Starting another company is one way to grow in the UAE. Buying or combining with an existing business can sometimes get you there faster.
An acquisition can give your company an established customer base, trained employees, licences, supplier relationships, technology or access to a new emirate. A merger can combine two businesses where operating as one company makes commercial sense.
The process still needs careful planning. A UAE merger and acquisition company transaction can involve company law, competition clearance, licensing authorities, tax rules, banks and sector regulators. The bigger the deal, the more important it becomes to check these requirements before signing a binding agreement.
This guide explains how mergers and acquisitions work in the UAE in 2026 and how you can use them to expand an existing business.
What Are Mergers and Acquisitions in the UAE?
A merger combines two or more companies into one business structure. An acquisition happens when one company purchases control of another business, normally by buying its shares or assets.
The UAE's Commercial Companies Law contains specific provisions governing company mergers, including merger agreements, shareholder approval and creditor rights.
You will usually come across three practical deal structures:
Structure | What happens | Often suitable when |
Share acquisition | You buy shares in the existing company | You want the business, licences, contracts and operations to continue |
Asset acquisition | You buy selected assets or parts of the business | You only want certain equipment, IP, contracts or business divisions |
Merger | Companies combine into one surviving or newly formed company | Two businesses want to operate under one structure |
A share purchase can be simpler operationally because the legal entity continues to exist. Its licences and contracts usually remain in the company's name, although change-of-control clauses and regulator approvals still need checking.
An asset acquisition gives you more choice over what you purchase. The trade-off is that contracts, permits, employees and assets may each need separate transfer procedures.
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Why UAE Companies Use M&A to Expand
Buying an existing company can solve several growth problems at once.
You may acquire a distributor rather than building a distribution network yourself. A Dubai company might acquire an Abu Dhabi operator to enter that market with existing staff and customers. A logistics company could acquire a warehouse operator. A software business may buy another company primarily for its technology, contracts or development team.
Common expansion objectives include:
Entering another emirate or business sector
Acquiring licences or operating capacity
Increasing market share
Adding customers or distribution channels
Securing intellectual property or technology
Expanding manufacturing or logistics capacity
Buying a competitor
Adding an established management team
Before pursuing an acquisition, compare it with organic expansion. In some cases, opening a branch or forming another entity is cheaper and carries fewer historic liabilities.
Share Purchase or Asset Purchase: Which Structure Works Better?
Share purchase
When you buy shares, you acquire ownership of the company itself. That means the company keeps its existing assets and liabilities. It may also retain its employees, contracts, leases, licences and banking relationships, subject to their individual terms.
This continuity is useful, but it creates risk. Previous VAT problems, unpaid liabilities, disputes or contractual obligations remain inside the company after ownership changes.
Asset purchase
An asset deal lets you specify what you are purchasing.
For example, you might acquire:
Machinery
Inventory
Intellectual property
Customer contracts
Vehicles
Property
Business equipment
A particular operating division
The buyer can often avoid taking on many historic corporate liabilities. However, assets and agreements may need individual transfers or third-party consent. Employees may also require new employment and permit arrangements rather than moving automatically with the business.
Your final choice should depend on liability exposure, licensing requirements, tax treatment and how difficult the business would be to transfer asset by asset.
Check UAE Merger Control Rules Early
Competition clearance has become a much more important part of larger UAE transactions.
Federal Decree-Law No. 36 of 2023 regulates competition and economic concentration. The UAE also introduced new implementing regulations under Cabinet Resolution No. 59 of 2026, effective from 30 July 2026.
A merger or acquisition may require an economic concentration application where either of the current thresholds is met:
Combined annual sales of the concerned businesses in the relevant UAE market exceed AED 300 million during the previous fiscal year, or
Their combined share exceeds 40% of transactions in the relevant UAE market during the previous fiscal year.
These thresholds are set by Cabinet Decision No. 3 of 2025. View the UAE economic concentration thresholds
Where notification is required, the transaction cannot simply close while approval is pending. The Competition Law provides for a review period of up to 90 days after receipt of a complete application, with a possible extension of another 45 days.
Sector Approval Can Be Required Too
Competition clearance is only one regulatory layer. Certain activities require approval from their own regulator when ownership or control changes.
Banks and other licensed financial institutions, for example, can face Central Bank approval requirements for controlling interests or major acquisitions.
The UAE also treats activities such as banking, insurance, telecommunications, defence-related businesses and certain other sectors as activities with strategic impact. Ownership conditions can depend on the relevant regulator.
Step-by-Step UAE M&A Process
- Set the expansion objective
Start with a commercial question. What do you actually need?
If you need customers, buying a company with strong revenue but poor equipment may still make sense. If you need manufacturing capacity, customer numbers alone should not drive the valuation. Write down the assets, market position or capabilities the acquisition must provide.
- Identify and screen potential targets
Review the target's:
Licence and approved activities
Ownership structure
Revenue and profitability
Customer concentration
Debt
Key contracts
Employees
Litigation
Regulatory history
Tax status
Do an initial screen before spending heavily on full due diligence.
- Sign confidentiality documents and agree headline terms
The parties commonly sign an NDA before exchanging sensitive information. A letter of intent or term sheet can then record the proposed price, transaction structure, exclusivity period, timetable and major conditions.
Avoid treating the headline purchase price as the final number before completing due diligence.
- Conduct due diligence
This is where you verify what you are buying. Financial due diligence should examine revenue quality, margins, receivables, debt, cash flow, inventory and unusual shareholder transactions.
Legal due diligence should cover licences, corporate records, contracts, litigation, property, IP and regulatory approvals. Tax checks should include Corporate Tax, VAT and outstanding filings or assessments. Employee salaries, benefits and end-of-service obligations also need to be quantified.
- Value the business and negotiate the deal
The valuation may use EBITDA multiples, discounted cash flow, asset values or sector-specific metrics.
Suppose the seller values a company at AED 12 million. Due diligence then finds AED 1 million of unpaid liabilities and AED 600,000 of doubtful receivables. Those findings should affect the price or the transaction terms.
The parties might use price adjustments, retention amounts, escrow arrangements or specific indemnities rather than accepting the original valuation unchanged.
- Prepare the transaction documents
For a share acquisition, the main agreement is usually a Share Purchase Agreement.
It commonly covers:
Shares being transferred
Purchase price
Payment terms
Conditions before completion
Seller warranties
Indemnities
Restrictive covenants
Completion procedure
Dispute provisions
Changes to an LLC's ownership can also require amendments to its constitutional documents. Nexture's guide to the UAE Memorandum of Association explains how ownership and management provisions appear in the MOA.
- Obtain approvals and complete the transfer
Depending on the company, completion may require approval or filings with the relevant economic department, free-zone authority, competition authority or sector regulator.
For statutory mergers, the Commercial Companies Law also provides protections for shareholders and creditors. Creditors must be notified after approval of the merger and can raise objections within the prescribed period.
- Update ownership, banking and compliance records
The work does not end when the sale agreement is signed. UAE entities must keep beneficial ownership information updated. Changes covered by the beneficial-owner rules generally need to be reported to the registrar within 15 days.
Your bank may also perform fresh KYC checks after a significant ownership change because financial institutions must maintain up-to-date customer and beneficial-owner information.
Nexture's UAE business bank account requirements guide explains the documents banks commonly review.
Corporate Tax When Buying or Merging a UAE Company
Tax needs to be reviewed before deciding the transaction structure.
The UAE Corporate Tax system provides relief for certain qualifying reorganisations. Business Restructuring Relief can apply to eligible transfers or mergers involving a business or independent part of a business where the statutory conditions are satisfied.
Qualifying intra-group transfers may also receive tax-neutral treatment in certain circumstances.
Another issue is accumulated tax losses. The FTA states that losses can generally continue without restriction where at least 50% ownership remains with the same owners. After a greater ownership change, continued use may depend on there being no major change in the nature or conduct of the business.
Never assume an acquisition is automatically tax neutral. Review the specific structure before completion.
We’ll model the requirements and send back a single-page breakdown within 24 hours.
Common Mistakes When Acquiring a UAE Company
The most expensive mistakes usually happen before closing.
Watch for these problems:
Buying shares without checking historic tax liabilities
Assuming every licence remains valid after a change of control
Ignoring shareholder pre-emption rights
Failing to review customer change-of-control clauses
Paying based on headline revenue rather than verified earnings
Forgetting employee gratuity and benefit liabilities
Completing a reportable transaction without competition clearance
Failing to update UBO and bank records
Starting integration before key regulatory approvals are received
Using M&A to Expand Your UAE Business
Mergers and acquisitions can help an existing company expand without building every part of the business again. You can acquire customers, staff, technology, facilities or market access through a single transaction. The advantage depends on what you buy and what liabilities come with it.
Before pursuing a UAE merger and acquisition transaction, decide whether shares, assets or a statutory merger fit your objective. Then review the target properly, check competition thresholds and sector approvals, model the tax impact and build regulatory conditions into the deal timetable.
Frequently Asked Questions
Can a UAE company acquire another UAE company?
Yes. A UAE company can acquire another business through a share purchase, asset purchase or other permitted structure. The required approvals depend on the target's legal form, jurisdiction, business activity and size of the transaction.
Does every UAE acquisition need Competition Ministry approval?
No. Merger-control notification is generally relevant where the transaction constitutes an economic concentration and meets the applicable threshold. The current thresholds include more than AED 300 million in combined annual sales in the relevant UAE market or more than 40% of transactions in that relevant market.
Is buying an existing company better than starting a new company?
It depends on what you need. Buying can give you customers, employees, contracts and operating history immediately. Starting a new company gives you a clean entity without the target's historic liabilities. Compare the total acquisition cost and risks with the cost and time of organic expansion.
What should I check before acquiring a UAE company?
Review its financial statements, tax records, debts, contracts, employees, trade licence, regulatory approvals, litigation, beneficial owners, bank facilities, leases and intellectual property. For a share acquisition, pay particular attention to liabilities that remain inside the target after completion.
Can a merger or acquisition receive UAE Corporate Tax relief?
Certain qualifying restructurings and intra-group transfers can receive relief under the UAE Corporate Tax regime. The conditions are specific, so the transaction should be reviewed against the FTA rules before signing.
