A worker can form a unit or stand as a partner or stakeholder in a running one in the United Arab Emirates, given the worker grants a NOC. Hence, you must acquire a no objection certificate from your existing employer prior to initiating your own business.
Further, in case the activities of your desired unit are the same as those in your recent post, your employer can think about the units as a competitor.
This is as per Article 10(1) of the Employment Law, which says – “Where the worker acts a job which provides him entry to employer’s clients or business confidential things, the employer can create a provision in the employment agreement that the worker would not compete with or stand involved in any venture which competes with his in the similar industry after the expiration of the agreement. A such clause will mention the location, time, and kind of work to the extent essential to secure the legal business interests, and the non-competition duration will not more than two years after the expiry of the agreement.”
Although, a non-competition clause cannot stand applicable in case you and your worker would agree in writing that it doesn’t use on termination of your recent agreement.
It is as per Article 12 (4) of cabinet resolution no. 1 of 2022, which says – “In the case may be agreed in writing not to use the non-competition clause after the termination of the employment agreement.”
Further, the provisions of non-competition can stand exempted as specified in Article 12 (5) of Cabinet resolution no. 1 of 2022, which says – “A worker will stand free from the non-compete clause given for in Article (10) of employment law under the below-mentioned terms –
In case the worker or the new worker pays compensation not exceeding 3 months of the salary of the worker agreed on in the last agreement to the previous worker, and the previous worker’s written consent thereto is needed.
In case the agreement is completed throughout the probationary duration.
Any expert classifications as per the requirements of the employment market in the country, as decided by determination of the Ministry under the employment classification sanctioned by the cabinet.”
Hence, depending on the before-specified choices and provisions of the rule, you can think about resigning from your employment by giving the mentioned notice duration. Thereafter, on the accomplishment of your notice duration and cancellation of your work permit, you can form your business unit in the United Arab Emirates to sidestep any lawful consequences.
Although, in case you form a unit that would conduct the same activities as your last employer, the former employer can file a complaint or civil case against you. If you want to start a business hassle free Start any Business is one stop solution for you.
Article 12(2) of Cabinet resolution no. 1 of 2022 says – “in case of a conflict increases over beyond the non-competition clause and this isn’t settled peacefully, the matter will stand referred to the judiciary and the duty of showing the actual harm will fib with the employer.”
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