INSITE - UAE- April 2025
- sukhwinder21
- May 26
- 3 min read
UAE INTRODUCES TURNOVER THRESHOLDS FOR MERGER FILINGS
Summary: The United Arab Emirates (UAE) has announced a major development in its competition law framework with the issuance of Ministerial Decree No. 3 of 2025, detailing the turnover thresholds that trigger mandatory merger control filings. This change took effect on March 31, 2025, marking a significant step toward greater regulatory clarity and aligning the UAE with international best practices in merger oversight. Companies planning M&A activity in the UAE should closely assess these new thresholds to ensure compliance.
In Detail: The UAE has taken a significant step in strengthening its merger control framework with the issuance of Ministerial Decree No. 3 of 2025. This decree, which establishes turnover thresholds for "Economic Concentration" transactions, came into force on 31 March 2025.
Under the Federal Decree Law No. 36 of 2023 on Competition, businesses must notify the Ministry of Economy if certain turnover or market share thresholds are met in any merger or acquisition. The turnover threshold requires a filing when the combined annual turnover in the UAE exceeds AED 300 million (approximately USD 81.6 million). Alternatively, the market share threshold applies if the combined market share in the UAE exceeds 40% of total sales in the relevant market.
The definition of the "Relevant Market" includes both the product market (interchangeable products or services) and the geographic market (physical or digital locations where supply and demand meet).
The Decree also specifies that a company is considered to hold a dominant position in the market if it holds more than 40% of the market share, either alone or with other companies.
This change aligns the UAE with international practices, offering businesses clearer guidelines for when to file.
The turnover threshold is likely to increase the number of filings, but it should only apply to transactions with a relevant market presence in the UAE. This should help limit filings for deals with no local impact. However, the exact application of these thresholds remains uncertain, especially as the implementing regulations and additional decrees (e.g., exemptions) are still pending.
Companies considering mergers or acquisitions in the UAE should:
Assess their market presence against the new thresholds
Plan the timing of their merger control filings within the transaction timeline
Seek legal advice to understand the implications of the new rules on their deals
DUBAI EXECUTIVE COUNCIL DECISION 11/2025: NEW FRAMEWORK FOR FREE ZONE COMPANIES OPERATING IN DUBAI
Summary: Dubai has reinforced its focus on improving the business environment with Executive Council Decision No. 11/2025. Issued on March 3, 2025, the new regulation sets clear rules for free zone companies to operate in mainland Dubai.
In Detail: Dubai has introduced a major regulatory update that allows companies based in the Emirate’s free zones to conduct business in mainland Dubai, provided they obtain the necessary licenses or permits from the Dubai Department of Economy and Tourism (DET).
This development marks a significant step under the Dubai Economic Agenda, which aims to double the size of Dubai’s economy by 2033 and position the city among the top three global economic hubs.
Dubai’s free zones have historically attracted international investors through tax benefits, full foreign ownership, and simplified customs. The new resolution removes a long-standing restriction, giving these companies greater freedom to expand their business footprint across the Emirate.
This marks a significant step in enhancing Dubai’s business environment and enabling greater growth opportunities for companies already established in free zones.
Key points:
Free zone companies can now operate in mainland Dubai, expanding their reach and customer base.
Businesses must apply to the DET for a license (valid for one year, renewable) or a permit for specific activities.
The move aims to boost innovation, job creation, and economic growth across Dubai.
Companies must keep separate financial records for their mainland and free zone operations and follow all UAE laws.
DET will release a list of approved business activities within six months.
Existing companies already operating in the mainland must comply within one year, with a possible one-year extension upon DET approval.
This new regulation shows Dubai’s strong commitment to improving its business environment and boosting economic growth. It aims to better connect free zone and mainland businesses, create more jobs, encourage innovation, and support a more diverse and resilient economy.
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