Can UAE employees start a business while keeping their jobs? What the law says

An employee of a Dubai mainland company may start a business or become a partner or shareholder in an existing UAE company, but the employer must first issue a No Objection Certificate, according to the legal guidance cited by Khaleej Times.

The main restriction concerns competition. If the proposed business resembles the employee’s current work, it could compete with the employer. A signed employment contract may therefore prevent the employee from engaging in a similar business.

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Where the employee performs a work which gives him access to employer's customers or business secrets, the Employer may make a provision in the employment contract that the employee shall not compete with or be engaged in any business which competes with him in the same sector after the expiry of the contract.

Article 10(1) of Federal Decree Law No. 33 of 2021 allows an employer to include a non-compete clause when an employee has access to customers or business secrets. The clause must define the place, period and type of restricted work, and cannot last more than two years after the employment contract ends.

The restriction may not apply after employment ends if the employee and employer agree in writing to waive it. The cited Cabinet Resolution No. 1 of 2022 also provides for exemptions, including a situation in which the employee or new employer pays the former employer compensation not exceeding three months of the employee’s salary under the last contract.

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It shall be permissible to agree in writing on the non-performance of the non-competition clause after the end of the employment contract.