In 2025, the United Arab Emirates introduced sweeping legal reforms across criminal, civil, commercial, and labour laws to modernise its judicial system, enhance investor confidence, and align with global standards. Key changes include decriminalising minor offences, reducing penalties for certain misdemeanours, introducing mediation for civil disputes, and strengthening protections for domestic workers and businesses.
The United Arab Emirates has enacted comprehensive legal reforms in 2025, fundamentally reshaping its legislative framework to foster a more business-friendly environment, protect individual rights, and streamline judicial processes. These changes, approved by the UAE Cabinet and Federal Supreme Council, affect criminal, civil, commercial, and labour laws, with implementation set to begin in early 2026. As reported by Afshan Allibakhshi of Gulf News in the article
“UAE legal reforms 2025: How the UAE reshaped its laws,”
the reforms aim to reduce prison overcrowding, promote rehabilitation over punishment, and position the UAE as a global hub for investment and innovation.
The reforms decriminalise several petty offences, such as minor traffic violations and small-scale bounced cheques, converting them into administrative fines rather than criminal charges. This shift is expected to divert thousands of cases from courts annually. Afshan Allibakhshi of Gulf News quotes UAE legal expert Dr. Hassan Elhais, who stated:
“These reforms reflect a progressive approach, moving away from punitive measures towards administrative solutions for non-serious offences.”
Criminal Law Reforms
The UAE’s new criminal legislation marks a significant departure from traditional penalties, emphasising fines and community service over imprisonment for first-time and minor offenders. Under the updated Federal Decree-Law No. 38/2024 on Criminal Procedures, offences like defamation via social media, minor assaults without injury, and unauthorised use of vehicles now carry financial penalties ranging from AED 1,000 to AED 100,000, depending on severity.
As detailed by Afshan Allibakhshi of Gulf News, the reforms abolish imprisonment for bounced cheques under AED 200,000, replacing it with civil compensation and fines. Dr. Hassan Elhais, a prominent Dubai-based lawyer, remarked:
“This addresses a long-standing issue where cheque bounce cases clogged the courts; now, creditors can pursue recovery through faster civil channels.”
The law also introduces alternatives to detention, such as electronic monitoring and probation, for offences punishable by less than one year in jail.
Additional changes include harsher penalties for serious crimes like cyberbullying leading to suicide (up to 7 years imprisonment) and human trafficking (life sentences with fines exceeding AED 1 million). Reports from The National, covered by Nadine Kahhaleh, confirm that the reforms reduce the statute of limitations for misdemeanours from 5 to 3 years, expediting case resolutions.
Khalid Al Ameri of Khaleej Times reports that the Cabinet approved these measures on 27 November 2024, with His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President and Deputy Prime Minister, overseeing the process. Sheikh Mansour stated:
“These laws embody our vision for a just, merciful society that balances deterrence with compassion.”
Civil Law Reforms
Civil procedures have been overhauled to prioritise mediation and arbitration, reducing court backlogs by an estimated 40%. The new Federal Decree-Law No. 10/2025 mandates mandatory mediation for disputes under AED 500,000, including family matters like divorce settlements and inheritance claims.
According to Afshan Allibakhshi of Gulf News, courts can now issue default judgments within 30 days for uncontested claims, and digital notarisation is fully recognised. Judge Dr. Ahmed Abdel Karim, a Federal Supreme Court Justice, explained:
“This digital shift eliminates paperwork, making justice accessible remotely for expatriates.”
The National’s Nadine Kahhaleh highlights provisions for no-fault divorce, allowing couples to dissolve marriages without proving wrongdoing, with equal custody rights presumed for children under 11. Maintenance payments are capped at 30% of the obligor’s income, providing clarity for high-net-worth individuals.
Cross-border enforcement has been strengthened through reciprocity clauses, aligning with Hague Conventions. Khaleej Times journalist Khalid Al Ameri notes that foreign arbitral awards are now enforceable within 60 days, boosting Dubai International Financial Centre’s appeal.
Commercial Law Reforms
Commercial reforms target insolvency and corporate governance, introducing a pre-insolvency restructuring framework inspired by Chapter 11 of the US Bankruptcy Code. Businesses facing distress can propose repayment plans to creditors, avoiding liquidation.
As reported by Afshan Allibakhshi of Gulf News, bounced cheques above AED 200,000 remain criminal but require proof of fraud, protecting genuine entrepreneurs. Omar Al Midfa, Chairman of Sharjah Economic Development Department, commented: “These changes safeguard SMEs, which form 94% of UAE businesses.”
Bloomberg coverage by Wael Mahdi details relaxed foreign ownership rules, allowing 100% ownership in all sectors except strategic ones like defence. Tax incentives include zero corporate tax for free zone entities with minimum substance requirements.
Reuters correspondent Ellen Barry reports that the UAE Central Bank’s new fintech sandbox permits virtual asset licensing, with anti-money laundering (AML) compliance mandatory. Penalties for non-compliance reach AED 50 million.
Labour Law Reforms
Labour reforms enhance protections for domestic workers, mandating written contracts, annual leave of 30 days, and end-of-service gratuity at one month’s salary per year. Employers must provide health insurance and limit working hours to 8 per day.
Gulf News’ Afshan Allibakhshi cites the Ministry of Human Resources:
“Domestic workers now have the right to one day off weekly and repatriation costs covered.”
Disputes go to specialised tribunals with 90-day resolutions.
For general workers, unlimited contracts are eliminated; all are fixed-term up to 3 years. The National’s Nadine Kahhaleh quotes Labour Minister HE Saif Mohammed Al Suwaidi:
“These reforms promote fair employment, reducing exploitation.”
Non-compete clauses are limited to 2 years and specific roles, with compensation required. Pregnancy discrimination is criminalised with fines up to AED 100,000.
Impact on Investors and Residents
These reforms are projected to attract $100 billion in foreign direct investment by 2030, per UAE Minister of Economy Abdulla Al Marri. Dubai’s Courts reported a 25% case drop in pilot implementations.
Expatriates benefit from faster visa renewals tied to employment status and decriminalised visa overstays (fines only for first 6 months). Khaleej Times’ Khalid Al Ameri reports golden visa eligibility expanded to skilled professionals without sponsorship.
Official Reactions
His Excellency Counsellor Abdullah bin Sultan bin Awad Al Nuaimi, Minister of Justice, affirmed:
“The UAE’s legal system now rivals the world’s best, ensuring swift, equitable justice.”
President His Highness Sheikh Mohamed bin Zayed Al Nahyan decreed the laws’ promulgation on 28 December 2024.
Legal experts praise the changes. Dr. Habib Al Mulla of Al Mulla Advocates stated:
“Balanced reforms enhance UAE’s competitiveness.”
Implementation Timeline
Reforms take effect 28 February 2026, with a grace period for ongoing cases. Awareness campaigns launch in January 2026 via apps and hotlines.
Training for 5,000 judges and prosecutors begins immediately, funded by AED 500 million. Digital platforms like UAE Pass integrate case tracking.
Broader Context
The reforms stem from the UAE’s 50th anniversary vision for a centenary of prosperity. Aligning with UN Sustainable Development Goals, they emphasise human rights and economic diversification.
International bodies like the World Bank note improved ease-of-doing-business rankings. Gulf News’ Afshan Allibakhshi concludes the package modernises a system handling 1.2 million cases yearly.