Key Changes in the UAE for 2025: A Game Plan for Growth and Innovation

As 2025 begins, the UAE is introducing a series of transformative laws and regulations that showcase the country's unwavering commitment to innovation, sustainability and progress. These changes encompass key areas such as corporate governance, environmental protection, healthcare, transportation, and personal rights. From driving greater gender diversity in corporate leadership to tackling plastic pollution and overhauling traffic regulations, these reforms are set to redefine how the UAE functions. Whether you're a business owner, resident, or visitor, the impact of these changes will be felt across every aspect of life in the UAE.

Read on to explore these landmark developments and how they will shape the UAE in the year ahead.

Corporate governance and gender equality

In a significant move towards gender equality, the UAE is set to require private joint-stock companies to allocate at least one seat for women on their boards of directors by the end of their current board terms. This change, effective from January 2025, reflects the nation's commitment to enhancing gender representation in leadership roles.

This measure builds on the success of previous policies aimed at public joint-stock companies, which have already seen positive outcomes. By increasing the presence of women in decision-making positions, the UAE aims to strengthen corporate governance, foster inclusive growth, and improve institutional performance across various sectors. The policy is in line with the UAE Gender Balance Council’s ambitious target of achieving 30% female representation in leadership positions by 2025, reinforcing the country’s position as a leader in global gender equality.

This reform emphasizes the UAE’s progressive approach to governance and economic development, encouraging private companies to embrace diversity and align with global best practices. As businesses plan for this shift, they should consider how to integrate gender balance into their board restructuring plans. The change is an opportunity to not only enhance company performance but also contribute to a broader national goal of empowering women in the workforce.

Environmental Protection & Sustainability

The UAE is taking significant steps to combat plastic pollution with a nationwide ban on single-use plastics. The ban focuses on items like plastic bags, cutlery, straws and Styrofoam products. Businesses found in violation of these rules will face penalties ranging from AED 500 to AED 50,000, depending on the severity of the violation.

Dubai has already implemented the first phase of this ban, prohibiting Styrofoam products and plastic bags. By 2026, this will extend to plastic cups, lids, food containers, and cutlery.

This initiative aligns with the UAE’s broader sustainability goals, with a particular emphasis on reducing waste and promoting eco-friendly alternatives. To support businesses in this transition, the government is offering tax rebates and grants. This combined approach, punitive measures along with incentives, aims to achieve environmental goals without placing undue financial strain on businesses.

Dubai has long been a leader in the region when it comes to environmental sustainability, and this move to ban single-use plastics is another milestone in its efforts to encourage more sustainable practices. The city’s role as a business hub makes it a prime candidate for setting the tone in the region for sustainability efforts, pushing both local businesses and international corporations to consider greener solutions.

Through these efforts, the UAE hopes to significantly reduce plastic waste, encourage sustainable production methods, and make eco-friendly alternatives the new standard. The progress made in Dubai could act as a model for the rest of the nation as they move toward the broader goal of creating a more sustainable future.

Traffic & Transport Reforms

The UAE is set to implement a significant overhaul of its Federal Traffic Law on March 29, 2025, with a focus on modernizing the transportation system and prioritizing safety. One of the key changes is lowering the minimum driving age to 17, aiming to encourage younger, responsible drivers on the roads.

The law introduces tougher penalties for serious violations, such as driving under the influence and hit-and-run incidents. Additionally, there will be stricter regulations on noise pollution, with a ban on vehicles emitting excessive noise and restrictions on honking within city limits. The new law also ensures pedestrian safety by prohibiting crossing on roads with speed limits above 80 km/h.

In terms of transportation infrastructure, Dubai’s Salik toll charges will see new rates: AED 6 during peak hours and AED 4 during off-peak hours, with free passage between 1 AM and 6 AM. The introduction of new parking charges will also reflect this shift, with premium parking at AED 6 per hour and standard parking at AED 4 per hour during peak hours.

These measures align with the UAE's vision to enhance road safety, manage traffic flow effectively, and keep pace with evolving global transportation trends. With increased penalties and updated regulations, these reforms aim to ensure a safer, quieter, and more pedestrian-friendly environment.

Innovation in Urban Mobility

The UAE is preparing to launch air taxis this year, signalling a new chapter in urban transportation. This initiative requires the creation of a comprehensive insurance framework to address liabilities for operators, manufacturers, passengers, and third parties. The government is also developing training programs and licensing requirements for air taxi operators while ensuring the safe integration of these vehicles into existing aviation activities. Additionally, clear guidelines for low-altitude airspace management will be critical to prevent conflicts with traditional air traffic, aligning with the UAE's sustainability goals.

Healthcare & Insurance Reforms

Starting January 1, 2025, basic health insurance became mandatory for private sector employees and domestic workers across the Northern Emirates, including Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah. The basic health insurance package, priced at AED 320 annually, offers coverage for two years. If an employee’s visa is cancelled during the second year, the premium will be refunded. This reform is a significant step in improving healthcare access for all workers, benefiting both residents and businesses by ensuring a healthier, more productive workforce.

Emiratisation & Workforce Development

The UAE continues to focus on increasing local talent in the private sector. Companies with 50 or more employees must reach a 7% Emiratisation rate by June 2025, increasing to 8% by the end of the year. Smaller businesses with 20-49 employees across 14 key sectors are required to have at least one Emirati in a skilled position. These updated targets highlight the country’s commitment to workforce development and sustainability. Companies failing to meet these targets will face penalties starting from AED 96,000 per unappointed Emirati worker, reinforcing the urgency of compliance.

Real Estate & Rental Market

Dubai's real estate market has taken a major step forward with the introduction of the Smart Rental Index 2025 by the Dubai Land Department. This system uses real estate analytics and market data to standardise rental pricing across the emirate. By offering data-driven insights, the index ensures fair rental values and enhances transparency for both tenants and landlords.

The Smart Rental Index is expected to positively impact both short-term rentals, projected to rise by 18%, and long-term leases, which are anticipated to increase by 13%. This initiative aligns with Dubai’s goal to create a more balanced, sustainable rental market.

Personal Status Law Reforms

The UAE’s Federal Decree-Law No. 41 of 2024, effective from April 15, 2025, introduces major reforms to family law, including child custody, marriage, and divorce regulations. Key updates include extending mothers' custody rights until children turn 18, allowing children aged 15 and above to choose their custodian, and requiring judicial approval for marriages with an age gap of 30 years or more.?

The law also offers expatriate Muslims the option to apply their home country’s laws for personal matters. It introduces stricter penalties for offences such as child abuse and unauthorised travel with children. The law further modernises travel rights, enabling either parent to travel with their child for up to 60 days annually, subject to conditions.

Conclusion

As the UAE continues to embrace transformative reforms, these initiatives will play a pivotal role in enhancing the nation’s global competitiveness and future readiness. From fostering innovation to promoting sustainability and social equity, these changes position the UAE as a dynamic hub for growth and opportunity. At Vista Corporate Group, we are ready to help you capitalise on these advancements. Whether it's business setup, real estate, finance services, or networking opportunities, we provide the expertise to ensure your success in this ever-evolving landscape.