Here’s everything you need to know.
To begin with, you can start a business in the UAE even if you are employed full-time. However, you must verify that your venture’s business activity is distinct from that of your employer. The field in which a business operates is referred to as business activity.
You can start a business in the UAE while still working full-time if your business activity is not the same as your current employer’s, and you may need to receive a No Objection Certificate (NOC) from your existing employer. The employer also has the ability to accept or reject the NOC request.
But do you always need a NOC before you start your own business?
You could or might not need one, depending on the regulations of each licensing agency (mainland, different free zones).
In addition, if the employee’s business activities are comparable to those of the employer, the employer may put a non-compete language in the employment contract. A non-compete clause in a contract prevents an employee from starting a business that competes with the employer unless the employer grants permission.
Article 10 paragraph (1) of the Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations [the new UAE Labour Law] states that where an employee’s job requires him to have access to the employer’s clients or trade secrets, the employer may include a non-compete clause in the contract and require the employee to refrain from engaging in or joining any business that competes with his industry after the contract expires.
To the degree essential to preserve the employer’s legal interests, the clause must be specified in terms of time, place, and type of labor. The duration of such a clause cannot exceed two years from the contract’s expiration date.
What if one is working part-time?
The legal requirements for running a business while employed vary depending on whether you are employed full-time, part-time, or on a temporary basis.
In order to run a business while meeting his or her employment duties, a full-time employee must operate his or her own company within the constraints imposed by the employer – if any – when the NOC is issued.