UNITED ARAB EMIRATES Law and Practice Contributed by: Yasser Omar and Laryssa Perkins, Hadef & Partners LLC
terminate can still be served during the term. The DIFC and ADGM permit indefinite contract terms. 10.2 Employee Compensation Compensation is usually split between basic salary and allowances, such as housing, transport and oth - er allowances. Onshore companies are not required to provide pension arrangements, aside from GCC nationals. The ADGM and the DIFC have separate arrangements which are more aligned to pension contributions. Onshore employees receive an end-of-service gratu - ity, which is based on final basic salary and length of service. This gratuity, along with all other employment income, is paid tax-free in the UAE. Employers have to provide medical insurance in the UAE. 10.3 Employment Protection The UAE does not recognise mandatory transfers of employment, or protection of employee rights where an acquisition or transfer of a business occurs. There is no equivalent to TUPE or the acquired rights direc - tive, as in Europe. The process may involve termination of employment, and payment of any outstanding dues such as gratu - ity, and new employment may (or may not) be offered with the new business entity. Agreements to delay the end of service payments until the end of the employ - ment can be reached between the interested parties and employees, along with recognition of continuity of employment. No works councils, employee representative groups, or collective bargaining in any form are required (or permitted). 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI There are a number of industry sectors where, due to national interests (whether security, economic or
cultural), a more detailed review is undertaken from an intellectual property perspective. These industry sectors include the following: • Telecommunications and Technology: As an advocate of a digital economy, and taking steps to achieve widespread implementation by the 2030s, this is a core sector for the UAE and close attention is paid to the nature of FDI in this sector, in particu - lar whether any technology transfer agreements could be adverse to national interests. • Defence: The UAE has a significant domestic defence industry and particular attention is paid to FDI in this sector to avoid unauthorised dissemina - tion of sensitive information and/or technologies. • Financial Services: As an increasingly popular des - tination for financial investment, while also playing a key anchor role in this sector in the Middle East, close attention is paid to FDI generally, but in par - ticular with regards to fintech and digital banking, and associated security and protection measures. • Pharmaceuticals: The UAE has some of the world’s most rigorous evaluation and approval processes for pharmaceuticals, as well as an increasing num - ber of UAE home-grown pharmaceutical entities. In terms of the protection of intellectual property rights and confidential information, as well as the protection of consumer health and safety, FDI in this sector is subject to multiple layers of review. In conducting FDI reviews, various criteria are taken into account and are tailored to the particular industry sector. These evaluative criteria include the following: • Economic Impact: To what extent will the FDI result in job creation, infrastructure development, or other benefits to the UAE economy? • National Security: Does the FDI concern industry sectors related to national security, critical infra - structure, or sensitive technology? For example, defence and cybersecurity. • IP Compliance: To what extent does the FDI, and the underlying entity, recognise intellectual prop - erty rights? What (if any) agreements, relationships or similar are in place between the UAE and the country of the FDI applicant?
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