Author
Sebastian Luermann
Attorney at Law (Germany) I Legal Consultant (UAE) I Senior Associate
June 2026 · Company Formation · Corporate Law
For years, a UAE business that outgrew its original jurisdiction faced a difficult choice: remain in a structure that no longer served its needs, or shut down and re-incorporate elsewhere. Federal Decree-Law No. 20 of 2025, which came into force on 15 October 2025, changes that. For the first time in UAE federal legislation, companies can transfer their registration between mainland authorities, free zones, and financial free zones — retaining their legal identity, corporate history, contracts, and staff — without liquidation.
This guide explains how re-domiciliation works under the new law, what it means in practice for different types of businesses, what the corporate tax and VAT implications are, and how TME Legal can advise on the process.
What Is Re-Domiciliation?
Re-domiciliation is the transfer of a company’s legal registration from one jurisdiction to another, while the company continues to exist as the same legal entity. Under the new framework, this means a company can move:
- From one mainland emirate to another (e.g. Dubai to Abu Dhabi)
- From a free zone to the UAE mainland
- From the UAE mainland to a free zone
- Between free zones, including to and from the ADGM and DIFC financial free zones
The transfer preserves the company’s legal personality, its corporate history, all existing contracts, and all rights and obligations. Counterparties do not need to re-execute agreements. Staff are not required to have their visas cancelled and reissued as a result of the migration.
The Legal Framework: Federal Decree-Law No. 20 of 2025
The re-domiciliation mechanism is introduced through Article 15bis, a new provision inserted into the Commercial Companies Law (Federal Decree-Law No. 32 of 2021) by Federal Decree-Law No. 20 of 2025.
The transfer requires:
- Shareholder approval in accordance with the company’s constitutional documents
- Consent of the relevant licensing authorities in both the origin and destination jurisdictions
- Compliance with the regulatory and licensing requirements of the destination jurisdiction
Cabinet-level implementing regulations govern the procedural details of each transfer category. As of June 2026, regulations have been published for certain transfer types; businesses should confirm the current position for their specific transfer with legal advisers before proceeding.
Important: Article 15bis establishes the legal framework for transfers within the UAE. Full implementing regulations for all inter-free zone transfer categories were not yet published in complete form as of May 2026. The procedure for specific transfers should be confirmed directly with the relevant licensing authorities and legal advisers.
Why Re-Domicile? Strategic Reasons for Transferring
Free Zone to Mainland
The most common driver is access to the UAE onshore market. Free zone companies are restricted in the level of business they can conduct directly with UAE mainland clients. Businesses that have grown beyond their initial export or service model and need unrestricted domestic market access frequently look at moving to the mainland.
Additional reasons include:
- Eligibility for GCC customs and trade treaty benefits, which are available to mainland companies
- Ability to open additional business premises anywhere in the UAE without restrictions
- Access to UAE government contracts and tenders, which often require mainland registration
- Expanded employment quota and Emiratisation framework under MOHRE
Mainland to Free Zone
The principal driver is the tax position. Qualifying Free Zone Persons (QFZPs) that meet the FTA’s criteria pay 0% corporate tax on qualifying income. For businesses with significant qualifying income — technology, consulting, trading with international counterparties — the tax differential can be material.
Other reasons include:
- More flexible office requirements in certain free zones
- Simplified shareholder and ownership structures
- Access to specific free zone ecosystems and networks
Between Free Zones
Businesses may wish to transfer between free zones to access a more appropriate licensing framework, better office infrastructure, a more advantageous fee structure, or a specific free zone ecosystem that better suits their industry.
Corporate Tax Implications of Re-Domiciliation
The corporate tax implications depend heavily on the direction of transfer and the income profile of the business. Key issues include:
Moving to a Free Zone: QFZP Status
A company that transfers to a free zone and wishes to benefit from the 0% qualifying income rate must satisfy the QFZP criteria from the relevant tax period. Simply registering in a free zone is not sufficient. The business must have adequate substance in the free zone, its income must qualify under the approved activities list, and it must comply with the de minimis rule (non-qualifying income must not exceed the lower of 5% of total revenue or AED 5 million).
Moving to the Mainland: Standard Regime
A company that transfers to the mainland will be subject to the standard corporate tax regime: 0% on the first AED 375,000 of taxable income and 9% above that threshold. Loss carryforwards from the previous structure are generally preserved.
Real Estate Held Across Jurisdictions
Where the company holds UAE real estate, the tax treatment of that income is determined by the nature of the property and the structure — not simply by whether the holding entity is in a free zone or on the mainland. As noted in our separate guide on corporate tax and real estate, mainland UAE real estate income is an Excluded Activity for free zone entities regardless of where the holding company is registered.
VAT Implications
VAT registration does not automatically transfer on re-domiciliation. Businesses must assess whether a new VAT registration is required in the destination jurisdiction and confirm the treatment of existing VAT groupings, if any.
For businesses moving between designated zones and the UAE mainland, particular attention is required to the VAT treatment of goods movements. Supplies of goods between designated zones are treated as outside UAE territory (no VAT) where the applicable conditions are met; movement from a designated zone to the mainland is treated as an import and subject to 5% VAT.
The Re-Domiciliation Process: An Overview
- Legal and regulatory assessment. Confirm the transfer path is available and identify the regulatory requirements of both origin and destination authorities.
- Shareholder approval. Pass the requisite resolutions in accordance with the company’s constitutional documents.
- Origin authority approval. File the transfer application with the licensing authority in the current jurisdiction and obtain approval.
- Destination authority registration. Complete the registration process in the destination jurisdiction and obtain the new licence and registration documents.
- Update constitutional documents. Amend the memorandum and articles of association, shareholder register, and other corporate documents as required.
- Tax and regulatory filings. Update FTA records, EmaraTax registration, VAT registration, and any other regulatory filings to reflect the new jurisdiction.
- Bank and third-party notifications. Notify banks, counterparties, and relevant third parties of the change in registration jurisdiction.
Multi-Class Shares: A Related 2025 Reform
Federal Decree-Law No. 20 of 2025 also introduced the ability for mainland LLCs to issue multiple classes of shares — for example, shares with different voting rights or different dividend entitlements — and to accept in-kind capital contributions. Previously, UAE mainland LLCs were limited to a single class of ordinary shares.
This reform is significant for businesses moving to the mainland that require venture capital-compatible capital structures, family businesses implementing governance reforms, and any company where founders need to maintain control while bringing in outside equity.
Frequently Asked Questions
Can a company re-domicile without notifying its existing contractual counterparties?
The company retains its legal identity and the contracts continue to bind. However, clients, suppliers, and financial institutions should be informed of the change in registration jurisdiction, and contracts that specifically reference the company’s current jurisdiction should be reviewed. Banks will typically require updated documentation.
Does re-domiciliation affect existing employee visas?
Re-domiciliation under Article 15bis does not, in itself, require cancellation and reissuance of existing staff visas. However, the visa sponsorship structure is linked to the trade licence. The practical visa implications should be confirmed with immigration advisers as part of the planning process.
Can a DIFC or ADGM company re-domicile to the mainland?
Article 15bis expressly covers transfers to and from the DIFC and ADGM financial free zones. The specific procedural requirements for these transfers are subject to the regulations of the DIFC Authority and the ADGM Registration Authority respectively.
Is re-domiciliation the same as a merger or acquisition?
No. Re-domiciliation is a transfer of the company’s registration jurisdiction while retaining the same legal entity. It is not a merger, amalgamation, or change of ownership. The shareholders, assets, liabilities, contracts, and corporate history remain intact.
How TME Legal Can Assist
TME Legal advises on all aspects of UAE corporate restructuring, including re-domiciliation under Federal Decree-Law No. 20 of 2025. Our work in this area covers:
- Assessment of the available transfer paths and the regulatory requirements of origin and destination jurisdictions
- Corporate law advice on shareholder approvals, constitutional document amendments, and governance matters
- Tax structuring advice on the corporate tax and VAT implications of the proposed transfer
- Guidance on QFZP qualification requirements for businesses moving to a free zone
- Coordination with licensing authorities, the FTA, and other regulatory bodies
- Review and update of contracts, banking documentation, and third-party agreements
If you are considering a change in your company’s jurisdiction, or wish to explore whether re-domiciliation could benefit your business structure, we would be glad to advise.
This article is provided for general information only and does not constitute legal advice. Re-domiciliation procedures are subject to implementing regulations that continue to develop. Requirements differ by jurisdiction pair and by company type. Please contact TME Legal for advice tailored to your individual circumstances.
