companies. Ranking on insolvency is decided under the Financial Restructuring and Bankruptcy Law, Federal Decree-Law No. 51 of 2023.
The DIFC and ADGM
The DIFC replaced its 2005 security law with DIFC Law No. 4 of 2024, the Law of Security, modelled on the UNCITRAL Model Law on Secured Transactions. It expressly covers digital assets and electronic trade documents and gives certain acquisition financiers super-priority. In ADGM, the Companies Regulations 2020 require a company to register a charge with the Registrar within 21 days of creation; an unregistered charge is void against a liquidator, administrator or creditor.
Security over assets UAE companies hold: asset by asset
| Asset | Typical instrument | How it is perfected | Points to watch |
|---|---|---|---|
| Trade receivables | Security agreement or assignment under the movables law | Registry notice; notice to account debtors when collecting | Describe future receivables and proceeds; check anti-assignment clauses in customer contracts |
| Bank accounts | Account security with a control agreement | Control agreement with the account bank, plus registry notice | The account bank's own rights rank first; agree when the debtor loses access |
| Inventory and equipment | Movables security agreement | Registry notice, or possession | Collateral moving between emirates or free zones; supplier retention-of-title claims |
| Land, buildings, musataha and long leases | Registered mortgage | Registration with the relevant emirate land department | Mortgagee eligibility rules; term of a lease or musataha must cover the loan |
| Shares in an onshore LLC | Share pledge | Notarised pledge recorded with the licensing authority | Pre-emption rights, memorandum restrictions and court-supervised sale |
| Vehicles, vessels and aircraft | Specialist mortgage or pledge | Traffic, maritime or aviation register | Outside the movables law; separate filings and fees |
Receivables and contract rights
Receivables are the backbone of working-capital lending. A single registry notice can cover all present and future receivables of a described class, which avoids refiling each time a new invoice is raised. The practical limit is the underlying contract: customer contracts that restrict assignment can complicate collection, so diligence should review the largest customer agreements before closing.
Inventory, equipment and suppliers
Inventory turns over constantly, which is why, in any package of security over assets UAE distributors grant, the law's treatment of proceeds matters. Suppliers who sell on credit can also use the movables law to protect themselves, rather than relying solely on an unregistered retention-of-title clause. Where equipment is leased or sold on deferred terms, the financier should file early to secure priority.
Shares
Share pledges are the main tool in acquisition finance. Onshore LLC share pledges are documented by notarised instrument and recorded with the licensing authority, and enforcement typically involves a sale in which the other partners' pre-emption rights and the memorandum's transfer rules must be respected. This is one reason acquisition structures often insert a DIFC or ADGM holding company, whose shares can be charged under English-style rules. Our page on secured lending in the UAE covers how lenders combine these layers.
From term sheet to perfected security: the process
- Map assets to jurisdictions. List each asset, where it is located, which entity owns it and whether it sits onshore, in an ordinary free zone, or in the DIFC or ADGM.
- Search existing encumbrances. Search the collateral registry, the land registers and, for financial-centre entities, the charges register. Ask for releases of anything that will rank ahead.
- Confirm capacity and approvals. Check constitutional documents, board and shareholder approvals, signing authority and any regulatory consent needed to grant security.
- Document each layer. Prepare the movables security agreement, mortgage application, share pledge, account control agreement and guarantees, with Arabic versions where a registry or court requires them.
- File immediately after signing. Register the collateral notice, the mortgage and the share pledge as soon as documents are signed, and keep date-and-time stamped evidence.
- Release funds against perfection evidence. Make registration confirmations, title extracts and legal opinions conditions precedent to drawdown.
- Monitor during the life of the loan. Update registry descriptions when collateral changes, track expiry of filings and leases, and diarise guarantee deadlines.
Enforcement: how secured creditors realise value
When it comes to enforcing security over assets UAE law offers different routes for each asset class. The movables law allows two broad routes. The secured creditor can enforce out of court after serving a formal notice on the grantor and debtor identifying the collateral and how, when and where it intends to enforce. Alternatively, it can apply to the judge of urgent matters for repossession and sale orders, which can be granted without notice and follow an expedited timetable.
Land enforcement is court-led. In Dubai, the mortgagee serves prior notice through a notary public, then asks the execution judge to attach the property for sale by public auction under Land Department procedures. Clauses that let a lender take ownership automatically on default are void, so a lender plans for a sale rather than a transfer.
Enforcement against a guarantor has its own clock. Under the new Civil Transactions Law, a guarantor is discharged if the creditor does not start judicial claim proceedings against both the debtor and the guarantor within six months after the debt falls due. A secured lender negotiating a standstill must decide early whether to file protectively. See our guide to guarantees under UAE law.
Insolvency changes the picture. Once bankruptcy or restructuring proceedings open, a moratorium may restrict enforcement and the court supervises realisation. Properly perfected security still ranks ahead of unsecured claims, which is why perfection is the single most valuable step. Our insolvency and bankruptcy practice covers how secured creditors are treated in proceedings.
Free zones, Islamic finance and suppliers: special cases
Ordinary free zones
Companies licensed in ordinary free zones, such as those in Dubai and the northern emirates, generally grant security over their movables under the federal law, so the national registry remains the place to file. What changes is the corporate layer: free zone authorities have their own rules on share transfers, approvals and sometimes on recording pledges. Check the authority's requirements before signing rather than at enforcement, because a pledge that cannot be transferred on enforcement is worth far less than it appears.
Islamic structures
Shari'a-compliant facilities rely on the same perfection rules. In a murabaha the financier takes security for the deferred sale price; in an ijara it may already own the asset and need only protect its title. The security over assets UAE Islamic financiers take is therefore drafted to secure a sale or rental obligation rather than interest, but the registry, land and share formalities are identical. Our page on Islamic finance in the UAE explains the structures.
Trade creditors and suppliers
Security over assets UAE suppliers can take is often overlooked. A supplier selling equipment or stock on credit can register its interest on the collateral registry, which gives it a far stronger position than an unregistered retention-of-title clause if the buyer fails. For unsecured trade debts, the alternatives are payment orders, cheque execution and ordinary claims, covered on our debt recovery page.
An illustrative scenario
Illustrative only; generic parties. A distributor licensed on the Dubai mainland seeks a revolving facility from a UAE bank. It owns a warehouse on a long lease in an industrial area, holds inventory in a free zone logistics hub and invoices customers across the GCC. Its parent, an ADGM holding company, owns all its shares.
The package that works has five parts: a movables security agreement over receivables, inventory and equipment with a registry notice describing future assets and proceeds; an account control agreement over the collection account; a registered mortgage over the leasehold interest for a term that outlasts the facility; a share pledge by the ADGM parent, registered as a charge in ADGM and recorded onshore; and a parent guarantee drafted with express joint liability. Each layer is filed on the day of signing, and drawdown waits for the confirmations.
The weak points are equally clear. Inventory held in the free zone must be traceable and insured, GCC receivables may be governed by foreign law, and the lease term must be checked against the facility's maturity.
Common mistakes that undermine security
Signing but not registering
The most common failure is administrative. A security agreement over movables that is never noted on the collateral registry, or a mortgage that is signed but not registered with the land department, will not give the priority the lender expects. Competing creditors who filed first can rank ahead, and an insolvency officer may treat the lender as unsecured. Make filing a closing deliverable with a named owner, and keep the stamped confirmation on the credit file.
Describing collateral too narrowly
The movables law lets a notice cover future assets and proceeds, but only to the extent the description captures them. A notice listing specific machines by serial number will not catch replacements; a notice covering "receivables under contract X" will not catch new customers. Use descriptions that are broad enough to follow the business as it changes, while specific enough to be clear.
Ignoring where the asset actually is
An English-law facility agreement does not make the security English. Onshore land, accounts and movables follow UAE law; DIFC and ADGM entities follow their centre's rules; foreign assets follow their own law. Lenders sometimes discover at enforcement that a key asset was never covered because it sat in a different emirate, a free zone warehouse or a foreign subsidiary.
Forgetting releases and cancellation
Borrowers suffer too when old security lingers. The movables law requires a registration to be cancelled promptly once the debt is repaid or the parties agree, and a secured creditor that fails to do so risks liability for the borrower's loss. Borrowers refinancing should insist on release deliverables, and lenders should run a release process as carefully as the original filing.
Cross-border deals
International lenders financing UAE businesses usually combine English-law finance documents with UAE-law security, sometimes with a DIFC or ADGM holding layer in between. The security agent onshore often needs to be a UAE-licensed institution, especially for land, so syndicates appoint a local bank in that role. Intercreditor terms must then work across all three legal systems.
Lenders from the UK, Singapore, India or China should also plan for translation, notarisation and attestation of foreign corporate documents, and for how a foreign judgment or award would be enforced in the UAE if the borrower defaults. For property-backed lending, see our guide to real estate finance and mortgages.
Checklist for lenders and borrowers
Before closing, test the security over assets UAE courts will be asked to enforce against this list.
- Every material asset is mapped to its jurisdiction, owner and register.
- Searches show no prior-ranking security, or releases are in hand.
- Corporate approvals and signing authority are documented.
- Registry notices describe future assets and proceeds where intended.
- Mortgages, share pledges and financial-centre charges are registered, with evidence on file.
- Account control agreements are signed by the account bank.
- Guarantees state joint liability expressly, and the six-month claim window is diarised.
- Release mechanics are agreed for refinancing.
Well-perfected security over assets UAE law recognises is usually the difference between a full recovery and a long unsecured claim. For structuring, documentation or enforcement strategy, contact TRW & Co. Where court representation is needed, we work alongside locally licensed advocates and registered DIFC and ADGM practitioners.
Frequently asked questions
01How do you register security over movable assets in the UAE?
Security over movables onshore is made effective against third parties by filing a notice on the Emirates Movable Collateral Registry, operated by Emirates Integrated Registries Company, or by taking possession or control. The notice identifies the grantor, the secured creditor and the collateral, and can describe future assets. Priority generally follows the date and time the security became effective against third parties. The registry does not check the accuracy of what is filed, so the creditor must ensure the description is correct and complete.
02Can a foreign bank take a mortgage over Dubai property?
Dubai's mortgage law limits mortgagees to banks and finance companies licensed to provide property finance, and mortgages only take effect once registered with the Dubai Land Department. International lenders therefore commonly appoint a UAE-licensed bank as onshore security agent to hold the mortgage for the syndicate. Abu Dhabi and the other emirates apply their own registration rules, so eligibility and process should be checked for the emirate where the land is located before the deal is structured.
03Can I take security over shares in a UAE LLC?
Yes. Shares in an onshore limited liability company can be pledged under the Commercial Companies Law by a notarised instrument recorded with the licensing authority. Enforcement usually involves a sale in which the other partners' pre-emption rights and the memorandum of association's transfer provisions must be respected, which can slow realisation. For acquisition finance, lenders often prefer a charge over shares in a DIFC or ADGM holding company, combined with onshore security over the operating assets.
04Does a free zone company use the federal movables law?
Companies in ordinary free zones generally grant security over their movables under the federal law and file on the national collateral registry, although free zone rules may affect share transfers and approvals. The DIFC and ADGM are different: companies there grant security under their own centre's legislation and register it with the centre's registrar. Always confirm which regime applies to each entity in the group before drafting the security documents.
05How is security enforced if the borrower defaults?
For movables, the secured creditor can enforce out of court after serving a formal notice identifying the collateral and the intended method, time and place of enforcement, or apply to the judge of urgent matters for repossession and sale orders on an expedited basis. For Dubai land, the mortgagee serves notice through a notary public and then applies to the execution judge for attachment and sale at public auction. Clauses allowing the lender to take ownership automatically are void.
06What happens to my security if the borrower goes bankrupt?
Properly perfected security generally ranks ahead of unsecured claims under the Financial Restructuring and Bankruptcy Law, but opening proceedings may trigger a moratorium that pauses enforcement, and the court supervises how secured assets are realised. Security that was never registered may be treated as unsecured. A creditor's position in insolvency therefore depends largely on decisions made at closing: correct instruments, complete descriptions and timely filing.
Sources and official materials
- Federal Law No. 4 of 2020 on Securing Rights in Movables — Creation, perfection, priority and enforcement of movables security
- Dubai Law No. 14 of 2008 concerning Mortgages — Mortgagee eligibility, registration and enforcement in Dubai
- Dubai Land Department — Registration of mortgages over Dubai real property
- Federal Decree-Law No. 25 of 2025 (Civil Transactions Law) — General rules on real rights, pledges and guarantees
- Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy — Moratorium and secured creditor ranking
- ADGM Rules and Regulations — Companies Regulations 2020 including registration of charges
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.
