Can you start a business while doing full -time work in UAE? Legal Does and Don’t Don’t Clear | world News
Starting a business during the full -time employed in the UAE can be a complex issue, especially if your new enterprise is in an area similar to your current job. Many employees are surprised whether they can legally launch a company with their current employment without violating any law or contractual obligations. Here is a detailed description based on the latest UAE labor laws and expert insights.
Establish a business while employing : the basics
According to the UAE law, a full -time employee can establish a new business or become a partner or shareholder in an existing company. However, this is accidental on obtaining a no object certificate (NOC) from his current employer. NOC is a formal approval that allows the employee to carry forward entrepreneurial activities while legally employed.For example, if you work in a company’s HR department and want to start an HR consultancy, it is important to first secure this NOC from your employer. Without this, the new business can be considered unauthorized and can lead to legal complications.
Competition and Non-Competition section in employment contracts
If your employed business works in the same field of your employer, such as your case with HR consultancy, and your employment contract includes a non-perception section, then it can be problematic to start this business.On the regulation of employment relations, Article 10 (1) of the federal decree law number 33 of 2021 has specified that if the employee’s job provides access to customers or commercial secrets of the employer, then the employer may involve a section to prevent the employee from competing during employment or after.Regarding the Non-Competition section:
- To protect the valid business interests of the employer, it should clearly define the location, time and type of work.
- The non-perception period may not exceed two years after the employment contract ends.
When non-perfect sections cannot apply
There are exceptions where non-perception section cannot apply, especially once your employment ends:
- If you and your employer agree in writing that the clause will not apply after the contract ends, the restriction is lifted. It is mentioned in Article 12 (4) of the 2022 Cabinet Resolution No.1 of 2022 for the federal decree law number 33 of 2022.
- According to Article 12 (5) of the same resolution, the section can also be exempted under certain conditions:
- If you or your new employer pays compensation from the former employer, then the three -month wages (according to your final contract) and the former employer does not exceed the consent in writing.
- If the employment contract is terminated during the probation period.
- If your profession comes under the categories set by the Ministry of Human Resources and Emirates as required in the UAE labor market.
