Legal Framework for Special-Purpose Acquisition Companies (SPAC) and Their Economic Effects on the Financial Market

Abstract

One of the recent legislative amendments in the United Arab Emirates is to allow forming Special-Purpose Acquisition Companies (SPAC), which contributes to enhancing the investment environment in the country and gives other companies the ability to combine their business with this type of companies. SPACs are established to invest in the capital market with the purpose of acquiring other companies and make their shares available to investors. This study aims to clarify the legal framework regulating these companies in the United Arab Emirates, according to the Federal Decree-Law No. 32 of 2021 on commercial companies and the decision issued by the Board of Directors of the Securities and Commodities Authority No (1/TM) of 2022 on the Regulations on Special Purpose Acquisition Companies (SPACs). This study also discusses the economic effects of these companies on the financial markets and concludes with a set of results and recommendations.