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In an increasingly globalised world, it is common for individuals to marry in one country, live in another and divorce in a third. This makes the recognition and enforcement of foreign divorce judgments a significant legal issue — particularly in the United Arab Emirates, where expatriates make up the overwhelming majority of the population.

A divorce judgment issued by a foreign court does not automatically take legal effect in the UAE. Whether it will be recognised depends on the applicable UAE legislation, the jurisdiction that issued the judgment, the existence of any treaty between the UAE and that jurisdiction, and compliance with the procedural requirements of UAE law. Understanding these requirements is essential for anyone seeking to rely on a foreign divorce judgment for purposes such as remarriage, updating civil status, child custody, maintenance, inheritance or the enforcement of financial obligations within the UAE.

Recognition Vs Enforcement

Although often used interchangeably, recognition and enforcement are legally distinct concepts.

Recognition refers to the UAE courts acknowledging the legal validity of a foreign divorce judgment. Once recognised, the divorce may be relied upon as proof that the marital relationship has legally ended — for example, to update one's marital status with UAE authorities or to remarry.

Enforcement concerns the implementation of obligations contained in the judgment, such as payment of maintenance or alimony, transfer of assets, or custody and access arrangements. In practice, UAE procedure treats these as two stages of a single process: the court first satisfies itself that the judgment meets the statutory conditions for recognition and enforcement, and execution measures then follow through the execution court.

Importantly, a judgment may be recognised without every part of it being enforceable. This distinction matters most where the foreign judgment contains continuing financial obligations or orders affecting children, some of which may conflict with mandatory provisions of UAE law.

The UAE Legal Framework

The recognition and enforcement of foreign judgments before the UAE onshore courts is governed primarily by Federal Decree-Law No. 42 of 2022 promulgating the Civil Procedure Law, as amended, which replaced Federal Law No. 11 of 1992. The key provisions are Articles 222 to 225, which set out the conditions and procedure for enforcing foreign judgments, orders, authenticated instruments and court-ratified settlements.

Two structural points are worth noting at the outset:

Treaties take precedence. Article 225 provides that international treaties and conventions to which the UAE is a party prevail over the domestic regime. The UAE is a party to several relevant instruments, including the Riyadh Arab Convention on Judicial Cooperation (1983) and the GCC Convention on the Enforcement of Judgments (1996), and has concluded bilateral judicial cooperation treaties with countries including France, India, China and Egypt. Where a treaty applies, its conditions — which are often less demanding than the domestic regime — govern the application.

Reciprocity underpins the domestic regime. In the absence of a treaty, Article 222 permits enforcement of a foreign judgment in the UAE on the same conditions that the issuing country applies to UAE judgments. In other words, the applicant benefits from showing that a UAE judgment would, in comparable circumstances, be capable of enforcement in the foreign jurisdiction. UAE courts have in recent years taken an increasingly pragmatic approach to reciprocity, including in respect of jurisdictions such as England and Wales, with which no bilateral enforcement treaty exists.

The Modernised Family Law Landscape

The substantive family law backdrop has also changed significantly. Beginning with Abu Dhabi Law No. 14 of 2021, which created the region's first civil personal status regime for non-Muslims, the federal government extended a civil, non-religious framework nationwide through Federal Decree-Law No. 41 of 2022 on Civil Personal Status. Most recently, Federal Decree-Law No. 41 of 2024 on Personal Status, in force since 15 April 2025, replaced the 2005 Personal Status Law and consolidated the framework governing marriage, divorce, custody and maintenance for Muslims and non-Muslims across the Emirates.

These reforms matter for recognition applications because public policy is assessed against the UAE's current legal principles. A foreign no-fault divorce, an equal-custody arrangement, or a financial order of a kind now familiar under the civil personal status regime is considerably less likely to raise public policy objections today than it might have done a decade ago.

Conditions for Recognition

Under Article 222 of the Civil Procedure Law, the execution judge must be satisfied of several matters before ordering enforcement of a foreign judgment:

1. The UAE courts did not have exclusive jurisdiction over the dispute, and the foreign court was competent to hear it under its own rules of international jurisdiction.
2. The judgment was issued by a court with jurisdiction under the law of the country in which it was rendered, and was duly authenticated.
3. The parties were properly summoned and represented in the foreign proceedings. Due process is a central safeguard, and defective service on the respondent is one of the most common grounds of objection.
4. The judgment is final and has the force of res judicata under the law of the issuing court. Interim, provisional or appealable decisions are treated differently from final judgments, and applicants are generally expected to produce a certificate of finality.
5. The judgment does not conflict with a judgment or order previously issued by a UAE court and contains nothing contrary to UAE public order or morals.

Crucially, these are procedural checks, not a retrial. The UAE courts do not reconsider the merits of the divorce or re-examine the foreign court's factual findings, and the respondent cannot use enforcement proceedings to relitigate the underlying dispute. Challenges are confined to whether the Article 222 conditions have been met.

Procedure

The 2022 Civil Procedure Law streamlined the process considerably. An application for a writ of execution is submitted directly to the execution judge of the competent court, rather than by way of a full substantive claim as under the pre-2018 regime, and the judge is required to issue a decision within five working days of submission. The decision is subject to appeal in accordance with the usual rules.

It should be noted that family matters fall within the jurisdiction of the onshore courts, including specialised civil family courts such as the Abu Dhabi Civil Family Court. The common-law financial free zone courts of the DIFC and ADGM, which have their own enforcement regimes, do not deal with divorce.

Practical Considerations for Expatriate Families

Recognition of a foreign divorce judgment can become necessary in a variety of practical situations:

• An individual divorced abroad may wish to update their marital status with UAE authorities, remarry in the UAE, or deal with immigration, inheritance or succession-planning matters that turn on their civil status.
• A party seeking to enforce maintenance, child support or a financial settlement against assets or income located in the UAE will generally need the underlying foreign judgment recognised before execution measures, such as attachment of bank accounts, salaries or property, can be pursued.
• Where children are involved, custody and access arrangements in a foreign order require particular care. The UAE courts place the best interests of the child at the centre of any decision affecting minors and may decline to enforce arrangements they consider inconsistent with the child's welfare or with mandatory provisions of UAE law, even where the judgment is otherwise recognised.

Documents Commonly Required

The precise documentation depends on the issuing jurisdiction and whether a treaty applies, but applicants should typically expect to provide:

• A complete, certified copy of the foreign divorce judgment;
• A certificate or other official evidence that the judgment is final and enforceable in the issuing country, for example, confirmation that no appeal is pending and that the time for appeal has expired;
• Evidence of proper service of the proceedings on the respondent, where this is not apparent from the judgment itself.

Foreign documents must be legalised for use in the UAE. Because the UAE is not a party to the Hague Apostille Convention, an apostille alone is generally not sufficient: documents ordinarily require attestation in the country of origin, legalisation by the UAE embassy or consulate there, and attestation by the UAE Ministry of Foreign Affairs. All documents must then be translated into Arabic by a translator licensed by the UAE Ministry of Justice.

Incomplete documentation or defective legalisation is one of the most common causes of delay and rejection and is usually avoidable with early preparation.

Potential Challenges

Although many foreign divorce judgments are recognised without difficulty, applications are not always straightforward. Problems commonly arise where:

• There are disputes over the foreign court's jurisdiction, or an argument that the UAE courts were already seised of the matter;
• Service of the foreign proceedings on the respondent was defective or cannot be evidenced;
• The judgment is not yet final, or finality cannot be adequately proved;
• Parallel proceedings exist, for example, where one spouse has commenced divorce or financial proceedings in the UAE while the other has obtained, or is pursuing, a judgment abroad. The order in which proceedings were commenced and judgments issued can be decisive, since a prior conflicting UAE judgment is an absolute bar to recognition;
• Elements of the foreign order engage UAE public policy. Historically, this was an issue for certain financial and custody arrangements, although the scope for such objections has narrowed following the recent family law reforms.

In cases involving substantial financial settlements, business interests, trusts or assets spread across jurisdictions, careful analysis is often needed to determine which parts of a foreign judgment can be enforced in the UAE and which require separate proceedings before the UAE courts.

Strategic Legal Planning

International family matters frequently involve a choice between jurisdictions with very different procedural rules, financial remedies and approaches to children. Legal strategy should therefore not begin only after a divorce has been granted.

Individuals with cross-border family circumstances should consider at an early stage which jurisdiction is most appropriate, and available, for the divorce; whether a judgment from that jurisdiction is likely to be recognised where the parties' assets and lives are located; whether a treaty route to enforcement exists; and how orders concerning children will operate across borders. Where UAE enforcement is foreseeable, the foreign proceedings can often be conducted in a way that pre-empts the most common objections — for example, by ensuring meticulous, well-documented service on the respondent.

Early advice can significantly reduce delay, minimise procedural objections and improve the prospects of successful recognition and enforcement.

Conclusion

The UAE provides a structured and, following the 2022 Civil Procedure Law and the 2024–2025 family law reforms, an increasingly efficient mechanism for recognising and enforcing foreign divorce judgments, reflecting its position as a global business and expatriate hub. Recognition is nonetheless not automatic: the statutory conditions must be satisfied, documents must be properly legalised and translated, and elements of a foreign order touching on finances or children may require separate consideration.

Each application turns on its own facts, the issuing jurisdiction, the existence of an applicable treaty and the relief sought. For individuals navigating cross-border family disputes, obtaining jurisdiction-specific advice at an early stage remains the most effective way to protect their rights and ensure that foreign court orders can be relied upon within the UAE.

Franchising is often described as a business model built around a brand. But behind the logo, name and customer experience lies a much broader collection of intellectual property (IP) assets that can determine the success, value and longevity of a franchise system.

For an international franchisor, protecting these assets is not simply a matter of registering a trademark. A franchise may involve trademarks, copyrighted materials, confidential information, recipes, operating manuals, software, marketing content, domain names, social media accounts and proprietary business methods. Each can create legal and commercial risks if ownership and permitted use are not clearly established.

As franchise systems expand across borders, IP protection should therefore be treated as a core part of franchise strategy rather than an issue to be addressed only when a dispute arises.

Trademark Registration: Protecting the Face of the Franchise

Trademarks are usually among the most visible and valuable assets in a franchise system. They may include the brand name, logo, slogans, product names, packaging designs and other distinctive identifiers associated with the business.

A franchisor should consider registering its key marks in every jurisdiction where it intends to operate or grant franchise rights. Registration in the franchisor's home country does not automatically provide protection in other markets.

This becomes particularly important in jurisdictions where trademark rights are largely based on registration. A third party, competitor or even a franchisee could potentially register a similar or identical mark before the legitimate brand owner does.

International expansion should therefore be preceded by an IP audit and trademark strategy covering existing and planned markets. Franchise agreements should also clearly establish that the franchisee receives a limited right to use the trademarks and does not acquire ownership of them.

Trade Secrets and Know-How: The Hidden Value

Some of the most commercially important elements of a franchise cannot easily be protected through registration.

A successful franchise may depend on recipes, production techniques, pricing methods, supplier arrangements, customer databases, training methods, operational procedures and business strategies. Collectively, these may constitute valuable confidential information or know-how. The challenge is to ensure that confidential information remains confidential.

Franchise agreements should identify the types of information considered confidential and impose appropriate obligations on franchisees, employees and contractors. Operational manuals and training materials should be controlled carefully, while access to particularly sensitive information may need to be restricted.

Confidentiality obligations should also continue after the franchise relationship ends, particularly where the information remains commercially sensitive.

Copyright: Protecting the Franchise's Creative Assets

Copyright can protect many of the creative materials used within a franchise system, including websites, advertising materials, photographs, videos, training manuals, software, graphic designs and written content. However, a key issue is ownership.

A franchisor may commission a marketing agency, designer, photographer or software developer to create material without automatically becoming the legal owner of all associated rights. Appropriate contracts should therefore deal expressly with copyright ownership and permitted use.

The same principle applies when franchisees create marketing campaigns, photographs, promotional materials or other content locally. The franchise agreement should establish who owns that material and whether the franchisor has the right to reuse or modify it.

Brand Licensing: Permission Is Not Ownership

Franchising commonly involves licensing IP rights to franchisees. But a licence should not be confused with ownership.

The franchise agreement should specify exactly which IP assets the franchisee may use, for what purpose, in which territory and for how long. It should also address whether the franchisee can modify logos, create local advertising, register related marks or use the brand on third-party platforms.

The franchisor should retain sufficient control over the way its IP is used to protect brand consistency and reputation.

Poorly drafted licensing provisions can create uncertainty over the scope of the franchisee's rights and make enforcement more difficult.

Domain Names and Social Media Accounts

A modern franchise's IP portfolio extends well beyond traditional intellectual property. Domain names and social media accounts can have substantial commercial value, particularly where they incorporate the franchise brand or have accumulated a significant following.

Ownership should be established from the outset. Ideally, core domain names and official social media accounts should remain under the franchisor's control, with franchisees receiving appropriate access or permissions to operate local accounts.

If franchisees register domain names or social media handles containing the brand name in their own names, recovering those assets after termination can become complicated.

The franchise agreement should therefore address registration, ownership, access credentials, content, data and the transfer of digital accounts when the relationship ends.

Counterfeit Products: A Threat Beyond Lost Sales

Counterfeiting can cause significant damage to a franchise system. Unauthorised products bearing a franchise's trademarks may result not only in lost revenue but also in reputational damage if consumers associate poor-quality products with the legitimate brand.

Franchisors should monitor markets for counterfeit goods and establish procedures for identifying and reporting infringement.

Where appropriate, trademark registration, customs enforcement mechanisms, online platform complaints and civil or criminal remedies may be available depending on the jurisdiction.

Franchisees can also play an important role by reporting suspected counterfeit products and unauthorised use of the brand.

IP Infringement by Franchisees

Interestingly, one of the biggest IP risks can come from within the franchise network itself. A franchisee may use the brand beyond the scope of its licence, reproduce copyrighted materials without permission, disclose confidential information or develop a competing business using the franchisor's know-how.

The franchise agreement should therefore contain clear IP provisions covering permitted use, quality control, confidentiality, infringement reporting, audits and remedies.

It should also distinguish between authorised local adaptation and unauthorised alteration. Franchisees may need flexibility to adapt marketing or products to local markets, but that flexibility should operate within clearly defined boundaries.

Who Owns Locally Developed IP?

Local adaptation creates one of the more complicated ownership questions in international franchising.

A franchisee may develop a new advertising concept, packaging design, software feature, product variation or operational process specifically for its market. The question then becomes: who owns the resulting IP? The answer should not be left to assumption.

The franchise agreement should establish ownership rules for IP created by the franchisor, the franchisee or jointly. It should also address whether locally developed IP must be assigned to the franchisor, whether the franchisee receives any continuing rights to use it, and how improvements to existing franchisor IP are treated.

Clear contractual provisions can prevent disputes when a successful local innovation becomes valuable to the wider franchise network.

What Happens When the Franchise Ends?

IP protection does not stop when a franchise agreement is terminated. In many respects, this is when enforcement becomes most important.

Once the relationship ends, the franchisee should normally cease using the franchisor's trademarks, copyrighted materials, confidential information and other licensed IP, subject to the terms of the agreement and applicable law.

This should include removing branding from premises, vehicles, websites, social media pages, packaging and promotional materials. Domain names and digital accounts may also need to be transferred or deactivated.

The franchise agreement should contain clear post-termination obligations and mechanisms for ensuring that the franchisor can regain control of its IP assets.

A former franchisee that continues trading under a familiar name or using proprietary systems can create confusion among customers and undermine the value of the entire franchise network.

IP Strategy Should Come Before Expansion

For franchisors, intellectual property should be treated as a strategic asset from the earliest stages of expansion.

Before entering a new market, businesses should identify what IP they own, determine where protection is required, confirm ownership and establish how those rights will be licensed to franchisees. The franchise agreement should then translate that strategy into enforceable contractual obligations.

Ultimately, a franchise is more than a name on a shopfront. Its value may lie in a carefully developed combination of brand identity, knowledge, systems, creative assets and digital presence. Protecting those assets is essential not only to preventing infringement but also to preserving the consistency and commercial value of the franchise network.

For a franchisor planning international growth, the most important IP question may therefore not be simply, “Is the brand registered?” It is whether every element that makes the brand valuable is properly identified, owned, protected and controlled.

Dr. Sunil Ambalavellil is the Global Executive Chairman of Kaden Boriss, an international law firm specialising in franchise and business agreements. A seasoned legal adviser, he has advised and supported the international growth of numerous global brands, helping them navigate the legal complexities of cross-border expansion.

A franchise agreement is the legal foundation of the relationship between a franchisor and franchisee. While the commercial proposition may be attractive, the agreement ultimately determines how the franchise operates, what the franchisee must pay, what the franchisor can require, and what happens when the relationship goes wrong.

For a prospective franchisee, signing the agreement without understanding its key provisions can create obligations that last for years. For a franchisor, poorly drafted clauses can make it difficult to maintain brand standards, recover unpaid amounts or terminate a failing franchise.

The following provisions deserve particular attention before a franchise agreement is signed.

Initial Franchise Fees: What Are You Paying For?

The initial franchise fee is generally the amount paid by the franchisee for entering the franchise system. It may cover the right to use the brand, initial training, assistance with setting up the business and access to the franchisor's systems and know-how. However, the headline fee may not represent the franchisee's total initial financial commitment.

The agreement should make clear what the initial fee covers and whether it is refundable under any circumstances. A prospective franchisee should also identify additional costs, such as training, technology, fit-out, equipment, legal fees and other onboarding expenses.

Understanding these costs at the outset can prevent an apparently affordable franchise from becoming considerably more expensive.

Royalties: The Ongoing Cost of the Franchise

Royalties are typically paid throughout the franchise term and may be calculated as a percentage of turnover, a fixed amount or another agreed formula.

The calculation method matters. A franchisee should understand whether royalties are based on gross sales, net sales or another measure, and whether certain transactions or discounts are excluded.

The agreement should also address payment dates, reporting obligations, interest on late payments and the franchisor's rights if royalties remain unpaid.

A small difference in the royalty structure can have a significant impact on profitability over the lifetime of a franchise.

Marketing Contributions: Who Pays for the Brand?

Franchisees may be required to contribute to a central marketing or advertising fund. These contributions are generally intended to support campaigns designed to benefit the wider franchise network.

However, the agreement should explain how the fund operates and how contributions are calculated.

Questions can arise over whether the franchisor may use the fund for corporate advertising, administrative expenses, market research or other activities. Franchisees should understand what level of transparency and reporting they can expect.

A marketing contribution should not be treated as simply another percentage on top of royalties. Its purpose and financial impact should be assessed as part of the overall franchise investment.

Territory and Exclusivity: Where Can You Operate?

Territory provisions can have a major impact on a franchisee's potential revenue.

An agreement may provide an exclusive territory, a protected territory or no territorial protection at all. These terms are not interchangeable.

Even where a franchisee receives territorial protection, the agreement should specify what that protection actually covers. Can the franchisor open another outlet nearby? Can it sell products online into the territory? Can another franchisee provide delivery services to customers located there?

Digital sales, delivery platforms and e-commerce have made traditional geographical boundaries increasingly complicated.

Territory provisions should therefore be examined carefully rather than relying on informal assurances about exclusivity.

Performance Targets: What Happens If You Miss Them?

Franchise agreements may contain minimum sales targets, opening deadlines, customer-service standards or other performance requirements.

These provisions can be commercially reasonable because franchisors need to protect the strength and consistency of their networks. However, they can also create serious consequences for franchisees if targets are unrealistic.

The agreement should explain how performance is measured, when targets are reviewed and what happens if they are not achieved.

A failure to meet a target may trigger additional support, corrective measures, financial penalties or, in some cases, termination. The franchisee should understand those consequences before signing.

Supply Obligations: Who Controls Your Suppliers?

Many franchisors require franchisees to purchase products, equipment, ingredients or other materials from approved suppliers.

These requirements may be necessary to maintain consistent quality across the network. However, they can also affect the franchisee's operating costs and margins.

The agreement should identify whether purchases must be made exclusively from nominated suppliers or whether alternative suppliers can be approved.

A franchisee should also understand whether the franchisor receives rebates, commissions or other financial benefits from suppliers, where legally relevant.

Pricing Controls: How Much Freedom Does the Franchisee Have?

Pricing provisions can be particularly sensitive.

A franchisor may want consistent pricing across its network, while franchisees need sufficient commercial flexibility to respond to local competition, costs and customer demand.

The agreement should therefore be examined carefully to determine whether prices are recommended, controlled or subject to other restrictions.

This issue may also be affected by applicable competition law. A contractual provision that appears commercially straightforward can raise legal questions depending on the market and jurisdiction.

Audit Rights: The Franchisor's Right to Check the Books

Franchisors commonly retain audit rights to verify sales figures, royalty calculations and compliance with the franchise agreement. The scope of these rights matters.

The agreement may permit the franchisor to inspect financial records, accounting systems, inventory and other business information. It may also provide for additional fees or penalties if an audit identifies an underpayment.

Franchisees should understand how frequently audits can occur, what records must be maintained and who bears the cost of an audit.

Renewal: What Happens When the Term Ends?

A franchise agreement does not necessarily guarantee renewal. The agreement should state the initial term, renewal periods, notice requirements and conditions that must be satisfied before renewal.

These conditions may include payment of outstanding amounts, compliance with the agreement, refurbishment of premises, execution of the franchisor's then-current agreement or achievement of specified standards.

A franchisee that invests heavily in a location should understand the renewal position well before committing to that investment.

Termination: When Can the Relationship End?

Termination provisions are among the most important clauses in the entire agreement. The franchisor may have the right to terminate for serious breaches, non-payment, insolvency, unauthorised use of IP, reputational misconduct or repeated failure to comply with operational standards.

The agreement should distinguish between breaches that can be remedied and those that permit immediate termination.

For a franchisee, the consequences of termination can be substantial. The business may have to stop trading under the brand, remove signage and return confidential materials and equipment.

Non-Compete and Post-Termination Restrictions

Franchise agreements frequently contain restrictions designed to prevent franchisees from using the franchisor's know-how to establish or support a competing business. These restrictions may apply during the franchise term and, in some cases, after termination.

Their enforceability can depend on applicable law, including rules concerning duration, geographical scope and the legitimate interests being protected.

A prospective franchisee should understand precisely what activities could be restricted after leaving the franchise network rather than assuming that termination means complete commercial freedom.

Dispute Resolution: What Happens When Things Go Wrong?

Even carefully negotiated franchise relationships can result in disputes. The agreement should specify how disputes will be resolved and which law and courts or arbitral forum will apply.

For international franchises, this becomes particularly important. A dispute involving parties in different countries can raise questions about jurisdiction, enforcement and the location of proceedings.

The agreement may require negotiation or mediation before litigation or arbitration. The choice of dispute resolution mechanism can significantly affect the cost, speed and practical outcome of a dispute.

The Five Clauses a Franchisee Should Never Sign Without Legal Advice

Although every provision deserves attention, five areas should receive particular scrutiny from a prospective franchisee:

1. Territory and exclusivity – because they determine the commercial space in which the franchise can operate and whether competing outlets may be established.
2. Financial obligations – including initial fees, royalties, marketing contributions and other charges that determine the real cost of the franchise.
3. Performance requirements – because missed targets can trigger penalties, additional obligations or termination.
4. Termination and post-termination restrictions – because they determine how the relationship can end and what the franchisee can do afterwards.
5. Dispute resolution – because the chosen law, jurisdiction and procedure can significantly affect the cost and practical ability to enforce rights.

Read the Agreement as a Business Document, Not Just a Legal Document

A franchise agreement should not be assessed solely on whether its language appears legally standard. Each clause has a commercial consequence.

A territory clause affects revenue potential. A royalty clause affects profitability. A supply obligation affects costs. Performance targets affect operational pressure. Termination provisions affect the value of the investment itself.

For franchisors, the objective is to create a framework that protects the brand while providing clear and workable obligations for franchisees. For franchisees, the priority should be understanding the financial, operational and legal commitments before signing.

Ultimately, a franchise agreement is not simply paperwork that follows a business deal. It is the document that defines the deal. Understanding its most important clauses before signing can help both parties identify risks, negotiate realistic terms and build a franchise relationship on clearer legal and commercial foundations.

Dr. Sunil Ambalavellil is the Global Executive Chairman of Kaden Boriss, an international law firm specialising in franchise and business agreements. A seasoned legal adviser, he has advised and supported the international growth of numerous global brands, helping them navigate the legal complexities of cross-border expansion.

Ask most tenants what happens if they fall behind on rent and you'll get one of two answers: the law will sort out a fairer payment plan, or a landlord who won't budge is breaking the rules. Both answers are wrong. Here's what Dubai's tenancy law and the UAE Civil Code actually say, and where a tenant in real difficulty still has room to work with.

Rent Payment Schedules are a Matter of Contract, Not Statutory Right

Franchising was once viewed primarily as a contractual exercise. A brand owner had a business model, a prospective franchisee wanted to operate it in a new market, and lawyers were brought in to document the arrangement. That model is changing.

Today, a sophisticated franchise lawyer is increasingly involved before the parties sign a term sheet, remains closely engaged throughout negotiations and structuring, and continues to advise after the franchise agreement has been executed. The lawyer's role is no longer confined to protecting legal rights through carefully drafted clauses. It increasingly involves helping clients determine whether a market is suitable, how the business should enter that market, what regulatory risks could affect the model, how intellectual property should be protected and how the relationship can be structured to support long-term growth.

This evolution is particularly relevant in markets such as the UAE, where franchising operates within a broader legal framework rather than under a single comprehensive federal franchise statute. Depending on the structure and substance of the relationship, issues may involve contract law, commercial agency legislation, intellectual property, corporate structures, licensing and sector-specific regulation.

The result is the emergence of what could be described as the new franchise lawyer: a legal adviser who understands not only the franchise agreement but also the commercial architecture surrounding it.

Franchising is No Longer Simply About the Agreement

A franchise agreement remains the central legal document, but it is only one part of a much larger commercial relationship.

A typical international franchise arrangement can involve:

• the franchisor's intellectual property;
• the franchisee's corporate and ownership structure;
• territorial rights;
• development obligations;
• regulatory approvals;
• licensing requirements;
• supply and distribution arrangements;
• technology and data;
• marketing and brand standards;
• financing;
• employment;
• real estate and premises;
• consumer protection;
• dispute resolution; and
• termination, renewal and post-termination restrictions.

A lawyer who approaches the transaction solely by reviewing the franchise agreement may therefore identify contractual risks without identifying the commercial risks that produced them.

The strategic franchise lawyer takes a different approach. The starting question is not simply, "What should the contract say?"

It is also: "Is this the right structure, in the right market, with the right partner, and does the legal framework support the client's commercial objectives?"

That change in perspective is reshaping franchise legal practice.

Before the Deal: The Lawyer as Market-Entry Adviser

The most significant evolution may be taking place before the franchise agreement is even drafted.

International brands entering the UAE or wider GCC cannot assume that a successful franchise model in one jurisdiction can simply be transferred unchanged into another.

The legal adviser increasingly becomes part of the market-entry team.

Market Entry

The first task is to understand how the proposed franchise will actually operate in the target market.

Will the brand operate through a master franchise arrangement, area development agreement, direct franchise agreements, a joint venture, a local operating company, a distribution model or another structure?

Each option can produce different legal, financial and operational consequences.

The lawyer must therefore understand the client's commercial objectives before recommending the legal structure.

Questions can include:

• Who will control the local business?
• Who will employ the staff?
• Who will hold the leases?
• Who will import products?
• Who will own local intellectual property?
• Who will receive franchise fees and royalties?
• Who will fund expansion?
• Who will control marketing?
• Who will bear regulatory responsibility?
• What happens if the relationship ends?

These are commercial questions with legal consequences.

In the UAE, particular attention may also be required to determine whether the proposed relationship could fall within the scope of commercial agency legislation. Federal Law No. 3 of 2022 defines commercial agency broadly and provides for registration and specific legal consequences where an arrangement qualifies as a commercial agency.

Consequently, the lawyer's involvement at the structuring stage can be critical.

A poorly considered structure can create difficulties that cannot easily be corrected by changing a few clauses in the franchise agreement.

Regulatory Due Diligence

Franchise businesses frequently operate in regulated sectors. Food and beverage, healthcare, education, financial services, fitness, retail, beauty and other sectors can each involve different licensing and regulatory requirements.

A franchise lawyer therefore needs to understand not only franchise law but also the regulatory environment in which the franchise will operate.

Regulatory due diligence may examine:

• business licensing;
• sector-specific approvals;
• foreign ownership considerations;
• local operating requirements;
• import and customs issues;
• advertising restrictions;
• consumer protection;
• employment requirements;
• data protection;
• health and safety;
• product standards;
• premises requirements; and
• local authority approvals.

This makes franchise work inherently multidisciplinary.

The lawyer may need to coordinate with corporate, intellectual property, employment, tax, real estate, regulatory and dispute-resolution specialists.

Intellectual Property Protection

For many franchisors, the most valuable asset being transferred into a new market is not physical property but the brand itself.

The franchise model depends on the franchisee being able to use the franchisor's trademarks, business identity, operating systems, know-how and other intellectual property while maintaining the standards associated with the brand.

That makes intellectual property protection a fundamental component of market-entry planning.

The UAE's trademark framework expressly provides for trademark licensing. Federal Decree-Law No. 36 of 2021 permits trademark owners to license the use of registered marks, while Article 31 requires trademark licence agreements to be in writing and duly notarised.

A strategic franchise lawyer will therefore consider IP protection before the commercial launch rather than treating it as an issue that can be dealt with after the franchise agreement has been signed.

This may include checking:

• whether the brand is already protected in the target market;
• whether similar marks exist;
• whether relevant classes are covered;
• who should own local registrations;
• how domain names and digital assets are controlled;
• whether the franchisee can use the brand on social media; and
• what happens to the IP when the franchise ends.

For international brands, these questions can become particularly important when entering multiple jurisdictions with different registration systems and enforcement mechanisms.

Structuring the Relationship

One of the lawyer's most valuable contributions can be determining the appropriate legal architecture for the franchise.

A master franchise arrangement may provide rapid regional expansion but can introduce additional layers of risk because the master franchisee may itself appoint and supervise sub-franchisees.

An area development model may give the franchisee development rights without permitting sub-franchising.

A joint venture may provide the franchisor with greater involvement in the local business but also introduces shareholder, governance and exit issues.

The choice is therefore not merely a drafting preference. It is a business decision that requires legal analysis.

During the Deal: The Lawyer as Transaction Strategist

Once the parties decide to proceed, the lawyer's role moves from market-entry planning to transaction execution. This stage involves considerably more than producing a standard franchise agreement.

Disclosure and Transparency

Disclosure has become an important component of sophisticated franchise transactions. The objective is to ensure that the prospective franchisee understands the commercial and operational commitments it is undertaking and that material information is properly addressed during negotiations.

A strategic adviser will help identify what information should be disclosed, what representations should be made, which assumptions should be documented and which matters require further due diligence.

The process can also help reduce future disputes. If a franchisee later argues that it entered the relationship based on inaccurate financial assumptions, misleading representations or incomplete information, the documentation surrounding the negotiations can become important evidence.

The lawyer therefore has a role in managing expectations as well as legal liability.

Negotiating the Commercial Bargain

Franchise negotiations can become difficult because the parties are trying to balance competing interests.

The franchisor wants to protect its brand, maintain uniform standards and preserve control.

The franchisee wants sufficient flexibility to respond to local market conditions and generate a return on its investment.

The lawyer must help translate those competing objectives into workable contractual mechanisms.

Important negotiating issues may include:

• franchise fees;
• royalties;
• marketing contributions;
• territory;
• exclusivity;
• minimum performance requirements;
• development schedules;
• approved suppliers;
• pricing controls;
• quality standards;
• audit rights;
• technology obligations;
• renewal rights;
• transfer restrictions;
• termination rights;
• post-termination obligations; and
• dispute resolution.

The strongest franchise agreements are therefore not necessarily those containing the greatest number of protective provisions. They are those that accurately reflect the commercial bargain and provide practical mechanisms for managing the relationship.

Drafting the Franchise Agreement

Contract drafting remains a core franchise-law skill. But modern drafting increasingly requires lawyers to understand how the contract will operate in practice. For example, a clause requiring a franchisee to maintain brand standards is only useful if the agreement establishes:

• what constitutes a brand standard;
• who determines compliance;
• how breaches are identified;
• whether the franchisee receives an opportunity to remedy the breach;
• what happens if the breach is repeated; and
• when non-compliance can justify termination.

The same applies to territory, development obligations, renewal and termination.

The lawyer must draft for the business relationship that will exist five or 10 years later, not merely for the signing date.

Financing and Investment

Franchise expansion can require substantial capital. The franchisee may need financing for premises, fit-outs, equipment, staff, inventory, technology and marketing. That introduces another layer of legal considerations.

Financiers may want security over assets, receivables or shares. The franchisor may want restrictions on changes in ownership or control. The franchise agreement may need to accommodate lender rights without undermining the franchisor's ability to protect its brand.

This is another area where the franchise lawyer increasingly works alongside corporate and banking specialists. The objective is to ensure that the financing structure and franchise structure do not conflict.

After the Deal: The Lawyer as Long-Term Business Adviser

The franchise relationship does not end when the agreement is signed. In many respects, that is when the most important phase begins.

A franchise can continue for years, expand into new locations and involve significant investment. Legal advice therefore becomes an ongoing business function rather than a one-off transaction.

Compliance and Brand Protection

Franchisors need systems to monitor compliance with contractual and regulatory obligations. The franchise lawyer can help develop mechanisms for:

• compliance audits;
• reporting;
• operational standards;
• IP usage;
• marketing approvals;
• supplier compliance;
• data and technology requirements;
• record keeping; and
• remediation of contractual breaches.

This preventive role can be more valuable than litigation after a relationship has broken down. A strong compliance framework can identify problems before they become disputes.

Dispute Management

Disputes are an inevitable possibility in long-term commercial relationships. Franchise disputes can arise over unpaid fees, territory, performance obligations, supply arrangements, brand standards, intellectual property, renewal, termination or alleged misrepresentation.

The modern franchise lawyer is therefore not simply a litigator who becomes involved after the relationship collapses.

The lawyer can help design the dispute-resolution architecture from the beginning. This includes determining:

• governing law;
• jurisdiction;
• arbitration arrangements;
• escalation procedures;
• mediation;
• interim relief;
• enforcement mechanisms; and
• post-termination remedies.

The goal is not simply to win a dispute. It is to create a system that encourages commercially sensible resolution while preserving effective remedies when necessary.

Renewals and Renegotiation

A franchise agreement that worked well when it was signed may no longer reflect the commercial realities of the business five or 10 years later. Markets evolve, technology advances and consumer behaviour shifts, while regulatory requirements can also change. At the same time, the franchisee's investment may have grown significantly, and the franchisor may have introduced new products, digital platforms or operating standards.

For this reason, renewal should not be treated as a routine administrative exercise. It provides an opportunity for both parties to reassess the relationship and ensure that the contractual framework continues to support their business objectives.

A strategic franchise lawyer can play an important role in this process by reviewing the existing arrangements, identifying provisions that have become outdated and assessing whether the agreement should simply be renewed, renegotiated or fundamentally restructured to reflect the next stage of the franchise's development.

Expansion

Successful franchise relationships often create opportunities for further expansion. A franchisee may seek additional territories. A franchisor may want to introduce new brands. A master franchisee may seek rights to appoint additional operators.

At this point, the lawyer's role again becomes strategic. The legal adviser may help determine:

• whether the existing structure can support expansion;
• whether new entities should be established;
• whether additional IP registrations are required;
• whether regulatory approvals need to be refreshed;
• how development targets should be revised;
• how financing should be structured; and
• whether the original franchise agreement remains commercially appropriate.

The franchise lawyer thus becomes part of the client's growth strategy.

The Rise of Specialist Franchise Practices

These changing responsibilities are also influencing the way legal practices organise their franchise capabilities.

International law firms and specialist legal consultancies increasingly approach franchising as a multidisciplinary practice rather than a narrow contract specialty.

A sophisticated franchise team may combine expertise in:

• commercial contracts;
• corporate and M&A;
• intellectual property;
• competition law;
• real estate;
• employment;
• tax;
• regulatory compliance;
• data protection;
• dispute resolution; and
• cross-border transactions.

This model is particularly relevant to international brands expanding across the Middle East.

A franchise transaction involving several GCC markets may require the legal team to identify differences in ownership rules, licensing, agency structures, IP protection, dispute resolution and sector-specific regulation from one jurisdiction to another.

The client increasingly expects the legal adviser to coordinate those issues rather than simply refer them to separate specialists.

Why the UAE is an Important Test Case

The UAE illustrates why the franchise lawyer's role is changing. The country does not operate under a single standalone federal franchise statute. Instead, franchise relationships can engage multiple areas of law depending on their structure and substance.

Commercial agency legislation can become relevant to certain arrangements, while trademark licensing, corporate structuring and contractual principles can also play important roles.

The Federal Ministry of Economy and Tourism maintains a dedicated framework covering commercial agency legislation, including Federal Law No. 3 of 2022 and related implementing decisions.

This fragmented legal landscape increases the value of advisers who can see the transaction as a whole.

The question is no longer simply whether a franchise agreement is legally enforceable. The more important questions may be:

• What is the relationship legally?
• How should it be structured?
• What regulatory risks does the structure create?
• How should the brand be protected?
• What happens if the relationship succeeds and needs to scale?
• What happens if it fails?
• Those are strategic questions.

The Franchise Lawyer's New Skill Set

The evolution of franchise practice is therefore also changing the skills expected of franchise lawyers. Technical legal knowledge remains essential, but it is no longer sufficient.

The modern franchise lawyer increasingly needs:

Commercial understanding

The lawyer must understand how the franchise makes money, where costs arise and which contractual provisions affect profitability.

Regulatory awareness

A franchise lawyer must identify the regulatory environment affecting the client's particular business model.

IP expertise

The ability to protect and enforce the brand is fundamental to the franchise model.

Negotiation skills

The lawyer must understand the commercial interests of both parties and identify where flexibility can be offered without compromising critical protections.

Cross-border capability

International franchising requires awareness of multiple jurisdictions and the ability to coordinate legal advice across borders.

Dispute-prevention skills

The most effective franchise lawyer is often the one who helps prevent a dispute rather than merely litigating one.

Business judgement

Perhaps most importantly, the lawyer needs to understand when a legal risk is material, when it can be managed and when it should influence the commercial decision itself.

From Legal Cost to Strategic Investment

This evolution also changes the way businesses should view franchise legal advice.

If legal counsel is brought in only to draft the franchise agreement, the client may see the lawyer primarily as a transaction cost.

If counsel is involved in market entry, structuring, IP protection, regulatory due diligence, negotiation, compliance, expansion and dispute prevention, the lawyer becomes part of the investment strategy. That is particularly important for brands entering unfamiliar markets.

The cost of inadequate legal planning can extend far beyond legal fees. It can include loss of territorial rights, damage to the brand, regulatory penalties, stranded investment, disputes with franchisees, difficulties exiting an underperforming market and barriers to future expansion.

Early legal advice can therefore have a direct commercial value.

The Future of Franchise Legal Practice

The franchise lawyer of the future is unlikely to sit at the end of a transaction waiting for a draft agreement to arrive. Instead, the lawyer will increasingly sit alongside the business team from the beginning.

The role will encompass market intelligence, legal structuring, risk assessment, intellectual property, regulatory compliance, negotiation, contract management and long-term growth.

Technology will also accelerate this transformation. Contract analytics, automated compliance monitoring, AI-assisted due diligence and digital contract-management systems may reduce the time spent on routine legal work. That could allow franchise specialists to devote more attention to higher-value questions involving strategy, risk allocation and commercial decision-making.

But technology will not remove the need for judgement. A franchise arrangement is ultimately a long-term relationship between businesses. Its success depends on whether the legal framework reflects commercial reality and can adapt as the relationship evolves.

Conclusion

The franchise lawyer's traditional role was relatively clear: draft the agreement, protect the client and assist if a dispute arose. The new role is considerably broader.

Before the deal, the lawyer helps determine where and how the business should enter the market.

During the deal, the lawyer helps determine how the commercial bargain should be structured and protected.

After the deal, the lawyer helps ensure compliance, manage disputes, facilitate renewal and support expansion. That makes the modern franchise lawyer less of a contract technician and more of a strategic business adviser.

For international brands entering the UAE and wider GCC, that distinction can be decisive. In a market where franchise arrangements may intersect with commercial agency rules, intellectual property law, corporate structures, regulatory requirements and general contractual principles, legal advice cannot be separated neatly from business strategy.

The franchise agreement will remain important. But increasingly, it is only the beginning of the lawyer's job.

Dr Sunil Ambalavelil is the Global Executive Chairman of Kaden Boriss, an international law firm specialising in franchise and business agreements. A seasoned legal adviser, he has advised and supported the international growth of numerous global brands, helping them navigate the legal complexities of cross-border expansion.

International franchising can be one of the fastest ways for a successful brand to enter new markets. A business with an established concept, recognised trade marks and proven operating systems can use local franchise partners to expand without bearing the entire cost of establishing and managing overseas operations. But crossing a border also means crossing into a different legal and regulatory environment.

A franchise structure that works effectively in one jurisdiction may create significant legal, tax or operational risks in another. Differences in foreign investment rules, corporate registration, intellectual property protection, employment legislation, taxation and dispute resolution can all affect the commercial viability of an international franchise.

This makes legal planning a critical part of expansion strategy, particularly for brands moving between the GCC, India, Europe, Asia and North America.

Master Franchise or Area Development Agreement?

One of the first decisions is determining how the international expansion will be structured.

Under a master franchise agreement, the franchisor grants a local or regional partner rights to develop the brand within a defined territory. Depending on the agreement, the master franchisee may operate outlets itself and also have the right to appoint sub-franchisees.

This model can provide rapid expansion while allowing the franchisor to rely on a partner familiar with the local market. However, it also introduces an additional layer of risk because the franchisor may have less direct control over individual franchisees.

An area development agreement, by contrast, generally gives the developer the right to establish a specified number of outlets within a defined territory over an agreed period. The developer does not necessarily receive the same sub-franchising rights associated with a master franchise arrangement.

The choice between the two structures should therefore reflect the franchisor's desired level of control, the size of the territory, the availability of suitable local partners and the regulatory environment.

The agreement should clearly define development milestones, territorial rights, performance requirements, renewal, termination, and consequences of failure to meet development targets.

Local Incorporation Requirements

Entering a foreign market may require the establishment of a local legal entity. Corporate structures vary considerably between jurisdictions. Some markets permit foreign companies to operate directly, while others may require local incorporation, registration or specific licensing arrangements.

For a franchisor, this raises questions about who will own the local entity, whether the foreign parent can hold the required ownership interest, which licences are necessary and whether the franchise activities fall within regulated sectors.

In some cases, the franchisee may establish the local operating company. In others, the franchisor may establish a subsidiary or joint venture.

The corporate structure should be determined before the franchise agreement is finalised because it can affect ownership, taxation, liability, repatriation of profits and regulatory compliance.

Foreign Investment Restrictions

Foreign investment rules can significantly influence the structure of a cross-border franchise. Certain jurisdictions impose restrictions on foreign ownership in particular sectors or require government approval, licensing or registration for foreign investors. Rules can also apply differently depending on whether the business is engaged in retail, education, healthcare, food and beverage, financial services or another regulated activity.

A franchise agreement should therefore not assume that a foreign party can freely acquire or operate a business in the target market.

Legal due diligence should establish whether foreign ownership restrictions apply, whether a local partner is required and whether specific approvals must be obtained before operations begin.

Failure to address these issues early can result in a commercially agreed franchise structure that cannot legally be implemented.

Protecting Intellectual Property Across Borders

For many franchise businesses, intellectual property is the foundation of the entire commercial model. Trademarks, logos, business names, operating manuals, recipes, designs, software, marketing materials and other proprietary systems may all form part of the franchise package.

Intellectual property rights, however, are largely territorial. Registration of a trade mark in the franchisor's home country does not automatically provide equivalent protection elsewhere.

Before entering a new market, the franchisor should therefore assess whether its key trademarks and other relevant intellectual property are protected in the target jurisdiction.

The franchise agreement should also specify ownership of intellectual property, permitted uses, quality-control requirements, restrictions on modification and obligations following termination.

Particular attention should be paid to domain names, social media accounts and local-language versions of trademarks, as these can become valuable commercial assets during expansion.

Tax, Royalties and Repatriation of Profits

The financial structure of a franchise can become complicated once payments cross borders. International franchise arrangements commonly involve initial franchise fees, continuing royalties, marketing contributions, technology fees or other payments. These transactions may trigger local taxes, withholding obligations, value-added or sales taxes and transfer-pricing considerations.

The tax treatment of royalties can differ substantially between jurisdictions. Double taxation treaties may also influence the amount of tax payable and the ability to claim relief.

The parties should therefore establish whether royalties can be paid offshore, what withholding taxes apply and which party bears the associated tax costs.

Tax considerations should be incorporated into the commercial model before the agreement is signed rather than addressed after the franchise becomes operational.

Employment Law Cannot be Exported

A franchisor may have a standard employment model for its home market, but local employment laws will generally govern workers employed in the foreign jurisdiction.

Minimum wages, working hours, leave entitlements, termination procedures, employee benefits, immigration requirements and social security obligations can vary significantly.

A franchisee may also have obligations relating to employee records, workplace policies, recruitment and nationalisation requirements, depending on the jurisdiction.

Franchisors should distinguish between their contractual right to impose brand standards and the franchisee's responsibility as the local employer. Attempting to impose a foreign employment framework without considering mandatory local law can create unnecessary liability.

Data Protection and Customer Information

Digital franchising has made data protection another major cross-border concern. Franchise businesses increasingly collect customer information through websites, loyalty programmes, mobile applications, online ordering platforms and payment systems. That information may move between the franchisee, franchisor and technology providers located in different countries.

Data protection laws differ across jurisdictions, including rules governing consent, transparency, security, retention, individual rights and international data transfers.

A franchise agreement should identify who controls and processes customer data, establish responsibilities for cybersecurity and determine how data may be transferred between the franchisor and franchisee.

This is particularly important where a global brand uses centralised customer databases or technology platforms across several jurisdictions.

Choice of Law and Jurisdiction

A cross-border franchise agreement should clearly establish which law governs the relationship and where disputes will be resolved.

The franchisor may prefer the law of its home jurisdiction, while the franchisee may favour the law of the country where the business operates. However, choosing a foreign governing law does not necessarily override mandatory provisions of the local jurisdiction.

Some countries also impose franchise-specific disclosure or regulatory requirements that cannot simply be excluded through contractual drafting.

The agreement should therefore distinguish between contractual provisions that can be governed by the chosen law and mandatory local rules that may apply regardless of the parties' choice.

Why Arbitration Often Matters

For international franchises, arbitration can provide a neutral mechanism for resolving disputes. Parties may prefer arbitration because it can allow them to select a neutral seat, appoint specialist arbitrators and potentially obtain greater confidentiality than conventional court proceedings. International arbitration may also offer advantages when enforcement is required across borders.

However, an arbitration clause must be carefully drafted. It should address the seat of arbitration, applicable rules, number and appointment of arbitrators, language and scope of disputes covered.

The enforceability of an arbitral award in the relevant jurisdictions should also be considered when selecting the arbitration framework.

Expansion Requires More Than a Strong Brand

International franchising is ultimately a balance between commercial ambition and legal risk. A successful brand entering another country is not simply exporting its products or business model. It is entering a new regulatory ecosystem in which the assumptions underpinning its domestic franchise model may no longer apply.

For businesses expanding between the GCC, India, Europe, Asia and North America, early legal due diligence can help identify restrictions before capital is committed and agreements are signed.

The most effective approach is therefore to treat legal structuring as part of the expansion strategy itself. The franchise model, corporate structure, intellectual property strategy, tax arrangements, employment framework, data architecture and dispute-resolution mechanism should be considered together.

When those issues are addressed at the planning stage, franchisors can enter new markets with greater certainty while giving franchise partners a clearer framework for building the brand locally.

Dr. Sunil Ambalavelil is the Global Executive Chairman of Kaden Boriss, an international law firm specialising in franchise and business agreements. A seasoned legal adviser, he has advised and supported the international growth of numerous global brands, helping them navigate the legal complexities of cross-border expansion.

Employment matters remain one of the most frequently underestimated sources of transactional risk in UAE mergers and acquisitions. They can present significant hidden liabilities in UAE acquisitions, with the treatment differing substantially between share and asset purchases, although the exposure is real under either structure.

Because the UAE labour framework does not provide a clear statutory mechanism for the automatic transfer of employees following a change of ownership, buyers, sellers and their advisers must approach the workforce component of a transaction with particular care. This article outlines four key pillars of employment due diligence in UAE deals: employee transfers, contract review, end-of-service liabilities and compliance risks.

Employee Transfers: Share Deals vs Asset Deals

The structure of a transaction has a decisive effect on how the workforce moves. Under UAE law, employees cannot simply be “transferred” as such; in an asset sale, they must instead be terminated by the transferor and re-hired by the transferee, with end-of-service benefits accruing upon termination. Federal Decree-Law No. 33 of 2021 contains a single reference to employment contracts remaining in place where there is a “change in the form or legal status” of an establishment, obliging the new employer to assume liability for employees. However, this provision is unlikely to apply to a straightforward asset sale given the termination-and-rehire requirement.

In a share purchase, by contrast, the employing entity itself does not change, so employment contracts, seniority and accrued liabilities continue uninterrupted. Accrued gratuity liability therefore transfers to the buyer automatically, meaning every dirham of under-provisioning directly affects the buyer's return. This distinction should shape both the deal structure and pricing mechanism from the outset.

Where employees are re-hired following an asset transfer, due diligence should establish whether any UAE or GCC nationals are among the transferring employees, the applicable notice periods, and whether affected staff wish to be paid their accrued gratuity on transfer or have it rolled over to the new employer. Advisers should also confirm whether employment contracts impose any notification or consultation obligations towards affected employees that must be observed as part of the process.

Reviewing Employment Contracts

A representative sample of employment contracts — not merely template agreements — should be obtained and reviewed against actual practice. The objective is to confirm compliance with UAE labour law and identify potential employee-related liabilities. Contracts should be checked to ensure they are compliant rather than simply assumed to be. Particular attention should be paid to remuneration structures, including basic remuneration, allowances, bonuses and other incentives, together with holiday entitlements and outstanding liabilities owed to staff, since basic salary, rather than gross salary, is the base figure for gratuity calculations.

Due diligence teams should also review documentation issued to employees whose service may have been transferred from a previous entity. Employers must take care when drafting contracts and related documents for transferred employees to avoid inadvertently acknowledging a prior period of service with another employer. UAE labour courts may treat such documents as binding acknowledgements, potentially resulting in a double payment of end-of-service gratuity if the employee has already received their entitlement from the previous employer. This is a narrow but recurring drafting trap in group reorganisations and asset carve-outs.

End-of-Service Liabilities

Gratuity exposure is consistently flagged as one of the largest hidden employment liabilities in UAE deals. Targets may under-provision for gratuity, commonly by calculating liability on total salary rather than basic salary, thereby understating the true exposure. The buyer should require a calculation of the total accrued end-of-service liability across the workforce, as this represents a debt that may be inherited on completion.

The statutory formula is well established: a full-time worker who has completed one year or more of continuous service is entitled to end-of-service benefits calculated on basic wage, at 21 days' pay for each of the first five years of service and 30 days' pay for each subsequent year. Due diligence should verify this calculation methodology line-by-line against payroll records, rather than relying on management-prepared summaries. It should also separately quantify accrued but untaken annual leave for the two-year period preceding any visa cancellation, as this is commonly bundled with — and sometimes omitted from — gratuity provisioning.

Compliance Risks During Acquisitions

Beyond gratuity, a broader compliance sweep should form part of the workstream. Key areas include:

• Disputes and claims: Buyers should request disclosure of employment disputes, MOHRE complaints, and claims involving unpaid wages or wrongful termination. Past disputes may point to systemic HR issues, while pending claims represent quantifiable liabilities. The review should also flag recently terminated employees and any pending employment-related litigation.
• Wage compliance at scale: Non-compliance with wage protection obligations creates exposure that multiplies with headcount. A large workforce with systemic WPS issues therefore carries a materially different risk profile from a small one.
• Visa and sponsorship status: Employee contracts, gratuity obligations, visa sponsorships and pending labour disputes should all be scrutinised, since unaccounted-for end-of-service benefits alone can represent a substantial unforeseen liability.
• Data protection: With the UAE's personal data protection law in force, the target's data-handling practices and privacy policies should be audited to confirm compliance with legal standards and minimise exposure to breaches.
• Regulatory currency: The Labour Law framework has been amended repeatedly since 2021, including changes to individual dispute procedures and penalties effective from 31 August 2024. Due diligence should therefore confirm that the target's policies and contracts reflect the current law rather than outdated templates.

Practical Recommendations

Buyers should treat the employment workstream as a valuation input rather than a compliance afterthought. Gratuity liabilities should be independently recalculated rather than accepted at face value; contracts should be checked against current legislation rather than assumed to be compliant; and, in asset deals, termination-and-rehire mechanics should be mapped against a realistic timeline well before signing. Appropriate representations, warranties and indemnities addressing undisclosed employment liabilities remain the primary contractual safeguards where residual risk cannot be eliminated through diligence alone.

In the UAE, consumers and social media users can share negative experiences about products and services, but there are legal limits on how such criticism is expressed.

A review can become a legal issue when it moves beyond an assessment of a product, service or customer experience and turns into a personal attack, defamatory allegation or unverified accusation against an individual or business.

The key distinction is generally between genuine, fact-based consumer feedback and statements that unlawfully damage another person’s honour, dignity or reputation.

A customer who says that a restaurant’s service was slow, the food was poor or the price was too high is generally commenting on the service received. However, accusing the owner of fraud, dishonesty or criminal conduct without evidence can create a very different legal position.

When Does a Review Cross the Line?

The nature, content and manner of a publication are important in determining whether a review amounts to legitimate criticism or potentially unlawful defamation.

Legitimate feedback should generally relate to the actual product or service and be based on a genuine experience. Comments should be factual where they present facts, and opinions should not be presented as established facts when they cannot be substantiated.

Problems can arise when a review:

• Makes false or misleading allegations against a person or business
• Accuses someone of fraud or other wrongdoing without evidence
• Attacks an individual's honour, dignity or moral character
• Makes personal comments unrelated to the product or service
• Publishes allegations that cannot be supported by evidence
• Uses social media to deliberately damage someone's reputation

The distinction is particularly important for influencers, who can reach large audiences through videos, posts and reviews.

Earlier this month, an influencer was penalised Dh81,000 after the Abu Dhabi Judicial Department found that a video posted about a well-known restaurant amounted to defamation rather than legitimate criticism.

The criminal court imposed a Dh30,000 fine, ordered the removal of the video and confiscated the mobile phone used to record and publish the content. The defendant was also ordered to pay Dh51,000 in temporary civil compensation.

The case illustrates that the legal consequences of an allegedly defamatory publication can extend beyond a criminal fine.

Criminal and Civil Consequences

Defamation-related conduct can potentially result in both criminal and civil consequences. A criminal fine is a punishment imposed by the court for an offence and is payable to the State. Civil compensation, by contrast, is intended to address the damage suffered by the person or entity affected by the publication.

Depending on the circumstances and the applicable provisions, additional consequences can include imprisonment, confiscation of devices used in committing the offence and, in certain cases involving expatriates, deportation.

The UAE’s cybercrime legislation also provides penalties for certain forms of online defamation and insults. Offences committed through digital platforms can therefore carry significant consequences, particularly where content is published publicly and reaches a large audience.

What About Social Media Reviews?

The risks can be greater when criticism is published on social media because a post, video or comment can be rapidly shared with a large audience.

A consumer does not necessarily lose the right to criticise a business simply because the criticism is negative. However, the language used, the factual basis for the allegation and the identity of the person being targeted can all be relevant.

For example, statements such as “the service was slow”, “the food did not meet my expectations” or “I found the product overpriced” are generally expressions of a customer's experience or opinion.

By contrast, describing a business as a “scam” or accusing its owner of fraud, dishonesty or other criminal behaviour without supporting evidence could expose the person making the statement to legal action.

How Can Consumers and Influencers Stay on the Safe Side?

A practical approach is to keep a review focused on the service or product rather than the individual behind the business.

Consumers and influencers should:

• Describe what they personally experienced
• Distinguish opinions from factual allegations
• Ensure factual claims can be supported with evidence
• Avoid personal insults or attacks on character
• Avoid making accusations of criminal conduct without proof
• Keep comments relevant to the product or service
• Avoid publishing private or unrelated personal information

Records such as receipts, bookings, correspondence, photographs or videos may also help establish the factual basis of a genuine consumer complaint where appropriate.

Freedom of Expression Has Limits

The UAE recognises freedom of expression, but that freedom is subject to legal restrictions designed to protect the reputation, dignity and rights of others.

A negative review is therefore not automatically unlawful simply because it is critical or damaging to a business's reputation. The circumstances surrounding the publication matter.

The safest approach is to criticise the experience, not the person; state facts that can be proved; and avoid allegations that go beyond what the evidence establishes.

For consumers and influencers, the message is straightforward: a poor review is not necessarily defamation, but a review can cross the legal line when criticism becomes a personal attack or an unsupported allegation capable of harming another person's reputation.

Most companies in the UAE are treating electronic invoicing as a finance and IT project. Choose a provider, connect the system, tick the box. That view is too narrow. E-invoicing changes the moment an invoice legally exists, how it reaches the buyer, and what evidence each side holds when a payment goes wrong. All three sit within the commercial contract, not the Enterprise Resource Planning (ERP) system.

The Ministry of Finance issued the UAE Electronic Invoicing Guidelines in February 2026 to support the national rollout, followed by an updated version in June 2026 that added details on record storage, advance payments and retention amounts. Together with Cabinet Decision No. 106 of 2025 and Ministerial Decisions No. 243 and 244 of 2025, the framework is now clear enough for lawyers to work with. The rollout runs in waves: a pilot and voluntary phase from July 2026, mandatory go-live for businesses with revenue of Dh50 million or more from January 1, 2027, smaller businesses from July 2027, and government transactions from October 2027.

The challenge is that many supply, service and construction contracts currently in use were drafted around PDF invoices transmitted by email. Those contractual mechanisms require careful review to ensure they remain effective under the new electronic invoicing framework.

What Actually Changed

Under the new model, an invoice is structured data, not a document. It travels through an Accredited Service Provider (ASP) over the Peppol network to the buyer’s provider, while the tax data is sent to the Federal Tax Authority at the same time. A PDF is no longer a valid tax invoice for transactions in scope. Credit notes follow the same route.

That single change breaks a common assumption in contracts: that an invoice is “delivered” when the buyer’s accounts team receives it and accepts it. In the new system, delivery takes place between service providers automatically, while tax reporting happens whether or not the buyer is satisfied with the amount.

Invoice Approval Timelines

Many contracts state that the payment clock starts on “receipt of a valid invoice”, then allow the buyer 30 days to approve it. Under e-invoicing, that wording creates a gap. The supplier must issue and transmit the invoice within the legal window: for VAT registrants, the timeline set by the VAT law, and in other cases within 14 days of the transaction. The buyer’s internal approval process has no effect on that deadline.

Contracts should therefore separate two ideas that used to be blurred: the date the electronic invoice is validly issued and transmitted, and the date the payment obligation matures. Fix the payment trigger to the transmission confirmation from the supplier’s provider and give the buyer a defined window to raise objections. Also decide, in writing, what happens to the clock when the buyer disputes only part of an invoice.

Supplier Onboarding Duties

A supplier that is not connected cannot bill you compliantly. That is now a contractual risk worth naming.

Onboarding is not something a supplier can hand entirely to its provider. The taxpayer starts the process itself through EmaraTax, and each entity needs its own tax identification number, which becomes its address on the network, including members of a tax group, which use their own number rather than the group representative’s.

Payment terms should therefore require the supplier to appoint an accredited provider, complete onboarding, confirm which implementation wave it falls into, and keep its identification and endpoint details accurate. Add a duty to notify the buyer promptly if it changes provider or suffers a transmission failure. This matters more than it sounds because an invoice sent to an outdated identifier does not bounce back like an email; it simply never arrives, while both sides assume payment is merely slow.

Then deal with mismatches in both directions, including use of the predefined endpoint where the buyer is not yet live, and set an end date for any interim arrangement. Finally, give the clause teeth: no interest on non-compliant invoices, an indemnity for input tax lost through supplier error, and a right to terminate where a supplier remains unconnected beyond its own mandatory date.

VAT Record Obligations

Invoice data and associated records must be retained for the periods set by the tax procedures rules — generally five years after the relevant tax period, with a longer period where a voluntary disclosure is made. The June 2026 guidance took a practical view of the requirement to store records “within the State”: what matters is that records remain intact, retrievable and readable for the authority, rather than the physical location of the server.

Contracts should reflect that. Add retention periods that match the tax rules rather than a generic “keep records for two years” clause, and add cooperation duties: each party helps the other respond to an FTA query, produces transmission evidence on request, and does not delete data before the statutory period ends.

Payment Dispute Evidence

The evidence picture improves, but only if you claim it. Providers keep transaction logs showing unique identifiers, transmission status and routing — separate from the invoice content itself. In a payment dispute, those logs answer the oldest argument in commercial life: “we never received it.”

Build access rights into the contract. Give each party the right to obtain transmission and delivery records from its own provider and share them with the other side. Agree that a transmission confirmation is evidence of delivery, and state clearly that adjustments must be made through an electronic credit note, since there is no provisional or draft invoice category to fall back on.

ERP and Vendor Liability

Finally, look at the contracts with your systems and service providers. If the ERP produces incorrect fields, or the provider fails to transmit on time, the legal obligation still sits with the taxpayer. Negotiate service levels for transmission and reporting, notification duties when transmission fails, audit support, data return on exit, and a fair allocation of any penalties caused by provider error.

Contract reviews can take months. However, businesses should address these changes before mandatory compliance deadlines apply.

Victims of bank scams in the UAE may have legal protection against financial losses arising from unauthorised transactions, cyber-attacks, financial crimes and misuse of their assets or information. UAE banking regulations place significant responsibilities on licensed financial institutions to protect customers, investigate fraud and, in qualifying cases, reimburse losses.

The UAE’s current legal framework combines the Federal Decree-Law No. 6 of 2025 on the Central Bank and Regulation of Financial Institutions and Activities and Insurance Business with the Central Bank of the UAE’s Consumer Protection Regulation and its accompanying Consumer Protection Standards. These rules require financial institutions to maintain appropriate systems to detect and prevent fraud and to protect customers’ funds and information.

The law also treats the unauthorised use or manipulation of electronic payment instruments as a serious criminal offence. Under Article 15 of Federal Decree-Law No. 34 of 2021 on Countering Rumours and Cybercrimes, anyone who forges, clones or copies a credit card, debit card or other electronic payment instrument, or captures its data or information using information technology systems, may face imprisonment and a fine of between Dh200,000 and Dh2 million.

The same penalties can apply to those who create or design information technology tools or software intended to facilitate such offences, use a payment instrument or its information without authorisation to obtain another person’s funds or property, or knowingly accept forged, copied or illegally obtained payment instruments or data.

However, criminal liability for the scammer is only one part of the legal protection available to a victim. The Central Bank’s Consumer Protection Standards impose specific obligations on licensed financial institutions in relation to fraud and unauthorised transactions.

Financial institutions are required to have adequate systems and processes to monitor and respond to external fraud and must provide customers with procedures for reporting theft, loss and fraud. They must also maintain appropriate security and protection systems and continuously develop their cybersecurity measures to respond to evolving threats.

Importantly, the Consumer Protection Standards provide that licensed financial institutions must compensate consumers in a timely manner for financial losses and expenses resulting from financial crimes, misappropriation, cyber-attacks and misuse of assets and information, unless it can be proven that the loss resulted from the customer’s gross negligence or fraudulent behaviour.

There is also a specific requirement concerning unauthorised payments. Once an unauthorised transaction is reported, the financial institution must document the report, including the date and time it was received, inform the customer about options to block or close the affected account, card or digital payment instrument, and take appropriate steps to prevent further unauthorised transactions.

Under the current standards, unauthorised payments must generally be reimbursed after the investigation is completed or within 30 calendar days from the date the matter was first reported by the customer or identified by the financial institution, whichever is earlier. This reimbursement requirement does not apply where there is evidence that the customer acted fraudulently or with gross negligence.

This means that a customer who discovers suspicious withdrawals, card payments, online transfers or other transactions should not delay reporting them to the bank. Prompt notification creates a formal record of when the unauthorised activity was reported and enables the bank to take steps to prevent further losses.

Customers should also preserve all relevant evidence. This may include transaction records, bank statements, SMS or email alerts, screenshots, details of suspicious websites or communications, telephone numbers used by scammers and copies of correspondence with the bank. Such evidence can be important in establishing that the transaction was not authorised and that the customer did not act fraudulently or with gross negligence.

The fact that a customer was deceived by a scam does not automatically mean that the bank is liable in every case. The circumstances surrounding the transaction remain important. Where the evidence shows that the customer acted fraudulently or with gross negligence, the regulatory protection concerning reimbursement may not apply.

At the same time, financial institutions cannot simply disregard a customer’s complaint. The Central Bank framework requires banks and other licensed financial institutions to maintain complaint-handling procedures and investigate customer complaints. Under the current framework, a financial institution must provide a written final response to a complaint within the applicable period, giving reasons for its decision and explaining the available escalation process where the customer remains dissatisfied.

The UAE’s banking framework has also strengthened the role of Sanadak, the independent financial-sector complaints resolution mechanism established by the Central Bank. Customers who are dissatisfied with the outcome of a complaint can use the external complaints-resolution process after approaching the relevant financial institution.

A person who falls victim to a bank scam should therefore act quickly. The first step is to notify the bank immediately through its official fraud-reporting channel and request that the affected account, card or digital payment instrument be blocked or secured. The customer should then submit a formal complaint and retain confirmation of the report.

Where a criminal offence is suspected, the victim should also report the matter to the police and provide details of the transactions and supporting evidence. The criminal investigation and the bank’s internal investigation may proceed separately, and providing complete information can assist both processes.

If the bank rejects the claim, fails to resolve the matter satisfactorily or does not provide an adequate explanation, the customer can escalate the complaint through the UAE’s financial complaints-resolution framework, including Sanadak where applicable.

The UAE’s legal framework therefore does not leave victims of electronic banking fraud without protection. Banks have statutory and regulatory responsibilities to maintain secure systems, detect fraud, protect customer assets and respond to unauthorised transactions. Where a loss results from a financial crime, cyber-attack or misuse of customer information and there is no evidence of fraud or gross negligence by the customer, the applicable Central Bank standards can provide a basis for reimbursement.

For anyone who discovers an unexpected transaction, the most important steps are to report it immediately, secure the account, preserve evidence, file a formal complaint and pursue the available escalation mechanisms if the matter is not resolved.