DMCC Companies Remain Outside the UAE Commercial Companies Law — But the New Redomiciliation Rules Change the Conversation
For years, the decision between establishing a company in DMCC or on the UAE mainland was largely permanent.
Once a structure was created, changing jurisdiction typically meant dissolving one company, establishing another, reopening bank accounts, transferring contracts, updating licences, and potentially disrupting operations.
That reality has changed.
The introduction of Federal Decree-Law No. 20 of 2025 has created a new pathway allowing eligible companies to transfer their registration between UAE mainland and free zones without liquidation and re-incorporation.
At the same time, a June 2026 legal clarification confirms an equally important point:
DMCC companies remain governed exclusively by DMCC Companies Regulations and are not subject to the UAE Commercial Companies Law.
For business owners and investors, this combination creates an important strategic question:
If changing jurisdictions is now possible, is your current structure still the right one?
Quick Answer
DMCC companies remain exempt from Federal Decree-Law No. 32 of 2021 (Commercial Companies Law), including amendments introduced by Federal Decree-Law No. 20 of 2025. However, the new legislation introduces a redomiciliation mechanism allowing companies to transfer between UAE mainland and free zones without dissolution, creating new planning opportunities for corporate structuring, governance, banking, and tax optimisation.
Key Takeaways
| Topic | Position |
|---|---|
| Does UAE Commercial Companies Law apply to DMCC? | No |
| Are DMCC companies governed by DMCC Regulations? | Yes |
| Can companies now transfer between mainland and free zones? | Yes |
| Is dissolution required? | No |
| Does redomiciliation affect corporate tax planning? | Potentially |
| Should existing structures be reviewed? | Absolutely |
Understanding What Actually Changed
Many headlines discussing the 2025 amendments focus on shareholder rights, governance reforms, and capital restructuring rules.
However, the most significant practical change for many businesses may be the introduction of a formal redomiciliation framework.
Historically:
Previous Position
DMCC Company
↓
Dissolution
↓
New Mainland Company
↓
New Banking Relationships
↓
New Licences
↓
New Contracts
New Position
DMCC Company
↓
Redomiciliation Process
↓
Mainland Company
No liquidation.
No re-incorporation.
Significantly reduced disruption.
That distinction is important.
What the UAE Commercial Companies Law Does Not Change for DMCC Companies
A common misunderstanding is that the 2025 amendments somehow brought DMCC entities under the UAE Commercial Companies Law.
They did not.
DMCC companies continue to operate under:
- DMCC Companies Regulations
- DMCC licensing framework
- DMCC governance requirements
- DMCC compliance procedures
The following CCL reforms do not automatically apply:
| CCL Reform | Applies to DMCC? |
| Shareholder Rights Changes | No |
| Capital Restructuring Reforms | No |
| Corporate Governance Updates | No |
| Board Procedure Changes | No |
| Mainland Company Requirements | No |
For most businesses, this continuity provides certainty.
The governance framework that existed before January 2026 largely remains unchanged.
Why Redomiciliation Matters More Than It Appears
The significance of the new rules is not that companies must move.
The significance is that they can.
This changes the strategic conversation.
Previously:
"Choose carefully because changing later will be expensive."
Today:
"Review your structure regularly because changing later is possible."
That is a very different mindset.
Corporate Tax Has Changed the Analysis
Before June 2023, many structures were established primarily around:
- Ownership
- Banking
- Licensing
- International reputation
Today, Corporate Tax has become a central consideration.
Free Zone Position
Qualifying Free Zone Persons (QFZPs) may benefit from:
- 0% Corporate Tax on qualifying income
- 9% Corporate Tax on non-qualifying income
Mainland Position
Mainland companies generally face:
- 0% on taxable income up to AED 375,000
- 9% on taxable profits above AED 375,000
Neither structure is automatically better.
Everything depends on:
- Business activities
- Income composition
- Substance requirements
- Long-term commercial objectives
DMCC vs Mainland UAE: Comparison Table
| Factor | DMCC | Mainland UAE |
| Governance Framework | DMCC Regulations | Commercial Companies Law |
| Free Zone Tax Benefits | Potentially Available | Not Available |
| Local Market Access | Limited in some cases | Direct |
| Banking Perception | Strong | Strong |
| International Recognition | Excellent | Excellent |
| Redomiciliation Option | Available | Available |
| Corporate Tax Planning | Activity Dependent | Standard Regime |
Banking and Commercial Relationships
Many structuring decisions are not driven by tax.
They are driven by business realities.
Over recent years, banks have increased compliance requirements significantly.
In practice:
- Certain counterparties prefer mainland entities.
- Some regulated sectors favour mainland registration.
- Certain institutional clients are more familiar with mainland governance.
This does not mean mainland is superior.
It means that jurisdiction choice can affect commercial outcomes.
Governance Complexity in Mixed Structures
A common structure today looks like:
DMCC Holding Company
↓
Mainland Operating Subsidiary
↓
Regional Activities
Under this model:
The DMCC parent operates under DMCC Regulations.
The mainland subsidiary operates under the Commercial Companies Law.
The result is two governance systems inside one corporate group.
Potential areas affected include:
- Dividend distributions
- Shareholder agreements
- Board approvals
- Capital contributions
- Related-party transactions
For growing groups, reviewing whether this structure remains optimal has become increasingly important.
Practical Example
Scenario
A family office established a DMCC holding company in 2018.
At the time:
- No Corporate Tax existed.
- Banking requirements were different.
- Redomiciliation was unavailable.
In 2026:
- Corporate Tax exists.
- Banking expectations have evolved.
- Redomiciliation is available.
The structure itself may still be correct.
But the assumptions underlying the original decision may no longer be.
This is precisely why periodic structure reviews have become essential.
Common Mistakes Businesses Make
Mistake #1
Assuming DMCC and mainland companies are governed by identical rules.
Mistake #2
Focusing only on Corporate Tax.
Mistake #3
Ignoring banking implications.
Mistake #4
Failing to review structures established before 2023.
Mistake #5
Assuming redomiciliation is automatically beneficial.
Expert Commentary
The introduction of redomiciliation should not be viewed as an invitation to relocate.
Instead, it should be viewed as an invitation to reassess.
Many DMCC structures remain highly effective.
Many mainland structures remain highly effective.
The key difference today is that the decision is no longer irreversible.
That flexibility itself has value.
Redomiciliation Review Checklist
Before considering migration, ask:
✓ Is the current structure still aligned with business activities?
✓ Has Corporate Tax changed the economic outcome?
✓ Are banking relationships operating smoothly?
✓ Are counterparties comfortable with the current jurisdiction?
✓ Does the governance framework still fit the group's needs?
✓ Have future expansion plans been considered?
If the answer to any of these questions is uncertain, a professional review may be worthwhile.
How Affinitas Can Help
Affinitas has been advising businesses on UAE structuring, DMCC entities, Special Purpose Vehicles, international expansion, tax planning, and corporate governance for more than a decade.
As the first firm authorised by DMCC to establish SPVs for clients, our team has extensive experience navigating the interaction between:
- DMCC Regulations
- UAE Commercial Companies Law
- Corporate Tax
- Holding structures
- Cross-border ownership arrangements
- Family office planning
Whether your company remains in DMCC or considers a mainland migration, the objective should always be the same:
Creating a structure that remains effective not only today, but five years from now.
Frequently Asked Questions
Does the UAE Commercial Companies Law apply to DMCC companies?
No. DMCC companies remain governed by DMCC Companies Regulations and are not subject to the Commercial Companies Law.
Can a DMCC company move to mainland UAE?
Yes. Following the introduction of the redomiciliation framework under Federal Decree-Law No. 20 of 2025, eligible companies may transfer registration without dissolution.
Does redomiciliation automatically improve tax efficiency?
Not necessarily. The outcome depends on the company's activities, income profile, and long-term objectives.
Can mainland companies move to a free zone?
The new framework allows transfers in both directions, subject to applicable requirements.
Should older DMCC structures be reviewed?
Yes. Structures established before Corporate Tax and before the 2025 amendments should be reassessed to ensure they remain appropriate.
External Sources
UAE Ministry of Finance
https://mof.gov.ae/
Federal Tax Authority
https://tax.gov.ae/
Dubai Chambers
https://www.dubaichambers.com/
Contact Affinitas
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