Debt Collection Agency UAE: Federal Law & Free Zone Complexity
Debt Collection Agency UAE: Seven Emirates, 40+ Free Zones, One Federal Law
The UAE Complexity
The UAE is not one jurisdiction — it's a federation of seven emirates, each with its own local court system, overlaid with federal law. Add 40+ free zones (each with its own regulatory authority) and the DIFC/ADGM common-law courts, and the UAE presents one of the world's most complex jurisdictional landscapes for debt recovery.
A debtor registered in JAFZA (Jebel Ali Free Zone) is subject to different regulations than a debtor on the Dubai mainland. A debtor in Abu Dhabi follows ADGM courts if registered there, or Abu Dhabi Judicial Department courts if onshore. Getting the jurisdiction right is not administrative detail — it determines which court has authority, which procedures apply, and which enforcement mechanisms are available.
Federal Framework
UAE Federal Law No. 18 of 1993 (Commercial Transactions Law) provides the baseline for commercial debt collection across all emirates. Key provisions: commercial limitation period of 10 years, obligation of good faith in commercial dealings, and recognition of commercial custom as a source of law. The UAE Civil Code provides a 15-year limitation for civil claims.
Federal Decree-Law No. 50 of 2022 reformed insolvency proceedings, introducing restructuring options and formal insolvency procedures that affect creditor recovery strategies.
The Collection Process
Phase 1 — Jurisdiction identification. Determine the debtor's registration: mainland company (local court jurisdiction), free zone entity (free zone authority + local courts), or DIFC/ADGM entity (common-law court jurisdiction). This determines everything that follows.
Phase 2 — Formal demand. Notarised legal notice in Arabic (onshore) or English (DIFC/ADGM). The demand must comply with the procedural requirements of the relevant jurisdiction.
Phase 3 — Amicable collection. Resolution rates for UAE commercial debts under 12 months: approximately 55-65%. The UAE's business environment is relationship-driven, but the legal consequences of non-payment are well understood.
Phase 4 — Legal proceedings. Court selection depends on jurisdiction and claim value. Dubai Courts, Abu Dhabi Courts, Sharjah Courts, DIFC Courts, or ADGM Courts — each has distinct procedures, timelines, and filing requirements.
Enforcement Across Emirates
Judgments from one emirate's courts are enforceable in other emirates through the UAE's federal enforcement framework. However, execution requires filing with the enforcement court in the emirate where the debtor's assets are located. Cross-emirate enforcement adds 2-4 weeks to the process but is procedurally straightforward.
Key enforcement tools: bank freezes (nationwide through the UAE Central Bank), travel bans (effective across all UAE borders), commercial licence suspension (through the relevant economic department), and asset seizure.
The UAE rewards jurisdictional precision. An agency that understands the difference between JAFZA and mainland Dubai, between DIFC and onshore courts, and between federal and local procedures recovers significantly more than one that treats the UAE as a single jurisdiction.
