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Many business owners take comfort in a simple assumption: if their name is not listed as a director, they cannot be held responsible for a company’s decisions.

That assumption has led to significant legal problems for founders, investors, family members and beneficial owners across multiple jurisdictions.

In modern corporate disputes, courts and regulators are increasingly willing to look beyond formal titles and corporate records to identify who was actually directing a company’s affairs. The question is no longer confined to who signed the paperwork. The real issue is who exercised influence, controlled decisions and shaped the company’s conduct.

For many businesses, the answer may not be the individual whose name appears on the licence.

The Growing Risk of Hidden Control

Corporate structures are often designed to separate ownership from management, and there are entirely legitimate reasons for doing so. Investors may choose not to participate in day-to-day operations. Family businesses may appoint the next generation as directors. Corporate groups may establish subsidiaries with independent boards. Problems arise, however, when the formal structure no longer reflects reality.

A beneficial owner who approves major contracts, an investor who routinely dictates strategy, or a parent company that controls significant operational decisions may find that legal responsibility follows their conduct rather than their title.

Courts have repeatedly demonstrated a willingness to examine substance over form. Where decision-making authority exists in practice, liability may follow.

The Dangerous Myth of the Nominee Director

One of the most common misconceptions in corporate governance is that appointing a nominee director creates a layer of protection between the business and the individual exercising control. In reality, nominee arrangements often attract greater scrutiny rather than less.

When disputes arise, investigators rarely stop at the corporate registry. They examine emails, board minutes, financial approvals, messaging platforms, internal communications and witness testimony. Their objective is straightforward: to determine who was actually making the decisions.

If the evidence shows that directors merely implemented instructions from another individual, the existence of a nominee structure may offer little protection.

The law is concerned with authority, not appearances.

When Oversight Becomes Control

Not every influential stakeholder becomes a shadow director.

Investors are entitled to monitor performance. Shareholders may express opinions. Parent companies may establish strategic objectives. Family members may provide guidance. The legal risk arises when influence evolves into control.

Questions regulators frequently ask include:

• Were directors exercising independent judgement?
• Were important decisions effectively pre-approved by someone else?
• Did management routinely seek permission from an unofficial decision-maker?
• Were board meetings genuine decision-making forums or merely formalities?
• Could the company act without the approval of the individual exercising influence?
  
  

The more frequently the answer points to hidden authority, the greater the potential exposure.

Why Regulators Care

This issue extends beyond technical governance requirements.

Corporate law is founded on accountability. Directors are expected to exercise care, manage conflicts, oversee risk and act in the best interests of the company.

Allowing individuals to exercise director-level authority without assuming director-level responsibility would undermine that framework.

As a result, courts frequently focus on the reality of corporate control rather than the labels attached to individuals.

This approach protects creditors, minority shareholders, employees, regulators and other stakeholders who rely on transparent governance structures.

Situations That Create the Greatest Exposure

While every case depends on its facts, several recurring scenarios frequently arise in governance disputes.

Family businesses often face challenges when senior family members continue making decisions after formally stepping away from management.

Founder-led businesses may encounter similar issues when founders resign from official positions but continue directing operations behind the scenes.

Investment structures can create risk when investors move beyond oversight and become active decision-makers.

Corporate groups face similar concerns when subsidiary boards simply implement instructions from a parent company without meaningful review or independent challenge. In every case, the issue is not ownership. It is control.

Governance Failures Often Begin Quietly

Most shadow director issues do not begin with deliberate attempts to evade liability. They develop gradually.

A founder remains involved because of experience. An investor intervenes to protect value. A parent company centralises decision-making for efficiency. A family member provides guidance during a transition period.

Over time, however, informal influence can become embedded within the organisation. When this happens, corporate records may tell one story while operational reality tells another. It is this gap that creates legal vulnerability.

How Businesses Can Protect Themselves

The strongest protection is not complexity. It is clarity. Businesses should clearly define levels of authority, document governance structures, maintain meaningful board processes and ensure directors genuinely exercise independent judgement.

Investors should understand the distinction between oversight and management. Beneficial owners should avoid performing executive functions unless formally authorised.

Parent companies should allow subsidiary boards sufficient autonomy to discharge their responsibilities properly.

Most importantly, businesses should periodically assess whether their documented governance arrangements accurately reflect actual practice. A governance structure is effective only if it reflects how decisions are genuinely made.

The Question That Matters Most

Whenever a regulator, court, insolvency practitioner or opposing lawyer investigates corporate responsibility, one question inevitably arises:

Who was really in control?

The answer may not be found in the licence, the corporate registry or the organisational chart. Instead, it may be found in meeting records, financial approvals, communications and patterns of behaviour accumulated over time.

That reality explains why shadow directors and de facto control remain among the most significant—and most misunderstood—risks in modern corporate governance.

For businesses seeking to reduce exposure, the lesson is clear: ensure that authority, responsibility and accountability are fully aligned. When formal structures accurately reflect operational reality, the risk of hidden liability is significantly reduced.

Dubai's property market continues to attract both long-term residents and overseas investors, with home ownership becoming an increasingly popular alternative to renting. Government initiatives aimed at encouraging first-time buyers, combined with competitive mortgage products offered by banks, have made purchasing a home more accessible than ever.

However, securing a mortgage involves much more than simply meeting a salary requirement. Lenders assess several financial and employment factors before approving a home loan. Understanding these requirements can help buyers avoid delays, reduce costs and improve their chances of approval.

Is Now a Good Time to Get a Mortgage?

There is no universally perfect time to take out a mortgage, but market conditions can influence purchasing decisions. As the UAE property market moves towards more moderate and sustainable growth following several years of strong price increases, buyers may find themselves with greater flexibility to compare properties and negotiate better deals.

For residents planning to remain in the UAE for the long term, buying a property can provide financial stability, allow them to build equity and reduce long-term housing costs compared with renting.

How Much Deposit is Required?

The minimum down payment is regulated by the Central Bank of the UAE and depends on the property's value and whether it is ready for occupation or still under construction.

For ready properties:

• Properties valued below Dh5 million generally require a minimum deposit of 20 per cent.
• Properties worth more than Dh5 million typically require a 30 per cent deposit.
  
  

For off-plan properties, buyers usually follow the developer's payment schedule during construction. A mortgage is generally arranged only once the property is completed and handed over.

What Salary Do You Need to Qualify?

Minimum salary requirements vary between lenders. Many banks typically require a monthly income of around Dh15,000, although some lenders may offer mortgages to applicants earning from Dh10,000 per month.

Salary alone does not determine borrowing capacity. Banks also assess:

• Employment status
• Length of employment
• Credit history
• Existing loans and financial commitments
• Age
• Available deposit
• Overall ability to meet monthly repayments
  
  

Applicants with identical salaries may qualify for different loan amounts depending on their existing financial obligations.

Why Mortgage Pre-approval Matters

Obtaining mortgage pre-approval before searching for a property is one of the most important steps in the buying process.

Pre-approval helps buyers:

• Understand exactly how much they can borrow.
• Focus only on properties within their budget.
• Strengthen their position when negotiating with sellers.
• Avoid disappointment if financing is later declined.
  
  

What Do Banks Look at Besides Salary?

Mortgage eligibility is based on an overall assessment of financial stability rather than income alone. Key factors include:

Employment Type

For years, the UAE operated two parallel corporate regimes. Onshore, the mainland Commercial Companies Law provided a relatively rigid menu of corporate structures, reflecting a civil law tradition and a preference for uniform rules across companies. In the financial free zones, most notably the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), investors had access to the flexible, common law mechanisms they were familiar with internationally, including bespoke share rights, sophisticated shareholders’ agreements and the exit mechanisms that underpin venture capital and private equity transactions.

The result was a persistent divide. Sponsors seeking greater flexibility often had to structure investments through the financial free zones or offshore holding companies, even where the underlying business operated entirely on the mainland.

Federal Decree-Law No. 20 of 2025, issued on 1 October 2025 and effective from 15 October 2025, the day after its publication in the Official Gazette, is the clearest indication yet that this divide is narrowing. Rather than replacing the 2021 Commercial Companies Law, the Decree-Law amends it, weaving internationally recognised corporate mechanisms into the legal framework governing approximately 760,000 registered companies. The result is a significant convergence, with mainland company law increasingly resembling the free zone regimes from which it once differed.

Share Classes and More Flexible Capital Structures

The most significant reform is that limited liability companies (LLCs) may now issue multiple classes of shares. Under the amended Article 76(4), an LLC can create different classes of shares carrying varying voting rights, dividend entitlements, redemption rights or liquidation preferences, mechanisms previously available only to public joint stock companies or companies incorporated in the financial free zones.

The importance of this change cannot be overstated. Preference shares, weighted voting rights and tailored economic interests are fundamental tools for institutional investors. Without them, mainland LLCs struggled to accommodate the preferred equity structures typically required by venture capital and private equity investors. The amendment makes such arrangements possible directly under mainland law for the first time.

The reform, however, is not yet fully operational. Until the Cabinet issues detailed implementing regulations specifying the permitted classes of shares and the conditions governing them, the default principle of equal treatment among shares remains in force.

The amendments also permit shareholders to contribute assets instead of cash as capital contributions, subject to valuation by accredited valuers and review by the competent authority. This broadens the ways in which companies may be capitalised, making it easier to contribute intellectual property, equipment or an existing business to a newly established company.

Stronger Exit and Succession Rights

Alongside greater capital flexibility, the amendments strengthen shareholder exit mechanisms.

For the first time, UAE law expressly recognises drag-along and tag-along rights, long-established features of international shareholders' agreements but previously without statutory recognition under mainland law.

A drag-along right enables qualifying shareholders to compel the remaining shareholders to participate in a sale to a third party once agreed conditions are satisfied, ensuring that a buyer can acquire the entire company without being blocked by minority holdouts. Conversely, a tag-along right allows minority shareholders to participate in a sale on the same terms as the selling shareholder, protecting them from being left behind.

By allowing these rights to be embedded in a company's constitutional documents, rather than existing solely in private contractual arrangements, the amendments provide them with a firmer legal foundation. Nevertheless, detailed shareholders' agreements will continue to govern many commercial issues, including valuation methodologies, confidentiality obligations and put and call option arrangements.

The reforms also introduce a statutory framework governing what happens to a shareholder's interest upon death. Companies or the remaining shareholders may now be given priority to acquire the deceased shareholder's shares at an agreed value. This is particularly significant for closely held and family-owned businesses, where the automatic transfer of shares to heirs has often created uncertainty and disputes.

Greater Corporate Mobility and New Organisational Structures

The amendments also make companies more mobile while expanding the range of corporate vehicles available.

A new provision allows companies to transfer their registration between competent authorities, including between emirates, from the mainland to a free zone and vice versa, and between different free zones, while preserving their legal personality, contracts, licences and operating history.

This enables businesses to align their corporate domicile with evolving commercial strategies, regulatory requirements or investor expectations without dissolving and re-incorporating or undertaking complex asset transfer exercises. Transfers involving the DIFC and ADGM, however, remain subject to further Cabinet decisions and local regulatory frameworks.

For the first time, the law also formally recognises non-profit companies as a distinct legal form. These entities provide an onshore corporate vehicle for charitable, social, cultural and mission-driven activities, with any surplus required to be reinvested in the organisation's stated objectives rather than distributed to members. The reform fills a long-standing gap for social enterprises and ESG-focused founders.

The amendments further confirm that companies incorporated in free zones and financial free zones possess UAE nationality, removing any lingering uncertainty over whether such entities could be regarded as foreign in contractual or litigation contexts.

In addition, amended Article 32 allows private joint stock companies to raise capital through private placements on UAE financial markets without undertaking a full public offering, creating a domestic fundraising route that previously encouraged many pre-IPO investments to be structured offshore.

What the Reforms Mean — and What Remains to Come

Taken together, these amendments move mainland UAE company law decisively towards the flexibility that investors have long associated with the financial free zones and other leading international jurisdictions.

The direction of travel is unmistakable. Multiple share classes, drag-along and tag-along rights, corporate re-domiciliation and private placements are all internationally recognised corporate tools that are now being incorporated into the mainland's civil law framework.

Founders, boards and investors now have a considerably broader toolkit for structuring investments, governance arrangements, financing transactions and exit strategies directly under mainland law, reducing the need to rely on free zone or offshore holding structures.

Existing companies should review their memoranda and articles of association to determine how best to take advantage of the new framework and whether existing provisions remain appropriate under the amended law.

The legislative architecture, however, is not yet complete. Several of the most significant reforms, particularly those governing multiple share classes and the licensing and governance of non-profit companies, still depend on implementing regulations from the Cabinet and the relevant authorities. Likewise, the new corporate mobility regime requires additional rules to facilitate transfers involving the DIFC and ADGM.

Until those measures are introduced, the convergence remains a framework awaiting full implementation rather than a fully operational system. Even so, the trajectory is now unmistakable. Mainland UAE company law is moving closer than ever to the sophisticated corporate environment long associated with the financial free zones.

The UAE's labour law grants employees the right to paid study leave, but only if certain conditions are met. Workers pursuing higher education often assume they are automatically entitled to 10 days of paid leave for examinations. However, the law ties this benefit to specific eligibility requirements, including the employee's length of service.

Under the UAE Labour Law, an employee may be granted 10 working days of paid study leave each year to sit examinations, provided they are enrolled and regularly studying at an educational institution approved in the UAE. To qualify for this entitlement, however, the employee must have completed at least two years of continuous service with the same employer. The employee must also provide the necessary proof from the relevant educational institution to support the leave request.

This means that an employee who has worked for the employer for only one year does not yet qualify for the statutory paid study leave. In such cases, the employer is legally entitled to refuse the request for paid study leave and may instead require the employee to use their annual leave if they wish to take time off for examinations.

The UAE’s revamped residency system has opened new pathways for professionals seeking longer-term stability in the country, and one of the most significant options is the Green Visa.

The UAE’s employment landscape has shifted decisively from the rigid, one-size-fits-all contracts of the past. Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (“Labour Law”), which came into force on February 2, 2022, and has since been amended by Federal Decree-Laws No. 14 of 2022, No. 20 of 2023 and No. 9 of 2024, together with its Executive Regulations under Cabinet Resolution No. 1 of 2022, now formally recognises six distinct work models: full-time, part-time, temporary, flexible, remote and job-sharing arrangements.


For employers, this flexibility has become an important business tool, offering greater operational agility and workforce efficiency. But it also introduces a new layer of legal and compliance obligations that did not exist under the repealed Federal Law No. 8 of 1980. This article examines the principal legal considerations employers must address when structuring and managing flexible work arrangements in the UAE.

Part-time, Temporary, Flexible and Remote Work Arrangements

Article 7 of the Labour Law, read with the Executive Regulations, defines each non-traditional work model by reference to working hours, duration and the nature of the role. Part-time work allows an employee to work for one or more employers for a specified number of hours or days that are fewer than those of a full-time role. Temporary work is linked to a defined project or period and ends automatically once the task is completed. Flexible work allows working hours or days to vary according to the employer’s operational requirements and business needs. Remote work permits employees to perform all or part of their duties outside the conventional workplace, whether on a full-time or part-time basis.

Job-sharing, meanwhile, allows two or more employees to divide the responsibilities of a single role, with wages apportioned accordingly. Each employee in such an arrangement is treated under the part-time framework.

Tenants in Sharjah are protected from arbitrary rent increases and eviction under the emirate’s updated tenancy law, offering greater clarity on disputes between landlords and tenants over rental revisions.

Losing a job in the UAE does not necessarily mean an immediate end to one’s residency options. For many professionals exploring ways to remain in the country and continue earning, the freelance visa has emerged as a practical legal alternative, allowing individuals to work independently without being tied to a single employer.

Under the UAE’s employment framework, freelancing is recognised as a formal and regulated mode of work. The legal basis for this comes under Cabinet Resolution No. 1 of 2022, which implements Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations. The law specifically identifies the freelance permit as one of the approved work permit categories in the country.

The freelance permit allows individuals to undertake self-employment without sponsorship from a specific company or employer and without the requirement of a traditional employment contract. Instead, freelancers can generate income by offering services for a defined period, carrying out specific assignments, or completing tasks for individuals or businesses. Importantly, the law makes it clear that freelancers are not considered employees of the parties they provide services to.

The same resolution further defines freelancing as an independent and flexible work arrangement designed to support labour market adaptability and modern work models. It also empowers authorities to regulate the procedures for registration, renewal and cancellation of freelance permits through the Ministry of Human Resources and Emiratisation and other competent authorities.

In Dubai, individuals seeking a freelance work permit or freelance licence must apply through the Dubai Department of Economy and Tourism or designated free zone authorities, depending on the nature of the professional activity. These permits are generally issued under specific business or professional categories and remain subject to regulatory approvals.

A freelance residence visa can usually be obtained only after securing a valid freelance permit or certificate from the relevant licensing authority. This visa then allows the holder to legally reside in the UAE while carrying out freelance work.

For those planning to bring their families under their sponsorship, the UAE permits freelance visa holders to sponsor spouses and children, provided they meet the standard residency and financial requirements. This typically includes furnishing proof of stable income or contractual earnings, with the minimum threshold generally set at Dh4,000 per month without accommodation or Dh3,000 with accommodation.

Applicants may also need to provide supporting documents, including tenancy contracts, attested relationship certificates and other immigration records, depending on the case. Since sponsorship approvals remain subject to immigration regulations, individuals are advised to verify the latest procedural requirements with the relevant residency authorities before applying.

Buying a second-hand car can often be seen as a practical and affordable alternative to purchasing a brand-new vehicle. But what happens when the vehicle turns out to have serious defects that were not disclosed at the time of sale? Under the UAE’s updated consumer protection framework, buyers of used vehicles are not left without remedies.

The UAE’s consumer protection law has widened its scope in recent years, making it increasingly clear that second-hand vehicle transactions — particularly those involving licensed used-car dealers — can fall under its protection. This is especially relevant in cases where a seller may have concealed major defects, misrepresented the condition of the vehicle, or engaged in misleading sales practices.

The legal basis stems from Federal Law No. 15 of 2020 on Consumer Protection, as amended by Federal Decree Law No. 5 of 2023. Article 3 of the law makes it clear that its provisions apply to all goods and services supplied within the UAE through suppliers, commercial agents, and dealers. Importantly, the law does not exclude second-hand goods from its scope. This means used vehicles sold by registered dealers may be treated as consumer goods under the law.

This legal coverage becomes significant when a buyer discovers faults after purchase and suspects the defects were known to the seller but intentionally withheld. In such situations, the seller’s obligations under the law become central.

One of the most important duties imposed on sellers is the obligation to provide accurate information about the product being sold. Article 17 of the Consumer Protection Law prohibits suppliers, advertisers and commercial agents from describing goods or services with false data or through misleading advertisements.

This protection is strengthened by Cabinet Decision No. 66 of 2023, which serves as the executive regulation of the law. Under Article 8 of the regulation, any description or advertisement of a product is considered deceptive if it creates a false or misleading impression about the product’s nature, composition, quality, source, condition, warranty, or expected results from its use.

In the case of used cars, this means dealers cannot advertise a vehicle as being in excellent condition if it has significant engine issues, accident damage, or mechanical faults that are known to them. They are also required to disclose the true state of the vehicle clearly.

Article 7 of the same regulation specifically deals with used, refurbished or defective goods. It requires suppliers to clearly display the condition of such goods both on the product and at the place of business. The condition must also be clearly reflected in the sales contract or invoice. The law aims to ensure that buyers are fully aware of what they are purchasing and that there is no room for deception.

This provision is particularly important in the used-car market, where disputes often arise over whether a defect was pre-existing or developed after the sale. If the condition of the vehicle was not properly disclosed or documented, the seller may face legal consequences.

A Dubai court has dismissed a financial claim exceeding Dh15.5 million and nullified a signed debt acknowledgment, ruling that the claimant failed to prove the transfer of the alleged loan amount in a judgment that legal experts say could have wider implications for debt recovery disputes in the UAE.

The case involved a private financial dispute in which the claimant sought recovery of Dh15,877,000 based on a signed debt acknowledgment document, supported by a security cheque and a repayment schedule setting out 11 installments.

Court documents showed that the defendant had formally acknowledged receiving the amount as a personal loan, a form of evidence that typically carries significant weight under UAE law.

However, the defence challenged the validity of the claim by arguing that a loan agreement could not stand without objective proof that the funds had actually been delivered.

Lawyers for the defendant told the court that the claimant had failed to produce bank transfer records, account statements or receipts to establish the movement of nearly Dh16 million, despite the scale of the alleged transaction.

They argued that in the UAE’s regulated banking system, a transaction of that magnitude would ordinarily leave a clear financial trail.

The defence also relied on WhatsApp exchanges between the parties, arguing that the messages were inconsistent with the behaviour of someone claiming to be owed millions of dirhams. According to court filings, the messages included repeated requests for relatively small amounts to cover personal and household expenses, including education costs.

The defendant further argued that the financial relationship between the parties arose out of a joint business venture rather than a personal loan, and that payments previously made were discretionary business distributions rather than loan repayments.

The court appointed a forensic accounting expert to examine the matter. In the report, the expert found that the claimant’s conduct and financial circumstances did not align with the claim of having advanced such a substantial loan.

The expert noted that it was difficult to reconcile the alleged ability to lend nearly Dh16 million with later expressions of financial distress over routine daily expenses. The report also found that for more than six months — including periods when Dh6.1 million in installments was allegedly overdue — the claimant made no formal demands or reference to the supposed debt.