Hiring in the Abu Dhabi Global Market (ADGM) Free Zone involves a straightforward process, but there are essential steps and regulations you need to follow. Here's what you need to know to hire employees smoothly and in compliance with ADGM’s legal framework.

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Secure Your Business License

Before you can hire, you must register your company with the ADGM Registration Authority (ADGM RA) and obtain a business license. This process typically takes about two weeks if all required documents are submitted correctly. Ensure you’ve selected the right business activity and provided accurate information to avoid delays.

Pro Tip: Double-check that all your documentation aligns with your business activity—errors here are the most common cause of delays.

Obtain an Establishment Card

Once you have your business license, the next step is securing an establishment card. This card is mandatory for all businesses in ADGM and allows you to legally hire employees and issue work permits. The process usually takes 1–2 weeks if all documents are in order.

Pro Tip: Apply for your establishment card immediately after receiving your business license to streamline the hiring process.

Residency Visa for Foreign Employees

If you're hiring foreign nationals, you’ll need to obtain residency visas. This involves securing a work permit and completing the necessary immigration steps. Timelines vary based on the completeness of your documents, so it’s critical to have everything ready for faster processing.

Pro Tip: Keep an immigration checklist to ensure all requirements are met before submission.

Set Up Your Payroll System

Setting up a compliant payroll system is vital before hiring. You must ensure your payroll complies with ADGM regulations and the UAE's Wage Protection System (WPS), which protects workers' rights and ensures timely salary payments. Whether you handle this in-house or through a service provider, make sure the system is WPS-compliant to avoid penalties.

Pro Tip: Consider outsourcing payroll to a provider familiar with WPS compliance, especially if you're new to UAE labor laws.

Start Hiring

With your business license, establishment card, and payroll system in place, you can now start recruiting. ADGM offers access to a vast talent pool, making it easier to find qualified candidates. The UAE’s efficient visa process also allows you to onboard new hires relatively quickly.

Pro Tip: Streamline your hiring by leveraging recruitment platforms and professional networks active in the region.

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Eligible Company Types for Hiring in ADGM

ADGM allows several company structures to hire employees, each with its own set of regulations. Here are the most common:

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Limited Liability Company (LLC): LLCs can be 100% foreign-owned and must have at least two shareholders.

Branch Office: An extension of a foreign parent company, allowed to hire under ADGM's visa quota

Special Purpose Vehicle (SPV): Created for specific projects, such as real estate or infrastructure, SPVs can hire employees based on the project’s needs.

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1. Apply for a Commercial License
Start by registering your company with ADGM and securing a commercial license. This is essential before you can hire employees. You’ll also need to set up a physical office within the ADGM Free Zone, appoint directors and shareholders, and open a company bank account.
Tip: Prepare all necessary documents in advance to avoid delays in the licensing process.

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2. Issue a Formal Offer Letter
Once you’ve identified the right candidate, issue a formal offer letter outlining the terms of employment. Be clear about salary, benefits, job responsibilities, and probation period details.
Tip: Use the ADGM's employment law as a guide to ensure your offer letter complies with local regulations.

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3. Apply for Residency Visa & Emirates ID
After the candidate accepts the offer, begin the visa and Emirates ID application process. Sponsoring an employee typically takes 5-10 business days, and you'll need to cover various fees. Visas are valid for 1-2 years.
Tip: Ensure your paperwork is complete to speed up processing. Consult the ADGM Fee Schedule for exact costs.

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4. Draft an Employment Contract
Once the visa is approved, draft the employment contract. This should detail salary, benefits, job duties, leave entitlements, and termination terms in compliance with ADGM employment laws.
Tip: Tailor the contract to both the company’s and employee’s specific needs while remaining compliant with ADGM regulations.

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5. Submit Documents to ADGM
Submit all required documents, including the employment contract and visa, to ADGM authorities for final review. This step usually takes up to 2 business days.
Tip: Double-check documentation to avoid unnecessary back-and-forth with the authorities.

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6. Collect Visa & Emirates ID
Once approved, the employee’s visa will be issued digitally. For first-time applicants, biometric data will need to be submitted for the Emirates ID, which is typically ready for collection within a few days. Notifications will be sent with pick-up location details.
Tip: Keep track of application statuses to avoid delays in onboarding.

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7. Register for Social Security (If Applicable)
If the new hire is a UAE or GCC national, you must register them with the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF) for social security.
Tip: Complete this step promptly to ensure compliance with UAE labor laws and avoid penalties.

1. Review the Employment Contract

Begin by thoroughly reviewing the employee's contract. Pay special attention to the notice period, grounds for termination, and any termination-related compensation.

2. Provide Notice of Termination

If the contract includes a notice period, deliver written notice to the employee. This notice should clearly state the reason for termination and the effective end date. The notice period typically ranges from one to three months, depending on the employee’s length of service and contractual terms.

Tip: Ensure that the notice is documented and retained for compliance purposes.

3. Conduct a Termination Meeting

Schedule a private meeting with the employee to discuss the termination. During this meeting, outline the reasons for the decision, the notice period, and address any questions regarding final pay or benefits.

Tip: Prepare for the meeting by gathering all relevant documentation, including performance reviews and the notice letter.

4. Process Final Payments and Benefits

Before the employment ends, calculate and process all final payments, including:

• Outstanding Salary: Ensure all owed wages up to the termination date are paid.
• Accrued Leave: Compensate for any unused leave entitlements.
• End-of-Service Gratuity (ESG): Calculate the ESG based on the employee's service duration and final basic salary:
  • For the first 5 years: 21 days of basic wage for each year.
  • Beyond 5 years: 30 days of basic wage for each additional year.

Tip: Ensure final payments are made promptly to maintain a positive relationship and reduce the risk of disputes.

5. Cancel Work Permit and Residency Visa

For non-UAE nationals, promptly cancel their work permit and residency visa with the ADGM Registration Authority and the General Directorate of Residency and Foreigners Affairs (GDRFA) in Abu Dhabi. Remember to first cancel any dependents on the visa before proceeding with the employee's cancellation.

Tip: Keep documentation of the cancellation process for record-keeping and compliance.

6. Issue a Service Certificate

Provide the employee with a service certificate confirming their employment duration, job title, and responsibilities. This document serves as a valuable reference for future job applications.

Important Considerations

Follow the proper procedures for employee termination to mitigate the risk of legal disputes or penalties. Always consult the ADGM Registration Authority or seek legal advice for specific termination regulations and requirements in the ADGM Free Zone.

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ADGM Free Zone employers can choose from various employment contract types based on their business needs:

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Limited-Term Contract: A fixed-term agreement (up to four years) specifying start and end dates, salary, benefits, and leave entitlements.

Unlimited-Term Contract: A permanent contract with no fixed end date, suitable for ongoing employment.

Part-Time Contract: For employees working fewer than standard hours, with prorated terms based on hours worked.

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Project-Based Contract: Specific to a defined project, detailing scope, duration, and deliverables.

Freelance Contract: For self-employed individuals providing services on a project basis, outlining scope, fees, and terms.

Tax Implications

The ADGM Free Zone offers significant tax advantages, including no corporate or personal income tax on earnings for registered companies and individuals. However, businesses operating outside the ADGM or employees with tax residency in other countries may face applicable taxes.

Important Contractual Clauses

Exclusivity Clauses

Exclusivity clauses restrict employees from working with competitors during and after employment. While these protect business interests, they must be reasonable and clearly defined to avoid being deemed unenforceable.

Non-Disclosure Agreements (NDAs)

NDAs protect confidential information from unauthorized disclosure. Employers often require NDAs for employees handling sensitive data. Ensure NDAs are specific, reasonable, and comply with UAE labor laws, and clearly communicate their implications to employees.

Key Considerations

• Follow Proper Procedures: Adhering to the correct termination process is crucial to avoid legal disputes.
• Clarity and Transparency: Ensure all contractual obligations are clearly communicated and understood by both parties.‍
• Seek Legal Advice: Employers and employees should consider legal counsel to navigate contract clauses and compliance with regulations.

Key Payroll Components in the ADGM

The structure of payroll in ADGM free zone companies typically includes:

• Basic Salary: The core salary for regular working hours.
• Allowances: Additional payments like housing or transportation, based on company policy.
• Overtime Pay: Compensation for hours worked beyond the standard schedule.
• Bonuses: Performance-based or discretionary rewards.
• Deductions: Including taxes, social security contributions, and other legally required withholdings.

Currency and Payment Terms

In ADGM, salaries are generally paid in UAE dirhams (AED) as per UAE Labor Law. Employers and employees may agree on payments in foreign currency, provided it's documented in writing.

There are no restrictions on transferring foreign currency out of the UAE, but employers must ensure they comply with applicable tax and foreign exchange regulations when using non-AED currencies.

Wages Protection System (WPS)

While ADGM companies are currently exempt from the WPS protocol (a system used by the UAE Ministry of Human Resources and Emiratisation to ensure timely and full salary payments), employers must still prioritize compliance and timely payment to avoid disputes. Employees can file complaints with authorities if salaries are delayed or incomplete.

Payroll Cycles

Payroll frequency in ADGM can vary based on company policy, but monthly payments are most common. The UAE Labor Law mandates that employees receive payment at least once per month, including basic salary, allowances, and any other entitlements. Employers must provide clear, detailed pay statements to avoid discrepancies.

Working Hours and Overtime

Standard working hours in ADGM follow UAE Labor Law, capping at 48 hours per week (8 hours per day, 6 days per week). Employers must provide at least one day off per week and compensate overtime accordingly.

During Ramadan, working hours are reduced by two hours per day for Muslim employees observing the fast.

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The minimum benefits required by UAE labor law include:

Health insurance: Employers are required to provide their employees with health insurance coverage, which should meet the minimum requirements set by the Dubai Health Authority.

End of service gratuity: Employees who complete one year of continuous service with their employer are entitled to a gratuity payment upon termination of employment. The amount of the gratuity is calculated based on the employee's length of service and final salary.

Employers may also offer additional benefits to their employees. These may include:

Retirement benefits: Employers may offer retirement plans, such as a pension scheme or a provident fund, to their employees.

Education assistance: Employers may offer education assistance to employees who are pursuing further education or training.

Employee discounts: Employers may offer discounts on their products or services to their employees.

Wellness programs: Employers may offer wellness programs, such as gym memberships or health coaching, to promote employee health and well-being.

Flights back home: There is no legal obligation to provide employees with an annual flight to their home country, however, it is common market practice to do so.

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Pensions for GCC Nationals

GCC (Gulf Cooperation Council) nationals working in the ADGM free zone are entitled to pension benefits, subject to certain conditions. The pension system in the UAE is regulated by the General Pension and Social Security Authority (GPSSA), which is responsible for managing pension contributions and payments.

Under the GPSSA regulations, employers are required to contribute a certain percentage of their GCC national employees' salaries to the pension system. The percentage varies based on the employee's age and length of service, but it generally ranges from 5% to 18% of the employee's basic salary. The employer is responsible for deducting the employee's portion of the contribution from their salary and adding it to the employer's contribution.

Employees who are GCC nationals and are enrolled in the GPSSA pension system are entitled to pension benefits upon reaching retirement age, which is currently set at 60 years. The pension benefit is calculated based on the employee's length of service and the average of their final three years of salary. The minimum pension benefit is 60% of the average of the final three years of salary.

Workers’ Compensation

Workers' compensation is a form of insurance that provides benefits to employees who are injured or become ill as a result of their work. In the ADGM free zone, workers' compensation is mandatory for all employers, and it is regulated by the ADGM Courts and the Abu Dhabi Judicial Department.

Under the ADGM regulations, employers are required to provide workers' compensation coverage for their employees. This coverage provides benefits for medical expenses, disability, and death benefits for employees who are injured or become ill as a result of their work. The benefits provided under the workers' compensation coverage can vary depending on the severity of the injury or illness, but they generally cover medical expenses and a portion of the employee's lost wages.

Employers in the ADGM free zone are required to purchase workers' compensation insurance from an insurance provider that is authorized by the ADGM Courts. The insurance provider will determine the premium rate based on the employer's industry, the number of employees, and the type of work being performed. Employers must provide proof of workers' compensation coverage to their employees.

Allowances

In an ADGM free zone contract, employers can provide different types of allowances to their employees in addition to their base salary. These allowances can be given to compensate employees for certain expenses, to incentivize performance, or to attract and retain talent. Here are some common types of allowances that can be offered:

Housing Allowance: This allowance is provided to help employees cover the cost of their housing expenses. Employers can provide a fixed amount or a percentage of the employee's base salary as a housing allowance.

Transportation Allowance: This allowance is provided to help employees cover the cost of their transportation expenses, such as fuel, public transportation fees, or car maintenance. Employers can provide a fixed amount or a percentage of the employee's base salary as a transportation allowance.

Education Allowance: This allowance is provided to help employees cover the cost of their children's education. Employers can provide a fixed amount or a percentage of the employee's base salary as an education allowance.

Medical Allowance: This allowance is provided to help employees cover the cost of their medical expenses. Employers can provide a fixed amount or a percentage of the employee's base salary as a medical allowance.

Performance Bonus: This allowance is given to employees as a reward for achieving certain performance goals or targets. Employers can set specific criteria for earning the bonus and determine the amount of the bonus based on the employee's performance.

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Employers in the Abu Dhabi Global Market (ADGM) free zone are required to comply with UAE labor laws concerning employee leave entitlements. The following leave types are typically provided to employees:

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Annual Leave

• Entitlement: Employees are entitled to at least 20 days of paid annual leave after completing 90 days of service.
• Accrual: Leave is earned based on the employee's length of service, and may increase with seniority.

Maternity Leave

• Entitlement: Female employees are entitled to 65 days of maternity leave.
• Pay Structure:
  • Full pay for the first 33 days.
  • Half pay for the next32 days.
• Extension: Maternity leave can be extended if public holidays overlap with the leave period, ensuring no loss of days.

Paternity Leave

• Entitlement: Male employees receive a minimum of five days of paid paternity leave.
• Usage: This leave can be taken within the first two months of the child’s birth.

Sick Leave

• Entitlement: Employees are eligible for up to 60 days of sick leave per year.
• Pay Structure:
  • Full pay for the first 10 days.
  • Half pay for the next20 days.
  • No pay for the remaining30 days.
• Termination: If sick leave exceeds 60 days, employers may terminate employment with written notice.

Other Leave

• Employers may offer additional leave, such as:
  • Compassionate Leave:For bereavement or personal emergencies.
  • Study Leave:For further education or professional development.
  • Unpaid Leave:Depending on company policy.

Paternity Leave

• Haj Leave: Muslim employees may take up to 30 days of special leave for the Haj pilgrimage, provided they have completed one year of service.

Public Holidays

• Entitlement: Employees are entitled to all UAE-declared public holidays.
• Compensation: If required to work on a public holiday, employees are entitled to either:
  • A substitute day off, or
  • Additional pay as compensation.

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In the Abu Dhabi Global Market (ADGM) free zone, employers can sponsor employees for various visas, allowing them to legally work and reside in the UAE. Below is a concise breakdown of visa types, how to apply, renew, or cancel a visa, and details on the coveted Golden Visa.

Visa Types in ADGM Free Zone

1. Employment Visa

• Eligibility: Foreign nationals sponsored by an employer.
• Validity: 3 years, renewable.
• Key Details: Required for employees hired in ADGM. Sponsorship, contract terms, and residency compliance are critical.

2. Investor Visa

• Eligibility: Foreign investors who establish a business in the UAE.
• Validity: 3 years, renewable.
• Key Details: Applicants must provide evidence of investment or business ownership in the UAE.

3. Partner Visa

• Eligibility: Shareholders or partners in a UAE-based company.
• Validity: 3 years, renewable.
• Key Details: Must show proof of company registration and shareholding.

4. Dependent Visa

• Eligibility: Family members of employees with a valid employment visa.
• Validity: 3 years, renewable.
• Key Details: Applicants need proof of relationship (spouse, children) and the sponsor's income must meet the threshold.

5. Visit Visa

• Eligibility: Foreign nationals visiting the UAE for tourism, business, or other purposes.
• Validity: 30 days, extendable for another 30 days.

Key Details: This is a short-term, non-renewable visa used for temporary stays.

Canceling a Visa in ADGM Free Zone

When terminating employment or ending sponsorship, employers or sponsors are responsible for canceling the visa.

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Notify Employee:
Provide formal notice according to UAE labor laws.

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Submit Cancellation Request:
Required documents include:

• Passport
• Emirates ID
• Employment contract termination

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Approval:
Authorities review the request, which typically takes 3-5 days.

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Provide Exit Paperwork:
Once canceled, provide the employee with an exit permit.

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Exit the UAE:
The employee must leave the UAE within the time specified (usually 30 days).

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Pro Tip:

• If the employee fails to exit on time, penalties or legal issues may arise. Employers should monitor compliance closely.

Applying for a Visa in ADGM Free Zone

Follow these steps to ensure a smooth application process:

Steps to Apply

Determine Visa Type:
Select the appropriate visa based on your purpose (employment, investment, family, etc.).

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Submit Application:
Submit online via e-Visa or through a sponsor. Ensure you provide all required documents, such as:

• Passport copy
• Visa application form
• Employment contract or investment proof

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Pay Fees:
Fees vary depending on the visa type (usually AED 1000 - 5000).

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Processing Time:
Typically takes 5-10 business days. Expedited processing is available at an additional cost.

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Collect Visa:
Once approved, collect the visa digitally or from relevant authorities. Check that all details are correct.

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Pro Tips:

• Prepare Documents Early: Missing or incorrect paperwork can cause significant delays.‍
• Verify Sponsor Information: Ensure your sponsor’s details are correct, as errors could lead to rejection.

Renewing a Visa in ADGM Free Zone

Visa renewal follows a similar process to initial applications but requires additional checks to ensure eligibility.

Renewal Steps

Check Eligibility:
Visa must be renewed before expiry. Ensure all documents are up-to-date, including passport validity and Emirates ID.

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Submit Renewal Request:
Use the e-Visa system or work with a registered sponsor.

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Pay Renewal Fees:
Fees range from AED 1000 to AED 5000 depending on visa type.

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4. Wait for Processing
Processing Time: Expect a processing window of 5-7 business days.

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Collect Renewed Visa:
Ensure the updated visa reflects correct details and covers the new intended period of stay.

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Common Complications:

• Expired Visa: If your visa expires before renewal, you could face fines starting at AED 25 per day. Apply early to avoid penalties.‍
• Missing Documents: Incomplete documents can delay approval. Double-check that your Emirates ID, passport, and supporting paperwork are valid.

Golden Visa for ADGM Free Zone

The Golden Visa is a prestigious, long-term residency visa offering a 10-year renewable stay in the UAE, designed to attract top talent and investors.

Golden Visa Benefits:

• No National Sponsor Required: Live, work, and study without local sponsorship.
• Sponsor Family Members: Visa holders can sponsor spouses and children.
• Property Ownership: Eligible to purchase property in the UAE.
• Multiple Entries: Flexibility to enter and exit the UAE without limitations.

Eligibility Criteria:

• Professionals: PhD holders, doctors, engineers, and specialists in priority fields.
• Investors: Substantial investments in the UAE economy.
• Entrepreneurs: Owners of successful businesses or innovative startups.
• Scientists/Researchers: Key contributors to scientific or technological advancements.

Application Process:

1. Gather Required Documents: Passport, proof of qualifications, and/or investment documents.
2. Submit Application: Via UAE Ministry of Interior or GDRFA.
3. Pay Processing Fees: Varies based on the profession and specific category (approximately AED 4,000 - 5,500).
4. Wait for Approval: Processing time is usually 30-60 days.
5. Receive Golden Visa: Once approved, enjoy the benefits of long-term residency.

Pro Tips:

• Track Eligibility Changes: The UAE government updates Golden Visa requirements periodically. Stay informed to avoid missing new opportunities.‍
• Benefit from Fast-Track Processing: Available for high-profile applicants or key investors.

Work Permits

Work permits in the Abu Dhabi Global Market (ADGM) free zone are regulated by the General Directorate of Residency and Foreigners Affairs (GDRFA). This guide outlines the essential steps and practical tips for obtaining a work permit.

Steps to Obtain a Work Permit

1. Secure an Employment Offer
   • Requirement: Obtain a valid job offer from an employer registered in the ADGM free zone.
2. Employer Submits Work Permit Application
   • Documents Required:
     • Employee's passport copy
     • Visa application form
     • Medical fitness certificate (from an approved UAE facility)
     • Tip: Confirm all documents are complete to avoid processing delays.
3. Work Permit Approval
   • The GDRFA will review and approve the work permit application, which may take 10-15 business days.
4. Apply for Residence Visa
   • The employee applies for a residence visa using:
     • Work permit approval
     • Passport copy
     • Health insurance policy
   • Important: Ensure the health insurance meets UAE requirements to prevent application rejection.
5. Complete Medical Tests
   • Undergo required medical examinations, including tuberculosis (TB) screening.
6. Receive Residence Visa
   • Once all requirements are met, the residence visa will be issued, allowing the employee to work legally in the ADGM free zone.

Practical Tips for Work Permit Applicants

• Timelines: Expect a total processing time of about 3-4 weeks. Initiate the process early to accommodate any unforeseen delays.
• Health Insurance: Employers must provide health insurance; securing this early can prevent last-minute issues.
• Overstay Penalties: Be aware that overstaying your visa can lead to fines or legal issues. Plan for timely renewals.

Secondee Work Permit in ADGM Free Zone

A Secondee Work Permit enables employees from companies outside the ADGM free zone to work temporarily within ADGM. This arrangement is often used for short-term projects or collaborations.

Key Differences from a Regular Work Permit

• Employer Location: The secondee's employer must be registered outside of ADGM.
• Temporary Employment: This permit is typically issued for a fixed duration related to specific projects.

Steps to Obtain a Secondee Work Permit

1. Obtain a Secondee Employment Offer
   • The employee must receive a temporary offer from the ADGM entity.
2. Employer Submits Secondee Application
   • Documents Required:
     • Employee’s passport copy
     • Secondee visa application form
     • Medical fitness certificate
     • Proof of employment with the original employer
     • Sponsorship authorization letter from the original employer
   • Tip: Ensure the sponsorship letter is comprehensive to avoid delays.
3. ADGM Review
   • The ADGM authorities will assess the application and may request additional information.
4. Secondee Work Permit Approval
   • Once approved, the employee can proceed to apply for a residence visa.
5. Complete Medical Tests
   • Undergo necessary health examinations.
6. Receive Residence Visa
   • After approval, the secondee will be issued a residence visa, enabling them to work in the ADGM free zone.

Common Pitfalls and Solutions

• Incomplete Documentation: Ensure all documentation is accurate and complete to avoid processing delays.
• Short-Term Nature: Plan for the duration of the secondee permit; extensions may not always be possible.
• Health Insurance Compliance: Verify that health insurance complies with UAE regulations, even if the employee is from outside the UAE.

Additional Insights and Considerations

Visa Eligibility Criteria

• Nationality Restrictions: Certain nationalities may have specific requirements or longer processing times. Consult GDRFA guidelines for detailed information.
• Job Level Nuances: Some positions may require additional documentation or higher qualifications. Ensure that the job title aligns with the permit application.

Contingency Planning

• Expired Visas: If a visa expires before renewal, penalties may apply. It’s crucial to start the renewal process at least 30 days before the expiration date to avoid complications.

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