Businesses in the UAE operate in a fast-moving legal environment. Changes in contract law, financial compliance, tax administration and employment rules can directly affect daily operations, internal policies and commercial risk.

For business owners and compliance teams, the key issue is not simply knowing that a new law exists. It is understanding whether the company’s contracts, records, procedures and decision-making processes need to change.

A New Civil Transactions Law Has Changed the Contract Landscape

Federal Decree-Law No. 25 of 2025, promulgating the Civil Transactions Law, came into force on 1 June 2026. It replaces the previous Civil Transactions Law and affects a broad range of commercial dealings, including supply agreements, service contracts, construction arrangements, leases, guarantees and settlement agreements.

The new law continues to recognise key principles such as good faith, contractual freedom and the binding nature of valid agreements. However, companies should not assume that older template agreements will automatically remain suitable.

Businesses should review important clauses dealing with:

governing law and dispute resolution;
payment obligations and late payment;
force majeure and hardship;
limitation of liability;
termination rights;
liquidated damages;
notices and electronic communications; and
confidentiality and use of business information.

For example, a force majeure clause should not simply state that performance is excused whenever a business faces difficulty. The clause should clearly identify the events covered, the notice process, the effect on performance and whether either party may terminate after a prolonged disruption.

Mrs. Awatif Al Khouri’s work in commercial matters reflects why companies should review contracts before disputes arise. A carefully drafted agreement can reduce uncertainty when payment delays, supply interruptions or disagreements between business partners occur.

AML Compliance Is No Longer Limited to Banks

The UAE’s anti-money laundering framework was strengthened under Federal Decree-Law No. 10 of 2025 and its Executive Regulations under Cabinet Resolution No. 134 of 2025.

The framework affects financial institutions, designated non-financial businesses and professions, virtual asset service providers and other regulated businesses. Depending on the activity, this can include real estate businesses, dealers in precious metals and stones, accounting and audit firms, trust and company service providers, and certain legal or corporate service providers.

For affected businesses, compliance should include more than collecting a passport copy from a client. Companies should have procedures to:

identify and verify customers and beneficial owners;
understand the source and purpose of a business relationship where required;
assess and document risks;
conduct ongoing monitoring;
keep transaction and due diligence records;
screen against relevant sanctions and targeted financial sanctions lists; and
report suspicious activity through the applicable channels without alerting the customer.

Beneficial ownership information is particularly important. A company should be able to identify the natural person who ultimately owns or controls a client, supplier, shareholder or business vehicle where the law requires this information.

A weak compliance file can create serious risk, especially where a business deals with high-value transactions, cross-border payments, cash-intensive activities or complex ownership structures.

Corporate Tax and Tax Penalties Need Continued Attention

Corporate tax compliance remains a major concern for UAE businesses. Registration, tax return filing, accounting records, related-party dealings and transfer pricing should be monitored throughout the year, not only when a return is due.

Companies should also be aware that Cabinet Decision No. 129 of 2025 amended certain administrative penalties for tax violations, with the changes taking effect on 14 April 2026.

This does not mean businesses should treat compliance lightly. It means businesses should review whether prior registration issues, filing gaps, VAT errors or corporate tax concerns can be corrected through the appropriate process before they become larger disputes.

Compliance teams should maintain a clear tax calendar covering registration, filing, payment, record retention and internal review deadlines.

Payroll and Employment Compliance Remain a Board-Level Issue

Employment compliance is not only an HR responsibility. Delayed salaries, inaccurate employment records, improper termination processes and weak payroll controls can expose a company to complaints, operational restrictions and reputational damage.

The Ministry of Human Resources and Emiratisation has issued amendments to the Wage Protection System framework under Ministerial Resolution No. 340/2026. Private employers must pay salaries properly, in an agreed amount and at the time specified in the employment contract.

Businesses should also review:

Employment contracts and job titles.
Salary structures and allowances.
Leave and end-of-service computations;
Overtime records, if relevant;
Work Permit and Visa Records;
disciplinary procedures;
employee handbooks; and
payroll approval controls.

Companies with 50 or more employees should also monitor Emiratisation obligations and relevant periodic targets. Missing a deadline can create financial and operational consequences that may have been avoided through earlier workforce planning.

Corporate Governance Must Match the Actual Business Structure

Many businesses grow quickly but retain informal decision-making processes. This becomes risky when shareholders disagree, directors change, investors enter the company or a major transaction is proposed.

The UAE Commercial Companies Law remains central to issues such as director duties, conflicts of interest, shareholder rights, board approvals and company records.

Companies should ensure that their corporate documents reflect reality. This includes maintaining updated registers, shareholder resolutions, board minutes, powers of attorney, authorised signatory lists and beneficial ownership records.

A company should also have clear internal approval rules. For example, who may sign contracts? Who may approve payments? When is board approval required? Which transactions need shareholder consent?

These questions should be answered before a dispute arises, not after a director or employee has already entered into a disputed transaction.

Conclusion

UAE business law updates should be viewed as an opportunity to strengthen internal systems, not merely as an additional compliance burden. Companies that keep their contracts, records and policies current are generally better placed to prevent disputes, respond to regulatory requests and protect commercial relationships.

Mrs Awatif Al Khouri’s approach in commercial and corporate matters highlights the value of acting early. A timely review of contracts, compliance procedures and governance records can help a business avoid disputes and operate with greater confidence in a changing regulatory environment.