Remote Work under ADGM Regulations

In addition to the law governing the U.A.E. mainland there are more than 40 free zones, and each of them typically has its own internal regulations applicable to companies incorporated within them. Additionally, there are two financial free zones governed by common law: Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM). These free zones operate under common law and maintain their own comprehensive corporate and employment frameworks.

Regulations in the U.A.E. mainland and various free zones have different rules related to labour law. Federal Decree-Law No. (33) of 2021 Regulating Labour Relations, which applies to mainland companies and some free zone entities, does not address the employment of individuals residing outside the United Arab Emirates.

On the contrary, ADGM allows companies to hire remote workers from outside the country. As noted, ADGM applies an English common law framework, allowing it greater legal flexibility and alignment with international business standards. This legal independence enables ADGM to offer progressive labour policies, including those accommodating remote work arrangements for non-resident employees.

The ADGM Labor Regulations 2024 acknowledge the possibility of employing remote employees who do not reside inside or outside the U.A.E. and whose normal place of work is not the Employer’s premises in the ADGM. For such employees, the Regulations exempt the employer from certain obligations, such as the provision of drinking water, ventilated premises, and, critically, the requirement to obtain a visa or work permit if the employee is based outside the U.A.E.

Accordingly, if an employee does not reside in the U.A.E., then the requirements of obtaining visas and work permits do not apply to such remote worker. This exemption significantly reduces administrative burdens and ongoing business costs, as employers are not required to apply for and continually renew work visas for remote, non-resident employees.

However, if a remote employee resides in the U.A.E., the employer must obtain a work visa, work permit, and U.A.E. identification card for that individual, as per regulatory requirements.

Employers engaging remote workers outside the U.A.E. under ADGM jurisdiction should ensure that employment contracts clearly specify the governing law, dispute resolution mechanisms, and expectations related to working hours, deliverables, and communication protocols. The ADGM Labor Regulations 2024 also oblige to state in the employment contract that the employee will be working remotely, rather than of including place of work in such contact.

Although there would be no income tax imposed within U.A.E., remote employees working from outside the U.A.E. may be subject to income tax in their country of tax residency.