To buy a company in the UAE, you choose how to structure the deal, check the business carefully, sign a sale agreement, and complete the purchase. Buying a company is called an acquisition, and there are two main ways to do it: buy the company's shares, or buy only its assets.

The process usually starts when you find a target and sign a confidentiality agreement. You then agree the main terms and carry out due diligence, a deep check of the company's contracts, debts, and risks. After that, lawyers negotiate the sale agreement, which protects you with warranties and indemnities. Finally, you get any approvals needed and complete the deal. A 2021 reform now allows full foreign ownership for many businesses.

Salha Al Basti Advocates, a Dubai firm with over 35 years of experience, guides clients on how to buy a company in the UAE.

How do you buy a company in the UAE: share or asset purchase?

Before buying a company, you must decide how to structure the deal. There are two main ways, and the choice affects your risk and tax. The first is a share purchase, where you buy the company's shares and take the whole business as it is.

This means you also take on its debts, contracts, and history, so a corporate review is essential. The second is an asset purchase, where you buy only the parts you want, such as equipment, stock, or a brand. This lets you leave unwanted debts behind. Most acquisitions are part of a wider merger and acquisition process. For example, an asset deal can protect a buyer from a target's hidden liabilities. Choose between a share purchase, which takes the whole company, and an asset purchase, which takes only chosen parts.

Step 1: Find a target and sign an NDA

The first practical step is to find the right company to buy. You might look in your own industry, use a broker, or approach a business directly. Once you find a target, you make contact to explore the deal.

Before the seller shares any private information, both sides should sign a non-disclosure agreement, or NDA. This keeps the talks and the company's sensitive data confidential. Protecting this information matters, because it often includes commercial contracts, financials, and trade secrets. An NDA builds trust and protects both sides if the deal does not go ahead. For example, an NDA stops a buyer from using a seller's secrets if talks fail. Start by finding a target and signing an NDA, so private information stays protected during talks.

Step 2: Agree a term sheet and run due diligence

With an NDA in place, you move to the heart of the deal. First, the two sides agree a term sheet, also called heads of terms. This short document outlines the price, the structure, and the main terms before the full contract is written.

Next comes due diligence, the most important part of buying a company. Your lawyers and accountants carefully check the target's contracts, debts, ownership, and records. They look for any ongoing litigation, confirm the company owns its intellectual property, and review any real estate it holds. The goal is to find hidden risks before you buy. For example, due diligence might reveal a major lawsuit that lowers the price. Agree a term sheet, then run thorough due diligence to uncover any hidden risks before you commit.

Step 3: Negotiate the sale agreement and protections

After due diligence, the lawyers prepare the main contract. For a share deal this is a share purchase agreement, and for an asset deal an asset purchase agreement, both often called the SPA. This contract sets the final price, the terms, and what each side must do.

A key part is protecting you, the buyer. The seller usually gives warranties, which are formal promises that the business is as described. They may also give indemnities, which cover specific known risks. If a warranty turns out to be false, you may have a civil claim against the seller. The contract also makes sure any of the target's debts are dealt with before closing. For example, a strong warranty can protect you if a hidden problem appears later. The sale agreement sets the price and protects the buyer through warranties and indemnities.

Step 4: Get approvals and complete the purchase

The final stage is to get any approvals and close the deal. Some purchases need official approval before they can go ahead. Large deals may require competition or merger-control clearance, and certain sectors or foreign-ownership rules can add steps.

A 2021 reform now allows full foreign ownership for many mainland activities, though the exact rules depend on the business. Once conditions are met, you sign and complete, which means paying the price and transferring the shares or assets. You then update the official records, such as the trade license and shareholder register. If you are buying a struggling business, the deal may also involve bankruptcy issues. For example, a missed approval can delay or cancel a completion. You get the needed approvals, then sign, pay, transfer ownership, and update the official records to complete the deal.

Why use a lawyer to buy a company?

Buying a company is complex and high-value, so small mistakes can be very costly. Salha Al Basti Advocates brings over 35 years of combined experience to mergers and acquisitions across Dubai and the UAE. Our team of more than 30 legal professionals works in both English and Arabic, which is essential in deals with international buyers and sellers.

We run due diligence, draft and negotiate the sale agreement, and guide you through approvals and closing. We handle every deal with full confidentiality, and we respond to new enquiries within two hours during business hours. We cannot promise a specific outcome, but we work to make your purchase safe and protect your investment.

You can learn more on our about us page, or use our contact us page to book a free consultation. Careful, bilingual guidance helps you buy with confidence.

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