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United Arab Emirates: How to Start a Business While Being Employed by a Company - News

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KT readers want to know if there are legal ramifications for starting your own venture while working for a company.


Ashish Mehta

Release: Sunday, September 25, 2022 11:36

Q: I work for a company in mainland Dubai. I would like to start a business in the United Arab Emirates. Are there any laws I should be aware of? Are there any legal complications as far as starting a business while working? For example conflicts of interest.

response: As you are employed by a mainland company in Dubai, you are subject to the provisions of Federal Decree No. 33 of 2021 on the Regulation of Employment Relationships (“Employment Law”) and Federal Decree No. 33 of 2021 on the Regulation of Employment Relationships (“Employment Law”). 2022 on the implementation of Cabinet Decision No. 1 of 2022”) will apply.

Employees may establish a business entity in the UAE or become a partner or shareholder of an existing business entity, provided that the employer issues a No Objection Certificate (NOC). Therefore, you should obtain her NOC from your current employer before starting your own business.

Additionally, if the proposed entity’s activities are similar to its current role, employers may consider the entity to be a competitor. This is based on Article 10, Paragraph 1 of the Employment Act, which stipulates as follows. After the expiration of the contract, he will not compete with or engage in any business that competes with him in the same department. The type shall be specified. The non-compete period shall not exceed 2 years after the expiration of the contract. ”

However, the non-compete clause may not apply if you and your employer agree in writing that it will not apply upon termination of the current contract. This is based on Article 12(4) of Cabinet Decision No. 1 of 2022, which states, “If it is possible to agree in writing not to apply the non-compete clause after the termination of the employment contract.”

In addition, non-compete provisions may be exempted as stated in Article 12(5) of Cabinet Decision No. 1 of 2022. ) is regulated by the Employment Act under the following conditions:

of. The written consent of the previous employer is required if the employee or new employer pays her compensation not exceeding three months of the employee’s wages as agreed in the last contract with the previous employer. .

b. If you cancel the contract during the trial period.

c. Any professional category in accordance with the needs of the UAE employment market as determined by a decision of the Ministry under employment classifications approved by the Cabinet. ”

Therefore, under the aforementioned options and the provisions of the law, you may consider resigning from employment by serving the prescribed notice period. Thereafter, once the notice period has been completed and the work permit/residence visa has been revoked, a business entity can be set up in the UAE to avoid legal consequences.

However, if you set up an organization that conducts similar activities as your previous employer, your previous employer may file a complaint/civil action against you. Article 12(2) of Cabinet Resolution No. 1 of 2022 states: Lying with employers. ”

Further clarification on this matter can be obtained from the Ministry of Human Resources and Emirates.

Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practice law in Dubai, UK and India. For more information about his company, please visit Readers can email questions to: or Legal View, Khaleej Times, PO Box 11243, Dubai.

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