UAE Civil Transactions Framework Amendments
Overview
The UAE has introduced a new Federal DecreeLaw amending the long-standing Civil Transactions Law originally enacted under Federal Law No. 5 of 1985. The amendments refine the civil law framework, responding to the
expansion of specialist legislation and the increasing sophistication of commercial and private transactions in the UAE. The reform aims to streamline civil law provisions, reduce overlap with sector-specific laws and provide clearer guidance on issues that have traditionally created uncertainty before the courts.
One of the most significant changes is at the precontractual stage. The law now includes an express obligation on negotiating parties to disclose essential information necessary for informed and conscious consent. This is a shift away from a formal understanding of an agreement and reinforces the principle that contractual autonomy must be grounded in transparency and good faith from the beginning. The law also recognises the concept of framework agreements. These are intended to govern ongoing or repeat transactions by setting out core terms in advance, leaving operational details to be agreed at a later date. This change supports efficiency, reduces renegotiation risk and offers a stable contractual foundation for long-term commercial relationships. The reforms further modernise the rules governing sale agreements. More precise guidance is now provided for transactions based on samples or models, reducing uncertainty in assessing conformity and contractual compliance
The amendments bring meaningful clarification to support judicial interpretation. In the absence of an explicit or implicit legislative rule, courts are able to draw upon the principles of Islamic Sharia
and select the approach that most appropriately delivers justice and aligns with public interest, having regard to the facts of the case. Judges are afforded discretion and are not bound to adhere to any single school of jurisprudence or doctrinal framework. Contracts granting usufructuary construction rights must now be registered with the competent authority, failing which they will be rendered void. The law clarifies the obligations attached to these rights and expressly allows the parties to determine their duration contractually, providing greater certainty for developers and
investors. The revised law also addresses the treatment of property owned by foreign individuals who die without legal heirs. In such cases, financial assets situated within the UAE are to be converted into a charitable endowment and administered under the supervision of the competent authority. The amendments also establish a more structured regime for assignments, including the transfer of rights, while strengthening the legal safeguards attached to possession. The law now provides for preventive remedies, enabling parties to approach the courts to halt unlawful interference.
Rules on legal capacity have also been modernised. The age of majority has been aligned with international standards by shifting from 21 Hijri years to 18 Gregorian years. Minors may now seek judicial authorisation to manage their assets from the age of 15 Gregorian years, subject to court approval. In the sphere of civil liability, courts are now permitted to award additional damages alongside blood money or assessed compensation where death or injury results in material or moral harm that is not fully compensated by blood money alone. This enables a more holistic and equitable approach to compensation in appropriate cases. Finally, the Civil Transactions Law has undergone notable revisions in its corporate framework. The amendments draw a clearer distinction between civil and commercial companies, allow for the establishment of singleperson entities and set out more detailed rules governing partner withdrawal, business continuity and liquidation procedures. In addition, distinct regulatory frameworks have been introduced for non-profit and professional companies, aligning the law with the increasingly diverse forms of corporate activity in the UAE.
UAE Introduces New Central Bank Law
The UAE issued Federal Decree-Law No. 6 of 2025 (“CB Law 2025”) on the 8th of September 2025. Affected entities are granted a 1 year transition period until the 16th of September 2026 to achieve compliance. The UAE Central Bank (CBUAE) has the discretion to extend this period if required. CB Law 2025 replaces the previous Federal Decree-Law No. 14 of 2018 Concerning the Central Bank and the Regulation of Financial Institutions and Activities and Federal Decree-Law No. 48 of 2023 Regulating Insurance Activities, creating a single, unified framework for banks, insurers, payment providers and technology enablers. The CB Law 2025 consolidates banking, insurance and payment services under one legislative umbrella, harmonising prudential, governance and consumer protection standards across the financial sector. Firms operating across multiple financial verticals now have clearer and consistent rules.
The law expands the CBUAE’s oversight to include:
- Open Finance Services: Regulation now covers open finance services.
- Virtual Asset Payment Services: Payment services using virtual assets are licensable under the law.
- Technology and Infrastructure Providers: Platforms, applications or protocols enabling financial services now fall under licensing and supervision, even if they do not interact directly with clients.
