Power of Attorney in the UAE: How Broad Powers Can Create Serious Risks for Property and Shareholders
A Power of Attorney is usually given because there is trust.
A shareholder trusts another shareholder to represent them. A property owner trusts a relative, business partner or adviser to handle a transaction. A businessman who is travelling gives someone authority to deal with government departments, banks or company matters on his behalf.
At the time the POA is signed, there may be no reason to question that trust.
But relationships can change.
Shareholders can fall into disputes. Business partners can separate. Family relationships can deteriorate. A principal may later discover that the person who was once trusted no longer has the same relationship with them.
The problem is that the relationship may change, but the Power of Attorney may still remain in place.
This is why giving a POA should never be treated as a routine formality.
A Power of Attorney is a legal delegation of authority. The principal should know exactly what powers are being given, why those powers are required and whether any of them are unnecessarily broad.
A Power of Attorney Is Only as Safe as the Authority It Gives
Under the UAE's new Civil Transactions Law, which came into force on 1 June 2026, the law adopts a more structured approach to agency and authority.
Federal Decree-Law No. 25 of 2025 distinguishes the scope of a general agency from acts requiring special authority. A general power of attorney is generally directed toward acts of management and preservation, while acts beyond ordinary management—including sales, mortgages, settlements and other disposals—require specific authority.
This distinction is critical.
The principal should not simply look at the title of a document and assume that it is either “safe” because it is called a General POA or “unlimited” because it contains broad wording.
The actual wording of the authority matters.
The question should always be:
What exactly has the principal authorised the attorney to do?
The Biggest Mistake: Giving More Powers Than Necessary
A person may need an attorney to complete one particular transaction.
For example, the attorney may only need to:
submit an application;
attend a government department;
sign a particular document;
complete a specific property transaction;
deal with one company;
represent the principal before a particular authority.
Yet the POA may be drafted much more broadly.
It may contain authority relating to properties, shares, bank accounts, companies, contracts, litigation and other matters that have nothing to do with the transaction for which the attorney was appointed.
That is where unnecessary risk begins.
If the attorney needs one power, there is little reason to give ten.
Property and Shares Require Particular Attention
A principal should be especially careful when a POA relates to valuable assets.
Property and company shares can represent a substantial part of a person's wealth or business interest.
A POA should therefore be carefully reviewed if it contains powers relating to:
selling or transferring real estate;
purchasing property;
mortgaging or creating security over property;
leasing or otherwise dealing with property;
selling or transferring company shares;
acquiring shares;
signing share transfer documents;
dealing with company ownership;
receiving money or sale proceeds;
entering into contracts;
settling claims;
appointing substitute attorneys.
The existence of such wording does not mean that an attorney is automatically entitled to do everything imaginable with the principal's assets. The scope of authority must be determined from the applicable law and, critically, from the actual terms of the POA.
But that is precisely why the principal should not sign such powers casually.
Trust Can Change Between Shareholders
This risk becomes particularly serious in companies.
Imagine two shareholders who have worked together for many years.
One shareholder travels frequently and gives the other a POA to handle company matters.
At the time, this may be entirely reasonable.
Years later, the shareholders have a disagreement over the management of the company, distribution of profits, ownership or a proposed sale.
The relationship has changed.
But the POA may still exist.
The principal may then realise that the attorney has been given authority that goes far beyond the original purpose for which the POA was granted.
This is why a POA should be drafted according to the transaction and authority actually required—not according to the assumption that the relationship will remain friendly forever.
A POA Should Be Reviewed Word by Word
Before signing, a principal should ask:
Who exactly am I appointing?
What company or companies can the attorney deal with?
Which properties can the attorney deal with?
Can the attorney sell or transfer shares?
Can the attorney sell or transfer property?
Can the attorney mortgage property or create security?
Can the attorney receive money on my behalf?
Can the attorney sign contracts?
Can the attorney settle disputes or waive rights?
Can the attorney appoint another person in their place?
Can the attorney act in transactions involving themselves or a related party?
How long should the authority remain in place?
Most importantly:
Does the attorney actually need every one of these powers?
If the answer is no, the unnecessary power should be considered for removal.
Do Not Use a “One-Size-Fits-All” POA
One of the most common problems with POAs is relying on a standard form without considering the principal's particular circumstances.
A POA for selling one property does not need to become a general authority over every property owned by the principal.
A POA for a specific company transaction does not necessarily need to cover every company in which the principal holds shares.
A POA to complete a government procedure does not necessarily need authority to sell assets.
The narrower the genuine requirement, the narrower the authority should generally be.
The objective is not to make the POA complicated.
The objective is to make the authority clear, deliberate and proportionate to the purpose for which it is being granted.
The New UAE Law Makes This Review Particularly Relevant
The new Civil Transactions Law, Federal Decree-Law No. 25 of 2025, replaced the previous Civil Transactions Law and came into force on 1 June 2026. The UAE Ministry of Justice has described the new legislation as part of the country's modernization of its civil legal framework.
For agency and corporate practice, one important development is the clearer treatment of authority.
Legal analysis of the new law notes that a general POA is intended for management and preservation, while transactions such as sales, mortgages, settlements and other acts beyond ordinary management require special authority identifying the relevant act.
This makes it particularly important for businesses and individuals to review old POAs and consider whether their existing authority documents still accurately reflect what the principal intends to delegate.
What About Revoking a POA?
A principal should not adopt the attitude:
“I will give all the powers now and revoke them if we have a disagreement later.”
Revocation can be possible, but its legal effect depends on the circumstances and whether rights of third parties or other protected interests have arisen.
The safer approach is to avoid granting unnecessary authority in the first place.
Where an existing POA is no longer appropriate, the principal should obtain proper legal advice on whether it should be revoked, replaced or restricted and what further steps may be necessary.
Existing POAs Should Also Be Reviewed
This is not only a warning for people who are about to sign a POA.
If you already have a Power of Attorney issued several years ago, take the document out and read it again.
Ask:
Why was it originally issued?
Is that purpose still relevant?
Does the attorney still need the authority?
Has the relationship between the principal and attorney changed?
Does the POA cover property that should no longer be included?
Does it cover shares or companies beyond the original purpose?
Does it contain authority to receive money?
Does it contain authority to appoint another attorney?
Are there powers that are simply no longer necessary?
A POA that was appropriate five years ago may no longer be appropriate today.
The Principal Should Never Sign What They Have Not Understood
A POA is not just another document requiring a signature.
It determines the legal authority another person may exercise on the principal's behalf.
The principal should therefore understand every significant power before signing.
This is particularly important where the POA concerns:
real estate, company shares, bank accounts, investments, business ownership, contracts or substantial financial interests.
A few additional lines in a POA may appear harmless at the time.
But when a relationship later breaks down, those same words may become extremely important.
The Key Principle: Grant Only What Is Necessary
The safest mindset when preparing a POA is simple:
Do not ask, “What powers can I give this person?”
Ask:
“What is the minimum authority this person actually needs to complete the task?”
If the attorney needs to sell one identified property, identify the property and the transaction.
If the attorney needs to deal with one company, identify the company and the relevant authority.
If the attorney needs to complete one corporate transaction, specify that transaction.
If the attorney does not need authority to sell shares, do not give authority to sell shares.
If the attorney does not need authority to deal with your property, do not include it.
If the attorney does not need authority to receive funds, consider excluding that power.
A carefully drafted POA does not demonstrate a lack of trust.
It demonstrates that the principal understands the legal significance of delegation.
Before You Give a Power of Attorney, Review It Carefully
Trust is important.
But a legal document should be drafted for the possibility that circumstances may change.
A shareholder may stop trusting another shareholder.
A business partner may become a competitor.
A family relationship may deteriorate.
A business arrangement may end.
When that happens, the principal should not discover for the first time that the attorney was given powers that were never actually necessary.
Review the POA. Understand every power. Remove unnecessary authority. Limit the document to what is genuinely required.
That is one of the most important protections a principal can take before granting a Power of Attorney.
ConnectIn Business Services
ConnectIn Business Services assists individuals, shareholders and businesses in Dubai with Power of Attorney preparation, corporate documentation, notarization and related document services.
Where a POA involves property, shares, company ownership or other significant assets, the document should be carefully reviewed according to the principal's specific requirements and the applicable UAE legal framework.
Before you sign a POA, make sure you know exactly what you are giving another person the legal authority to do.