Dec 17, 2025
2025: Key Legislative Updates
2025 marked a major update to key areas of legislation in the UAE, from tax and corporate regulation to media and AML requirements. The UAE business environment continues to rapidly adopt international standards of transparency and digitalization.
This review systematizes the key legal updates adopted in 2025 and explains their practical implications for companies, investors, financial and legal professionals.
Taxes
In 2025, the FTA issued a number of guides and clarifications regarding the application of the tax regime in the UAE. The most important are:
Interest Deduction Limitation Rules Corporate Tax Guide | CTGIDL1 explains how interest expense deductions are recognized and limited in the UAE when calculating taxable profits for corporate tax purposes. The guide defines what is considered "interest" for tax purposes, establishes general principles for its deduction, and applies the Specific and General Interest Deduction Limitation Rules, including limits on the amount of net interest expense (e.g., a limit of 30% of adjusted EBITDA or a fixed threshold, which is greater). It also describes exceptions for banks, insurers, and sole proprietors, as well as the specifics of calculating and carrying forward undeducted interest.
Taxation of Family Foundations | Corporate Tax Guide | CTGFF1 explains the tax treatment of family foundations under UAE corporate tax and the conditions for their classification as transparent structures. The document explains the requirements for the establishment and structure of a family foundation, the notification procedure to the FTA, and the tax implications for income, assets, and beneficiaries. Special attention is given to cases of loss of status, interactions with corporate tax, and practical aspects of administration for corporate tax purposes.
VAT Public Clarification No. VATP039 of 2025 (Cryptocurrency Mining) stipulates that cryptocurrency mining for personal purposes is not a taxable supply, therefore VAT is not applicable and input VAT on such transactions is not deductible. However, mining for third parties (for a fee) is recognized as a taxable service with a standard or zero VAT rate applicable if certain conditions are met, as well as the possibility of applying a reverse charge and deducting input VAT.
Corporate Tax Public Clarification No. CTP008 of 2025 (Waiver of Administrative Penalty for Failure to Submit a Corporate Tax Registration Application within a Specified Deadline) introduces a mechanism to waive the AED 10,000 fine for late corporate tax registration, provided that the specified conditions are met. The penalty is waived (and, if paid, refunded through EmaraTax) if the taxpayer or certain categories of exempt individuals file their first tax return or annual statement within seven months of the end of the first tax period (instead of the standard 9 months). This applies only to the first tax period and does not affect the corporate tax payment deadline.
Corporate Tax Public Clarification No. CTP008 of 2025: Corporate Tax Treatment of Family Wealth Management Structures clarifies the corporate tax treatment of family wealth management structures, including Family Foundations, holding companies, SPVs, and Single and Multi-Family Offices. The document confirms the possibility of applying the tax transparency regime subject to the conditions of Article 17 of the Corporate Tax Law, defines in which cases such structures are recognized as independent taxpayers, and clarifies that family offices, as a rule, are subject to corporate tax on a general basis, while the income of family members from personal and investment assets, subject to established criteria, is not subject to corporate tax.
In 2025, the UAE introduced the Domestic Minimum Top-up Tax (DMTT)
The Domestic Minimum Top-up Tax is a domestic minimum tax surcharge for multinational enterprises (MNEs) with an effective tax rate below 15%, in accordance with the international OECD Pillar Two (GloBE Model Rules).
Companies that are part of large multinational enterprises (MNEs) with revenues ≥ €750 million and an effective tax rate of < 15% in the UAE will be required to pay a DMTT surcharge up to 15% on their UAE income.
Other companies (small, local, non-MNEs) do not pay this surcharge.
(Cabinet Decision No. 142 of 2024)
Anti-money laundering (AML/CFT)
In 2025, the UAE adopted new comprehensive AML legislation:
Responsibilities of supervisory authorities and entities were updated, the risk classification was expanded, and requirements for CDD (Customer Due Diligence), SAR (Suspicious Activity Report), and interaction with law enforcement were tightened.
Stricter requirements for certain non-banking entities (Virtual Asset Service Providers, real estate, trust services, etc.) were formalized.
Risk-based approach, risk assessment requirements (including for distribution financing), internal risk management processes, monitoring, and reporting were specified.
Requirements for internal control systems, compliance, and personnel training were clarified across all regulated sectors (banks, VASPs, and DNFBPs).
Mechanisms for interaction with the FIU and law enforcement agencies were outlined, including the provision of necessary data, access to information, monitoring, and data exchange.
(Federal Decree-Law No. 10 of 2025 and Cabinet Decision No. 134 of 2025)
Virtual assets
Control mechanisms for authorised virtual asset activities were updated
In Dubai, the Virtual Assets Regulatory Authority (VARA) published new regulations for virtual assets in 2025. The updated regulations include enhanced oversight mechanisms for the following virtual asset activities:
Advisory services
Brokerage and dealer services
Custody services
Exchange services
Credit and borrowing services
Virtual asset management and investment services
Virtual asset transfer and settlement services
Virtual asset issuance rules.
Key clarifications in the new version of the rules include increased oversight of margin trading and token distribution services, clearer definitions of collateral wallet agreements, and unified requirements across all licensed activities.
(Virtual Asset Issuance Rulebook)
Commercial companies
UAE government significantly amended Commercial Companies Law (Federal Decree-Law No. 32 of 2021)
The corporate governance rules and onshore/free-zone interaction cases were clarified, capital structure flexibility was expanded and a choice of investment instruments was introduced.
The key updates include:
The law's scope was expanded: branches and representative offices of free zone and financial free zone companies are now subject to regulation if they operate in the UAE mainland. This amendment is consistent with recently adopted amendments which allow free zone companies to operate in the mainland with the approval of authorities.
The possibility of establishing non-profit companies was introduced: non-profit companies with profit reinvestment are now permitted; the Cabinet has the right to determine their purposes and forms and exempt them from certain provisions of the law.
The concept of "nationality" was expanded: a company's nationality now also applies to free and financial free zones.
Freedom to regulate corporate arrangements was expanded: LLC and private joint-stock company charters now permit drag-along/tag-along mechanisms and special rules for the circulation of shares of deceased participants.
A procedure for transferring company registration was introduced: registration can be transferred between competent authorities and between mainland and free zones without losing legal personality.
Centralized regulation of the valuation of non-monetary contributions was established: the Ministry of Economy determines standards and requirements for the valuation of property contributions (PJSCs have been excluded).
Company transformation rules were expanded: the transition to a joint-stock company without re-registration and the prior formation of management bodies was simplified.
The amendments also affect the rules governing LLCs, Public Joint-Stock Companies (PJSCs) and private joint-stock companies. Read our Overview for more information.
(Federal Decree-Law No. 20 of 2025)
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Labour law
Obligations of business centers that provide intermediary services for MOHRE were regulated
These regulations establish responsibilities of business centers, including the verification of employees before granting them user rights and storage of client data.
A list of violations for which a business center and its employees may be held liable is established, including fictitious activity or employment, fictitious Emiratisation, abuse of electronic credentials, etc.
Administrative sanctions were introduced. They include suspension of user access rights to MOHRE systems for varying periods from 3 months to 2 years, depending on the severity of the violation. Criminal prosecution is also possible.
(Ministerial Decision No. 702 of 2025)
Suspension periods for employer files in the MOHRE system for domestic workers were established.
An employer's file is subject to suspension in the event of specific violations, the list and suspension periods for which are set forth in the attached table of violations.
The suspension period begins on the date the violation was committed or discovered and cannot be shortened before the expiration of the specified period. The suspension can only be lifted upon payment of all outstanding fines and fees and the resolution of the violation's consequences.
(Ministerial Decision No. 770 of 2025)
Rules for transferring wages through WPS were clarified
The list of companies recognized as repeated violators of the rules for paying wages through the WPS was expanded. In addition to companies against whom complaints of non-payment of wages were referred to court, this list now includes companies against which MoHRE issued orders regarding such complaints, as well as all registered companies with open cases regarding non-payment of wages.
(Ministerial Decision No. 524 of 2025 Amending Certain Provisions of Ministerial Decision No. 598 of 2022 Concerning the Wages Protection System)
In Dubai, a decision was issued to make housing mandatory for certain employees
Companies that employ 50 or more workers whose salaries are AED 2,000 or less are now required to provide housing for these workers.
(Dubai Decision No. 12 of 2025)
Emiratisation
In 2025, the UAE Central Bank was granted the right to impose fines for non-compliance with Emiratisation rules
Fines are set at between AED 20,000 and AED 1 million depending on the type of violation.
Mandatory Emiratisation requirements remain in force:
If a company size is between 20 and 49 employees, it is obliged to follow the Ministerial Decision of MoHRE No. 455 of 2023. That means, if the company's business category falls into one of the economic activities listed in the Resolution, employers are required to increase the number of national employees. To achieve this objective, at least one Emirati must be hired in 2024 and one Emirati in 2025. Otherwise, in 2025 companies will have to pay AED 96,000 if no citizen is hired in 2024; and in 2026, companies will have to pay AED 108,000 if no citizen is hired in 2025. Free zone companies are an exception as no such obligations have been imposed on them.
If a company size is more than 50 employees, then according to Ministerial Decision of MoHRE No. 279 of 2022 employers are required to increase the number of Emirati employees within a company by 1% every 6 months. Otherwise, companies will face a fine of AED 42,000 per unemployed citizen.
(Administrative and Financial Penalties for Emiratization Violations Regulation)
Criminal law
The provisions of the 2021 Criminal Law are clarified
New provisions include:
Criminal risk assessment and post-sentence measures: judges are given the authority to order mandatory medical, psychological and social examinations for individuals convicted of certain serious crimes during the last six months of their sentence.
Suspension of sentences in cases involving state security: the court may suspend the execution of a prison sentence in cases involving state security, subject to the imposition of appropriate conditions. Previously, this option was limited or nonexistent.
Strengthening penalties for sexual crimes involving minors: understanding and recognition of consent are no longer possible if the victim is under 16 years of age. Any sexual activity with a person under 18, even if consent is given, leads to a minimum penalty of 10 years' imprisonment and a fine of at least AED100,000 (for an adult offender).
Increased penalties for incitement to debauchery and prostitution: penalties were tightened for actions related to incitement or involvement in prostitution.
(Federal Decree-Law No. 13 of 2025)
Other legislative updates
Influencers are now required to obtain a permit for advertising on social media
Furthermore, content creators visiting the country are now also required to apply for a permit for visiting advertisers.
The permit will be valid for one year (with the possibility of renewal) for citizens and residents and 3 months (with the possibility of renewal) for visitors. The permit will be issued free of charge for three years (until 2028) to UAE citizens and residents.
Application for an advertiser permit is submitted through the UAE Media Council platform.
For more information, refer to our Marketing and advertising overview.
(UAE Media Council Chairman's Decision No. 3 of 2025 regarding the terms and procedures for authorizing a natural person to submit advertising content on social media № 3 of 2025)
In 2025, a new traffic law came into effect in the UAE
The minimum age for obtaining a driver's license was lowered from 18 to 17.
Rules for the official approval of vehicle modifications (structure, engine, color, etc.) were established.
Crossing roads where the speed limit exceeds 80 km/h (except for pedestrian crossings) is now prohibited (this carries civil/criminal penalties).
The law imposes severe penalties for dangerous violations. Fines range from AED 10,000 to 100,000.
(Federal Decree-Law No. 14 of 2024)
In 2025, mandatory technical regulations for electric vehicle charging devices, their safety and infrastructure were officially introduced at the federal level
Previously there were local regulations but no unified federal technical standard for the entire country.
From May 31, 2025, mandatory certification of charging devices and associated equipment under UAE.S 2698:2024 under the Federal Conformity Assessment Scheme (ECAS) will be in effect.
Standards have been established for:
electrical safety and user protection,
equipment requirements and their connection to the grid,
communication protocols and compatibility,
testing and labeling procedures.
This reduces legal uncertainty for manufacturers/suppliers.
(Cabinet Decision No. 175 of 2025)
In 2025, Abu Dhabi introduced a number of major changes to the main law regulating real estate in the Emirate
New features include:
Protection of off-plan property sales: the law established a new mechanism allowing developers to terminate contracts and remove the buyer's name from documents in the event of a proven violation of the law's provisions.
Escrow accounts: use of escrow account funds to pay for land purchases or brokerage commissions is prohibited.
Service fees and associated penalties: the law introduces a new mechanism providing for the imposition of administrative penalties in the event of non-payment of service fees.
Find out more about the updates in our analysis.