March 31, 2025 marks the first day of implementing the UAE's mandatory and suspensory new Competition Law regime, which entered into force in 2023 and was supplemented by a Ministerial Decree earlier this year. As of today, "Economic Concentrations" with a nexus to the UAE will be required to file a merger control notification when exceeding either the market share threshold or a new turnover threshold. In that case, parties will be prohibited from closing a transaction without the prior clearance of the Ministry of Economy's Competition Department.
See our previous update on this here: UAE issues new Competition Law with new merger control regime | White & Case LLP.
Under Federal Decree Law No. 36 of 2023 Regulating Competition (the "New Competition Law"), any transaction that constitutes an "Economic Concentration"1 must be notified to the UAE Ministry of Economy if the parties' turnover or market share in the UAE exceeds certain thresholds, which were not specified. On 20 January 2025, the UAE Cabinet of Ministers issued Ministerial Decree No. 3 of 2025 (the "Decree") setting out the specific threshold amounts, which was published in the Official Gazette on 30 January 2025. The Decree is set to come into effect 60 days later, which is today, on 31 March 2025. However, it is important to note that the implementing regulations for the New Competition Law have not been issued yet, and the regulations under Decree 37 of 2014 remain in place.
This new merger control regime highlights the need to consult with antitrust counsel early in the transaction process. As scrutiny of M&A activity in the UAE is expected to rise, it is important to plan for compliance to mitigate any risks of delays to the transaction timeline.
Notification Thresholds
The Decree establishes two alternative thresholds for triggering a mandatory merger control filing requirement for Economic Concentration transactions. A filing is required if either of the following thresholds are met:
- Turnover Threshold: Where the total annual sales of the parties in the "Relevant Market" in the UAE exceeds AED 300 million during the latest fiscal year (approximately USD 81.6 million); or
- Market Share Threshold: Where the total market share of the parties exceeds 40% of the total sales in the "Relevant Market" in the UAE during the last fiscal year.2
The New Competition Law defines the Relevant Market based on the following two elements:
- The "Relevant Product Market," which is comprised of products or services that, by virtue of their price, characteristics and intended use, are considered interchangeable to meet a particular need of the consumer; and
- The "Relevant Geographic Market," which constitutes the physical or digital place where supply and demand for products or services converge, and where competition conditions are similar or homogeneous.
Dominant Position Threshold
In addition to providing the merger filing notification thresholds, the Decree establishes the relevant threshold for finding that a company holds a "dominant position" in the market. The Decree provides that a dominant position exists when a business holds a market share exceeding 40% of the total sales in the Relevant Market, whether acting alone or with other businesses.3 While holding a dominant position is not prohibited, a person with a dominant position is restricted from undertaking certain practices that are likely to result in anticompetitive harm.
Conclusion
The introduction of a turnover threshold in the UAE under the New Competition Law represents a significant shift from the previous merger control regime, where filings were required only when the parties exceeded the market share threshold. This brings the UAE competition regime closer to international practices as it provides businesses with greater certainty when assessing their notification obligations.
Although a turnover threshold typically results in more transactions requiring notification, the language of the UAE threshold suggests it will only apply to transactions where there is a potential relevant market in the UAE, which should limit the number of filings for deals that are unlikely to have a local nexus to the UAE. However, it remains to be seen how these thresholds will be applied in practice. Moreover, any assessment of the thresholds must also consider the implementing regulations and other pending decrees (e.g., regarding the scope of exemptions), which have not been issued yet.
Companies contemplating mergers or acquisitions involving entities with revenues in the UAE are advised to consider the potential implications of these new developments, including to:
- Review their UAE market presence against both thresholds;
- Consider the timing of the merger control process as it relates to the transaction timeline (and prepare accordingly); and
- Seek legal advice to consider the potential implications of the new thresholds on the transaction.
*Elinda Karpoutzoglou (Legal Trainee, White & Case) contributed to the development of this publication.
1 An "Economic Concentration" is "any action that leads to the full or partial transfer (merger or acquisition) of ownership or usage rights in properties, rights, stocks, shares, or obligations of an establishment to another," and which results in the "direct or indirect control" over the establishment. See Federal Decree Law No. 36 of 2023, Article 1.
2 Ministerial Decree No. 3 of 2025, Article 3.
3 Ministerial Decree No. 3 of 2025, Article 3.
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