The United Arab Emirates (“UAE”) has significantly reformed its merger control regime under Federal Decree-Law No. 36 of 2023 (the “Competition Law“). Further details regarding thresholds for merger control notifications are outlined in Cabinet Resolution No. (3) of 2025 which was issued on 20 January 2025. These reforms, which will go into effect on 31 March, 2025, aim to align with international best practices by introducing a turnover-based threshold alongside the existing market share threshold. However, the full framework has yet to materialize as the highly anticipated Competition Law Implementing Regulations are still forthcoming.

1. Thresholds for Definitive Notification

Before these reforms, companies lacked clear objective criteria for obligatory merger notices. Article 3 of Cabinet Resolution No. (3) of 2025 establishes two alternative financial thresholds, which if are reached, would trigger a mandatory economic concentration application, these are as follows:

• Turnover Threshold: when the combined annual turnover of the parties in the UAE exceeds AED 300 million (approximately USD 81.7 million) in the last financial year; OR
• Market Share Threshold: if the parties’ combined market share in the target market in the UAE exceeds 40%.

These thresholds provide clearer parameters for companies to determine whether their transactions require merger control notification in the UAE.

2. Definition of Economic Concentration and Scope of Application

The term “Economic Concentration” in the Competition Law encompasses mergers, acquisitions, and joint ventures where one party gains control over another. There are lingering questions regarding the treatment of joint ventures, especially non-full-functional joint ventures and minority shareholdings. Greater clarity is anticipated in the forthcoming Implementing Regulations, expected to be published by the end of February 2025.

Importantly, the law governs not only transactions within the UAE but also those conducted outside of the UAE that impact domestic competition. This extraterritorial jurisdiction aligns with international regulatory standards and underscores the UAE’s commitment to fostering competitive market conditions.

3. Timelines for Compliance and Approval Process

A key procedural reform is the extension of the notification period. Parties meeting (i) the definition of Economic Concentration; and (ii) crossing one of the established financial thresholds, must notify the UAE Ministry of Economy (“MoE”) at least 90 days prior to closing the deal, an increase from the previous 30-day requirement. This extended review period indicates the regulator’s preference for thorough merger control scrutiny before clearing transactions.

The review process involves several steps:

• Document Collection and Attestation: Gather all required documents and have them attested by the UAE Ministry of Foreign Affairs if issued outside the UAE.
• Submission of Original Documents: Submit the complete and attested original documents to the MoE.
• The Competition Regulatory Committee Review: The Competition Regulatory Committee, which is tasked by the MoE to review all submission, will review the application and ancillary documents to ensure completeness, and notify the applicant in writing if all documents are in order.
• Triggering the 90-Day Review Period: The legislative 90-day review and approval period begins upon receipt of the written notice from the Ministry.
• Follow-up: 2 – 4 weeks after submission, the MoE may request further documents or information from the parties with respect to the submission. The 90-day review period is tolled until the MoE receives the requested documents or information.
• Publication Phase: Upon concluding its requests from the parties, the MoE may request third party opinion by publishing the transaction for a specific time (which will be determined in the Implementing Regulations).
• Recommendation: the Competition Regulatory Committee then submits its recommendation to the Minister of Economy.
• Approval, Conditional Approval, or Rejection: Upon receipt of the recommendation from the Competition Regulatory Committee, the Minister can choose to (i) approve; (ii) conditionally approve; or (iii) reject the economic concentration application.

4. Stricter Penalties for Non-Compliance

Companies should be aware of the new penalties for non-compliance (gun-jumping), which include:

• Fines ranging from 2% to 10% of the annual revenue of the product or service concerned in the UAE.

These stringent penalties demonstrate the UAE’s commitment to enforcing compliance and deterring parties from closing their transaction without obtaining merger control clearance from the UAE.

5. Impact on Businesses and M&A Transactions

Under the new regulatory framework, companies engaging in or in the midst of mergers, acquisitions, and joint ventures in the UAE must proactively assess their compliance obligations:

• Evaluate their market presence in the UAE to determine if they exceed the turnover or market share thresholds necessitating a filing.
• Engage early with regulators given the 90-day notification period to avoid delays in deal closure.
• Note that previous sectoral exemptions have been eliminated, and further guidance on industry-specific exemptions is pending in the Implementing Regulations.

Looking Ahead

The introduction of the turnover threshold updates UAE competition law to reflect the best international and regional practices, providing businesses with greater certainty regarding their merger notification requirements.

The Implementing Regulations, expected to be released in the next few weeks, will clarify crucial aspects of the new competition law regime, including guidance on joint ventures, methodologies for defining relevant markets, and procedural standards for merger filings.

Swift compliance with these issued and forthcoming regulations will be critical for companies to navigate deal structuring and regulatory obligations effectively, minimizing potential risks and facilitating smooth transaction approvals.

Most importantly, parties in the midst of transactions that cannot close prior to 31 March 2025 would be subject to the new turnover financial threshold and as such would be required to obtain clearance from the MoE prior to finalizing closing of the transaction.

GLA Can Help

With our exceptional Anti-trust and Competition practice, which has been leading the way in the region, and our great personal relationships with the regulators, GLA provides top-tier legal services by properly assessing transactions under the competition regimes and successfully navigating an economic concentration filing with ease.

For more information please reach out to Asad Ahmad our Anti-Trust and Competition Head at asad.ahmad@glaco.com.

Authors: Alex Saleh, Managing Partner, Asad Ahmad, Head of Anti-Trust & Competition and Khaled Abu-Orabi, Senior Associate.