TRW & Co · Technology & IP
Technology Transactions in the UAE
Technology transactions in the UAE turn on assets that are easy to lose: code, data and people. This guide explains how to structure tech acquisitions, investments, IP deals and outsourcing across onshore, DIFC and ADGM regimes, what diligence must prove, when merger control applies under the 2023 competition law, and how to keep value through integration.
Key pointMerger control under Federal Decree-Law No. 36 of 2023 is now fully operational, with Cabinet thresholds set in 2025 and implementing rules issued in 2026, so technology deals should be screened for notification at term-sheet stage rather than assumed to be too small to matter.
At a glance
Merger control now operational
Federal Decree-Law No. 36 of 2023 applies with thresholds set by Cabinet Decision No. 3 of 2025 and implementing rules issued in 2026.
Written IP assignments essential
UAE copyright law requires written, specific transfers of economic rights, so contractor and founder code must be assigned before completion.
Holding structure choices
Founders and investors often use DIFC or ADGM holding companies for common-law share terms, while onshore entities hold licences and contracts.
Data moves need a basis
Integration must respect the federal data protection law, DIFC and ADGM regimes and sector localisation rules for health, financial and government data.
New civil code applies
Federal Decree-Law No. 25 of 2025 took effect on 1 June 2026, allowing courts to review agreed compensation in deal documents.
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What technology transactions in the UAE cover
Technology transactions in the UAE are the deals through which technology, and the businesses built on it, change hands or are combined: acquisitions of software and platform companies, venture and growth investments, IP purchases and licences, joint ventures, large outsourcing and cloud programmes, and technology transfers into government and industrial projects. They differ from ordinary commercial deals because the value sits in intangible assets, people and data rather than property or stock.
Dubai and Abu Dhabi have become regional bases for technology groups, with DIFC and ADGM offering common-law holding structures and onshore Dubai and Abu Dhabi offering access to large government and enterprise customers. That combination creates choices about where to hold IP, which law governs the deal and which regulators must be notified.
The legal questions start before a term sheet. Who actually owns the code and the data? Can the founders and key engineers be retained and restricted? Does the deal need merger control clearance? Can customer data move to the buyer's systems? Getting these answers early shapes valuation and timing.
The legal and regulatory framework
No single statute governs technology transactions in the UAE. Instead, several federal laws and free-zone regimes apply at once, and the deal documents must work with all of them.
| Issue | Onshore law and regulator | DIFC / ADGM position |
|---|---|---|
| Company and share transfers | Federal Decree-Law No. 32 of 2021 on Commercial Companies; local economic departments and free-zone authorities | DIFC and ADGM companies regulations and registrars |
| Intellectual property | Federal Decree-Law No. 38 of 2021 (copyright), Federal Law No. 11 of 2021 (industrial property), Federal Decree-Law No. 36 of 2021 (trademarks); Ministry of Economy and Tourism | Federal IP registrations apply; DIFC has its own IP legislation for matters within the centre |
| Personal data | Federal Decree-Law No. 45 of 2021 on personal data protection, plus sector rules | DIFC Data Protection Law No. 5 of 2020; ADGM data protection regulations |
| Merger control | Federal Decree-Law No. 36 of 2023 regulating competition; Ministry of Economy and Tourism | Federal competition law can still apply to deals involving free-zone entities with UAE market effects |
| Contract law | Federal Decree-Law No. 25 of 2025 on Civil Transactions, in force from 1 June 2026 | DIFC and ADGM contract law, with English common law applied in ADGM |
| Tax | Corporate tax and VAT administered by the Federal Tax Authority | Same federal taxes; free-zone corporate tax regime where conditions are met |
The Ministry of Economy and Tourism publishes the federal IP laws and their implementing regulations. Data rules are summarised on the UAE Government portal. For holding structures, DIFC and ADGM each maintain their own company, data protection and court systems.
Merger control is now a live issue
Federal Decree-Law No. 36 of 2023 regulating competition introduced a meaningful merger control regime. Cabinet Decision No. 3 of 2025 set the notification thresholds, and the Cabinet has since issued the implementing regulation and a fee decision in 2026. The Ministry also published guidelines on relevant market definition in July 2026. The current texts are on the Ministry's competition legislation page.
Technology deals deserve special attention because thresholds can be met through UAE turnover or market share, and market definition in digital markets is contested. Where a transaction is notifiable, it should not be completed before clearance. Our page on merger control explains the filing process.
Deal types and how to approach them
Acquiring a technology company
Share acquisitions keep contracts, licences and employees in place but bring historic liabilities with them. Asset or business transfers let a buyer pick the IP, contracts and staff it wants, but each contract, licence and permit may need consent or novation, and employees must be moved under UAE labour law. In the UAE, where many licences and visas are tied to a specific entity, a share deal is often faster. See our mergers and acquisitions page.
Venture and growth investment
Founders frequently use DIFC or ADGM holding companies for fundraising because they offer common-law share classes, investor protections and familiar documents. The operating company onshore holds trade licences and customer contracts. Investors must check that IP created by the operating company and its contractors has actually reached the group. Our venture capital page covers term sheets and structures.
IP acquisitions, licences and technology transfer
Buying a portfolio of code, patents or trademarks without the company requires written assignments specific to each right. Trademark and patent assignments and licences should be recorded with the Ministry so they can be relied on against third parties. Where the seller keeps using the technology, a licence-back must be defined carefully. Our pages on IP licensing and software licensing cover the contracts.
Large outsourcing, cloud and joint ventures
Multi-year managed services, cloud migrations and technology joint ventures combine services, licences, data processing and sometimes staff transfer. Regulated customers must satisfy their regulators' outsourcing and data localisation rules, which can dictate where systems are hosted and what audit rights the customer must hold.
AI, data and platform deals
A growing share of technology transactions in the UAE involve AI models, training data and data-sharing platforms. These deals raise questions conventional IP clauses do not answer: who owns a model fine-tuned on the customer's data, whether outputs can be reused, and whether the training data was collected lawfully. Contracts should define each asset separately, including model weights, training datasets, prompts and outputs, and allocate ownership and use rights for each.
Data-driven deals also engage the data protection regime that applies to the parties. The DIFC has added specific rules on processing personal data through autonomous and semi-autonomous systems, and sector regulators are issuing their own AI guidance. Our page on artificial intelligence explains the developing framework.
In a technology deal the price is paid for code, data and people. If the paperwork does not prove the target owns the first two and can keep the third, the valuation has no foundation.
Due diligence: what to verify
Diligence on technology transactions in the UAE is less about land registers and more about chains of title. The core workstreams are:
- IP ownership. Written assignments from founders, employees, contractors and development agencies; registrations held in the right entity; no encumbrances or co-ownership.
- Open source. A software bill of materials, the licences that apply and any copyleft obligations triggered by distribution.
- Customer and supplier contracts. Change-of-control clauses, exclusivity, most-favoured-customer terms, uncapped liabilities and audit exposure.
- Data. Records of processing, privacy notices, transfer mechanisms, sector localisation compliance and any security incidents.
- People. Employment contracts, visas, equity plans, restrictive covenants and any claims by departing founders.
- Licences and permits. Trade licence activities that match the business, plus any sector authorisations such as payments, telecoms or health licences.
A technology acquisition, step by step
- Agree the structure and term sheet. Decide between share and asset deal, holding location, consideration mix, earn-outs and retention arrangements, and flag merger control and sector approvals.
- Run targeted diligence. Focus on IP chain of title, open source, data, key contracts and people, using technical experts for code review where value justifies it.
- Assess regulatory filings. Check whether the competition thresholds are met and whether the target's sector regulator must approve a change of control.
- Negotiate the documents. Draft warranties on IP, data and security; specific indemnities for known gaps; and conditions requiring missing assignments before completion.
- Secure key people. Put new employment contracts, equity and lawful restrictive covenants in place for founders and engineers, aligned with UAE labour law.
- Complete and record transfers. Update registers, record IP assignments with the Ministry, novate contracts and transfer domain names, repositories and cloud accounts.
- Integrate. Run data migration lawfully, align policies and licences across the group, and track earn-out and indemnity claims windows.
Make missing IP assignments a condition precedent, not a post-completion promise. Once the price is paid, a departed contractor in another country has little reason to sign. Identify every contributor to the core code during diligence and collect the assignments before signing or completion.
Key contract terms under UAE law
Warranties and indemnities in technology transactions in the UAE should be drafted with the civil code in mind. The 2025 Civil Transactions Law, effective from 1 June 2026, lets courts review agreed compensation and prevents parties excluding liability for fraud or gross negligence. Caps, baskets and de minimis thresholds are usual, but they should be framed as a balanced risk allocation.
Earn-outs need precise accounting definitions and dispute mechanisms, as disagreements often turn on revenue recognition for subscription products. Transitional services agreements must cover hosting, licences and data access for long enough to migrate. Restrictive covenants on sellers are common, but restrictions on employees must be reasonable and tied to legitimate interests; see our page on restrictive covenants.
Governing law and forum deserve deliberate choice. Many deals use DIFC or ADGM law and courts, or English law with arbitration, to obtain common-law contract principles and English-language proceedings, while local transfer documents still follow onshore formalities.
Documents to prepare
Sellers that prepare in advance shorten the process and protect value. A well-organised data room for a technology deal usually contains the corporate documents and cap table of every group entity, trade and sector licences, the IP register with registrations and assignment agreements, a software bill of materials and open-source policy, key customer and supplier contracts, data protection records and policies, security assessments and incident logs, employment contracts and equity plan documents, and tax filings.
Buyers should prepare too. An internal integration plan covering systems, data, licences and people, a regulatory filing analysis and a list of conditions precedent help negotiations stay focused. Both sides benefit from agreeing early which documents will be disclosed against the warranties and how technical information, such as source code, will be reviewed securely.
Tax considerations
UAE corporate tax applies to gains and income of UAE companies, and free-zone persons must meet the qualifying conditions to benefit from the free-zone regime, which affects where IP should be held. Transfers of IP between related parties must follow arm's-length principles under the transfer pricing rules. VAT may apply to asset transfers unless the transfer of a going concern relief applies. The Federal Tax Authority publishes guidance, and a new research and development tax incentive regime announced in 2026 may affect where development teams are located.
Risks and common mistakes
Completing a notifiable deal before clearance
The 2023 competition decree-law and the 2025 thresholds decision mean that more technology deals now require notification. Buyers sometimes assume that small targets or free-zone entities fall outside the regime, but thresholds and market effects, not company size or location alone, decide the question. Completing a notifiable transaction without clearance risks penalties and orders affecting the deal. Run a threshold analysis at term-sheet stage, using the Ministry's market definition guidelines, and build the timetable around any filing.
Buying a company that does not own its code
Start-ups often rely on founders, freelancers and offshore agencies who never signed assignments. Under UAE copyright law, transfers of economic rights must be in writing and specific, so the company may own far less than its pitch deck suggests. Discovering this at diligence is manageable; discovering it after completion is not. Map every contributor, collect assignments, and use specific indemnities, escrow or holdbacks where gaps cannot be closed before completion.
Moving data without a lawful basis
Integration usually means moving customer and employee data into the buyer's systems, sometimes abroad. The federal data protection law, the DIFC and ADGM regimes, and sector localisation rules for health, financial and government data may restrict that. Plan data migration as a legal workstream: confirm the basis for transfer, update notices, and keep regulated data in the UAE where required. Our page on cross-border data transfers explains the mechanisms.
Losing key engineers after completion
The value of many technology targets walks out of the door with its engineers. Retention bonuses, equity rollover and new contracts help, but non-compete clauses with employees must be reasonable in time, place and scope to be enforced. Visa and licence transfers can also interrupt employment if the target entity changes. Agree retention arrangements before signing, and check that every key person's visa and work permit will survive the deal structure.
Missing sector licences in the target
Fintech, health tech, telecoms and media businesses often operate under specific licences or rely on partners' licences. A buyer may find the target's activities exceed its trade licence or that a change of control needs regulatory approval. Review licensed activities against what the business actually does, and identify every regulator whose consent is required. A licence gap can delay completion or require restructuring the target before the deal closes.
The cross-border angle
Technology transactions in the UAE nearly always involve another jurisdiction, because teams, customers and investors are spread across the region and beyond.
India and Bangladesh. Many UAE technology groups have development centres in India or Bangladesh, and founders from both countries increasingly move holding companies to the UAE. Outbound investment and foreign exchange rules in the home country, local IP assignment formalities and employment law must be aligned with the UAE deal. TRW & Co's offices in Dhaka, Chattogram and Sylhet support the Bangladesh side.
United Kingdom. UK investors and acquirers often prefer English law. DIFC and ADGM structures give them common-law protections close to home, while onshore assets still need local documentation.
Singapore and China. Groups with Asia-Pacific operations frequently pair a Singapore hub with a UAE regional headquarters, and Chinese technology companies use the UAE as a gateway to the Middle East and Africa. Deal structures must consider tax residence, export controls and where IP is held.
Saudi Arabia and the GCC. Saudi Arabia's large technology market brings its own investment licensing, data and regional headquarters requirements. A UAE-held group selling into Saudi Arabia should plan its structure with both systems in view.
How TRW & Co helps with technology transactions in the UAE
We advise buyers, sellers, founders and investors on structuring, diligence, documentation and regulatory steps. Where representation before UAE onshore courts or the DIFC/ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners.
Deal structuring
We compare share and asset deals, onshore and free-zone holding structures and governing law options, and map the regulatory filings that will drive the timetable.
Technology due diligence
We review IP chain of title, open source, data protection, key contracts and people risks, and turn findings into conditions, warranties and indemnities.
Merger control and approvals
We assess competition thresholds and sector approvals and coordinate notifications with the Ministry and relevant regulators.
Transaction documents
We draft and negotiate share purchase, investment, IP assignment, licence, transitional services and joint venture agreements.
People and retention
We design founder and engineer retention, equity and restrictive covenant packages that work under UAE labour law.
Post-deal integration
We manage IP recordals, contract novations, data migration and policy alignment so the value bought is the value kept.
Explore our practices or contact us to discuss a transaction.
Checklist for decision-makers
- Have we chosen the holding location and governing law for the deal deliberately?
- Have we tested the competition thresholds and identified any sector approvals?
- Does the target hold written assignments for all core code and IP?
- Do we know what open source the product uses and what obligations it triggers?
- Can customer and employee data be moved lawfully into our systems?
- Are key engineers retained under enforceable, reasonable terms with secure visas?
- Are warranties, indemnities and caps drafted for review under the 2025 civil code?
- Have we planned IP recordals and contract novations for completion?
Teams that work through this list early close technology transactions in the UAE faster and with fewer surprises after completion.
Frequently asked questions
01Does acquiring a UAE tech start-up need merger clearance?
It may. Federal Decree-Law No. 36 of 2023 regulating competition requires notification of economic concentrations that meet thresholds set by Cabinet Decision No. 3 of 2025, which look at UAE turnover and market share. Implementing rules followed in 2026, along with market definition guidelines from the Ministry of Economy and Tourism. Size alone does not decide the question, and free-zone location does not automatically exclude a deal. Run a threshold analysis early and do not complete a notifiable deal before clearance.
02Should we hold our IP in DIFC, ADGM or onshore?
It depends on where you raise money, who your customers are and how you are taxed. DIFC and ADGM holding companies offer common-law share structures and English-language courts that investors like. Onshore entities are often needed to hold trade licences and contract with government customers. Corporate tax, the free-zone regime and transfer pricing rules affect where IP should sit. Federal IP registrations apply across the UAE whichever entity owns them.
03How do we prove a target owns its software?
Collect written assignments from every founder, employee, contractor and agency that wrote core code, check repository history against those contributors, and confirm registrations are in the target's name. Review open-source components and their licences. UAE copyright law requires written and specific transfers of economic rights, so informal arrangements are a real gap. Where assignments are missing, make them a condition to completion or protect yourself with specific indemnities and holdbacks.
04Can we move customer data to our group systems after the deal?
Often, but not automatically. The federal Personal Data Protection Law, the DIFC and ADGM data protection regimes and sector rules all apply. Health data generally must stay in the UAE unless an exemption applies, and financial and government data may carry similar restrictions. Plan migration as a legal workstream: confirm the lawful basis and transfer mechanism, update privacy notices, and keep regulated data in the UAE where required.
05Are earn-outs and warranty caps enforceable in the UAE?
Generally yes, but drafting matters. Under the 2025 Civil Transactions Law, in force from 1 June 2026, courts can review agreed compensation, and liability for fraud or gross negligence cannot be excluded. Earn-outs work best with precise financial definitions, access rights and expert determination for disputes. Many parties choose DIFC or ADGM law and courts, or arbitration, for the main transaction documents to obtain predictable common-law treatment.
06Can we stop founders competing after we buy the company?
Restrictions on sellers in a share purchase agreement are common and generally enforceable if reasonable and linked to protecting the goodwill acquired. Restrictions in employment contracts are treated more strictly and must be reasonable in duration, geography and scope. Combine seller covenants, employment terms and equity vesting to retain and protect key people, and make sure visas and work permits continue under the post-deal structure.
07Do IP assignments need to be registered?
Copyright does not require registration, but written assignments are essential. For registered rights such as trademarks and patents, assignments and licences should be recorded with the Ministry of Economy and Tourism so they can be relied on against third parties. Domain names, app store accounts, code repositories and cloud subscriptions also need to be transferred through the relevant providers. Build a completion checklist so nothing is left in a seller's personal name.
Sources and official materials
- Regulation of Competition Legislations – Ministry of Economy and Tourism — Competition decree-law, Cabinet thresholds and 2026 implementing rules
- Regulation of Competition – Ministry of Economy and Tourism — Economic concentration notifications and competition enforcement
- Intellectual Property Legislations – Ministry of Economy and Tourism — Copyright, industrial property and trademark laws
- Data protection laws – UAE Government portal — PDPL and sector data laws
- Federal Tax Authority — Corporate tax, VAT and transfer pricing guidance
- Abu Dhabi Global Market — ADGM companies, data protection and courts
- Dubai International Financial Centre — DIFC companies, data protection and courts
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.
