Attracting Global Investors Through Legal Modernisation: The UAE Model

The United Arab Emirates has in recent years remade much of the legal scaffolding that underpins its economy -- and the result is a clearer, more investor-friendly market that increasingly looks like a global template for legal modernisation. By combining amendments to company law, a strengthened insolvency framework, and the growth of specialist financial courts and free-zone dispute mechanisms, the UAE has sent a consistent message: legal certainty and efficient dispute resolution are central to attracting long-term foreign capital.

 

Central to that message was the liberalisation of foreign ownership rules. Since the federal and emirate-level reforms that began in 2020 and were subsequently codified, many mainland activities now permit 100 per cent foreign ownership -- a seismic shift from prior norms that required local partnership structures. The change reduced structural barriers for inbound investors and simplified market entry for strategic projects. 

Equally significant has been the overhaul of the insolvency and restructuring regime. Federal Decree-Law No. 51 of 2023, which entered into force on May 1, 2024, modernised bankruptcy procedures, expanded restructuring tools, and aligned the UAE’s framework with international practice. For investors, a clearer, faster and more transparent insolvency process lowers downside risk and increases the predictability of recoveries — a material factor in cross-border investment decisions.

Beyond statutes, institutional reform has amplified confidence. The development of specialist courts -- notably in free zones such as the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) -- has created venues that apply common-law style procedure and are well attuned to complex commercial disputes. These jurisdictions, and ongoing enhancements to court rules and digital case-management systems, give international investors routes to enforce contracts in environments they find familiar. Recent commentary from legal practitioners and judicial forums highlights the UAE’s ambition to be a regional commercial disputes hub. 

Practical regulatory measures in the emirates also complement federal reform. Abu Dhabi’s measures to streamline business registration and reduce friction for non-oil sectors, for example, show how administrative modernisation works hand-in-glove with legal change to reduce time-to-market for investors. Reuters reporting on Abu Dhabi’s initiatives underscores the economic logic: simplify procedures, diversify away from oil, and make doing business easier for investors.

 

Legal modernisation matters most when it is experienced on the ground. “Investors don’t buy statutes on paper -- they buy predictability,” says Sunil Ambalavelil, Chairman of Kaden Borris. “When companies can set up with certainty of ownership, access pragmatic restructuring tools, and have swift dispute-resolution options, the calculus for capital allocation changes. The UAE has been systematic about closing gaps that used to deter institutional capital.” 

Another view from Ambalavelil emphasises the interplay between law and enforcement: “Laws are only as good as the institutions that apply them. Improvements in court procedure and specialised fora are what convert legislative reform into real investor confidence.” These quotations reflect the practical, market-facing lens many advisers now use when evaluating destinations.

 

Risk management and compliance have also become a selling point. The UAE’s commitment to international anti-money-laundering standards and updates to regulatory oversight provide an added layer of assurance for global funds and corporate treasuries that are highly sensitive to reputational and regulatory exposures. As markets sharpen their focus on compliance, jurisdictions that demonstrate credible enforcement attract capital that requires both scale and governance.

 

That said, the UAE’s model is not a finished product. Observers note ongoing work is needed to harmonise free-zone regimes with federal rules, further digitise judicial processes, and ensure smaller overseas investors understand how to use the available legal mechanisms. “The next phase is about accessibility,” Ambalavelil adds. “Make the legal pathways not only robust, but navigable for mid-market investors and SMEs -- and you unlock a broader pool of capital.” 

 

For governments and policy-makers elsewhere, the UAE’s approach offers lessons: liberalise ownership where strategic, modernise insolvency to lower downside risk, build specialist courts that speak the language of international commerce, and pair legal reform with administrative simplification. When these elements align, the jurisdiction gains a competitive edge -- not just in headline FDI statistics, but in the depth and quality of capital attracted.

 

In short, the UAE demonstrates that legal modernisation is a market-making exercise. The reforms have not only opened doors; they have begun to change investor behaviour -- shifting portfolios toward longer-term, higher-value commitments in the Gulf. If the aim is to convert legal reform into sustained investment, the UAE’s next task will be to ensure that reforms are accessible, consistently enforced, and widely understood by the global investor community.

 

 

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