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Mergers & Acquisitions (M&A) law governs the consolidation of companies, assets or their management and operations through various types of financial transactions in Dubai. The Commercial Companies Law (Federal Law No. 2 of 2015) is the most prominent law regulating M&A activities in the UAE. The law provides the necessary framework for mergers, acquisitions legislation and procedures for public and private companies. Furthermore, the UAE Securities and Commodities Authority (SCA) administers public M&A transactions.
People often require legal help to navigate M&A transactions due to their complex nature. Legal counsel is typically required to understand and comply with the local, federal laws, regulations, understand cross-border legal implications, handle due diligence, document review and drafting, structuring of the transaction and negotiate the terms of the deal. Specialized M&A lawyers often have experience with contractual law, tax law, antitrust, securities laws and intellectual property rights, which are all areas that may be implicated in an M&A transaction.
The UAE Commercial Companies Law contains specific rules for each type of company formation, including Limited Liability Companies (LLCs), Public Joint Stock Companies (PJSCs), and Private Joint Stock Companies (PrJSCs). This law, alongside resolutions from the Securities and Commodities Authority (SCA), is the primary legal reference for the registration and completion of M&A transactions. Specific regulations pertain to foreign ownership, with special Free Zones allowing 100% foreign ownership, in contrast to most other areas of Dubai where local partners must hold at least 51% of share capital in mainland companies.
Normally, foreign investors can own up to 49% of a company in the mainland of Dubai, with UAE nationals holding at least 51%. However, several Free Zones and sectors identified in the "Positive List" allow 100% foreign ownership.
Yes, public and private company M&As are governed by different regulations. The process for public companies is highly regulated by the SCA and requires further adherence to rules regarding mandatory takeovers, disclosures and squeeze-outs.
The SCA oversees M&A transactions involving public companies. They work to protect investors and ensure that all parties comply with the necessary regulations related to disclosures and conduct during the transaction.
Due diligence is an investigation or audit of a prospective business or investment prior to entering into an agreement or a transaction with the party. It involves reviewing the financial, legal and operational aspects of the company being purchased.
In most parts of Dubai, a local partner is needed who holds at least 51% of the company's share capital. However, certain Free Zones and sectors identified in the "Positive List" allow 100% foreign ownership.
The Dubai Department of Economic Development (DED), The UAE Ministry of Economy, The Securities and Commodities Authority (SCA), and various Free Zone authorities could be valuable resources for someone seeking legal advice related to M&A in Dubai.They can provide necessary guidelines, clarifications and critical updates on M&A regulations.
If you require legal assistance, it is recommended to engage with a legal expert or law firm specialized in M&A law in Dubai. These professionals can help navigate through the complex legal process, keeping up with due diligence requirements, contract reviews, and negotiations, while ensuring that you comply with all necessary laws and regulations. They may also ensure a smooth and legally secure M&A transaction.
