The Abu Dhabi Global Market (ADGM) has updated ADGM Employment Regulations 2024 (the “New Employment Regulations”), which bring forward significant improvements that align with global best practices, offering benefits to both employers and employees. With a focus on clarity, flexibility, and fairness, these regulations create a more balanced and progressive work environment. For businesses, the changes offer the opportunity to refine employment policies, enhance employee relations, and ensure compliance with modern workplace standards. As the regulations come into effect on 1st April 2025, employers have a valuable window of time to implement the necessary adjustments, positioning themselves for a smoother, more compliant future while fostering a supportive workplace culture. 

Let’s dive into the key insights of updated ADGM Employment Regulations that will shape the future of employment in ADGM. 

1. Introduction of Flexible Employment Models 

One of the significant updates in the ADGM employment regulations is the introduction of more flexible working arrangements. Employers will now be able to hire remote employees, and the definition of an “employee” has been expanded to accommodate this shift. This change provides more room for businesses to operate in a global landscape, allowing them to hire talent from outside the UAE without needing a local residence visa or work permit, as long as the employee doesn’t reside in the UAE. 

2. Enhanced Employee Rights and Clarifications 

The updated ADGM employment regulations provide greater clarity on employee entitlements, particularly for part-time employees. These changes aim to ensure that part-time workers are given their fair share of benefits, including leave entitlements. Employers will need to adjust their records and contracts to account for these nuances, ensuring that all employees, regardless of hours worked, are treated fairly and consistently. 

3. Probationary Period Updates 

The probationary period remains capped at six months, but the regulations now specify that employees during this period are entitled to sick leave, though not sick pay. During probation, certain provisions of the regulations do not apply, and the employee must have written approval from the employer to take annual leave. These updates provide greater transparency for both employers and employees regarding their rights during this trial period. 

4. Parental Leave and Family Rights 

The regulations extend important parental rights, including maternity leave of 65 working days, and now include provisions for employees who adopt children under the age of five. Maternity leave also extends to cases where a stillbirth or miscarriage occurs after the 24th week of pregnancy. Paternity leave remains at five working days. These updates ensure that employees receive the necessary support during significant life events. 

5. Anti-Discrimination and Anti-Victimisation Provisions 

The updated ADGM employment regulations place a greater emphasis on protecting employees from discrimination and victimisation in the workplace. Victimisation, as defined in the regulations, includes actions like dismissal or other detrimental treatment following an employee’s participation in protected acts, such as whistleblowing or filing a complaint regarding discrimination or harassment. Employers must take proactive steps to prevent such behaviour and must provide employees with a safe space to report wrongdoing. 

6. Whistleblower Protection 

The new regulations strengthen whistleblower protections by ensuring that employees who make protected disclosures are not subject to retaliation. Employers are prohibited from retaliating against employees who report violations of law, including harassment, discrimination, or health and safety concerns. If retaliation occurs, the employee can seek compensation and a court remedy. 

7. Working Hours and Overtime 

The maximum weekly working hours remain set at 48, but employees must provide written consent to work overtime. The law also stipulates a 25% reduction in working hours during Ramadan for Muslim employees, with no reduction in pay. While there are currently no specific provisions for overtime pay, the ADGM may issue further guidelines in the future. 

8. Termination and End of Service Gratuity 

The updated ADGM Employment Regulations introduce detailed provisions around the termination of employment. Employers will need to provide employees with written reasons for termination, and the notice period remains the same as under the old law. Notably, end-of-service gratuity is now payable in all cases where the employee has more than one year of service, even if the termination is for cause. Employers will also need to offer repatriation flights to eligible employees who are terminated, unless the employee is dismissed for cause. 

9. Settlement Agreements 

Settlement agreements, which are used when terminating an employment relationship, continue to be recognized under the new regulations. However, for a settlement agreement to be valid, it must include a clause that the employee has had the opportunity to receive independent legal advice. Additionally, the employer cannot make the cancellation of the employee’s visa conditional on waiving any rights according to the updated ADGM Employment Regulations. 

10. Vicarious Liability for Employers 

Employers will be held vicariously liable for the actions of their employees if these actions breach the new employment regulations, provided the act occurred during the course of employment. This means employers must be diligent in creating clear policies and training programs that prevent misconduct, including discrimination, harassment, and victimisation, to mitigate the risk of legal liabilities. 

11. Remote and Part-Time Employees 

The concept of “remote employees” and “part-time employees” is now formalized in the updated ADGM Employment Regulations. Remote employees, who work outside the UAE, will be subject to different rights and obligations, and their work arrangements will not require a UAE residence visa or ADGM work permit. Meanwhile, part-time employees will benefit from clearer guidelines around leave entitlements and other employment benefits, making it easier for employers to manage such employees. 

Updated ADGM Employment Regulations 2024: A New Era of Workplace Flexibility and Fairness 

The updated ADGM Employment Regulations 2024 usher in a new era of workplace fairness, flexibility, and compliance that benefit both employers and employees. Employers have the opportunity to refine their policies, adapt to modern workplace trends, and ensure they meet legal requirements before the regulations take effect in April 2025. These changes not only enhance employee satisfaction and support but also offer businesses a chance to stay ahead of the curve in a competitive and evolving market. It’s an exciting time for companies in ADGM to prepare for a future where fairness and flexibility are at the forefront of work experience. 

The Abu Dhabi Global Market (ADGM) is poised to update its Employment Regulations, initially enacted in 2019. These regulations were designed to set minimum employment standards, ensure a fair balance between employee and employer rights, and foster effective employment practices within ADGM. Since their inception, the Regulatory Authority (RA) has recognized the need for adjustments to better reflect evolving global work practices and to provide clearer guidance on rights and obligations for both employees and employers.

The RA has recently issued a Consultation Paper inviting public feedback on these amendments to ADGM Employment Regulations. This consultation is crucial for all ADGM-licensed employers, their employees, and prospective employees, as well as their legal advisors.

Here’s a breakdown of the key changes being proposed:

Proposed Amendments to ADGM Employment Regulations

1. Employee Entitlements and Definitions

• Probationary Period Entitlements: Clarification on employee entitlements during probation.
• Broadening the Definition of ‘Employee’: Updated to include full-time remote workers and flexible arrangements.
• Part-Time Employee Definition: Introduction of a new definition and method for calculating entitlements.

2. Working Arrangements

• Remote and Hybrid Working: Explicit permission for remote and hybrid working arrangements.
• Simplified Overtime Calculation: Removal of complex overtime calculation methods.

3. Leave Entitlements

• Enhanced Parental Leave: Additional entitlements for adopting parents and paid paternity leave for adopting fathers.
• Nursing Breaks for Female Employees: Entitlement to nursing breaks.
• Bereavement Leave: Leave entitlement for the death of close family members.

4. Employment Duties and Termination

• Expanded Employee Duties: Broadening the list of employee duties.
• Termination Due to Unauthorized Absence: Employers’ right to terminate employment for unauthorized absences.
• Certificate of Experience: Eligibility for a certificate of experience upon employment termination.
• End of Service Gratuity: Clarity on gratuity payments regardless of the reason for termination.

5. Discrimination and Compensation

• Discrimination and Victimization: New provisions addressing these issues and vicarious liability.
• Integration of Compensation Awards Rules: Integration of compensation awards rules into the main regulations.

6. Work Permit and Identity Card Requirements

• Work Permit and Identity Card: Requirements for obtaining and canceling work permits and identity cards in ADGM.

Next Moves for Proposed Changes to ADGM Employment Regulations

The RA is seeking comments on these proposals by 26 August 2024. Following this, the RA and the ADGM Board of Directors will review the feedback and make any necessary adjustments before finalizing and enacting the updated regulations. These changes are set to enhance employment practices within ADGM, providing clearer guidelines and more equitable entitlements.

Stay tuned for further updates on the proposed changes to ADGM Employment Regulations and if you want to know more about the existing key requirements and best practices ADGM Employment Regulations, dive into our article.

The Abu Dhabi Global Market (ADGM) has announced a significant reduction in its existing commercial license fees as part of its ongoing support for businesses transitioning to Al Reem Island. The new fee structure will take effect from 1st January 2025, featuring substantial reductions of 50% or more for obtaining non-financial and retail licenses within its jurisdiction.

Revised non-financial and retail license fees – key updates

The initiative’s intention is to enhance ADGM’s business ecosystem making it accessible and attractive for various businesses. Under the revised schedule:

1. Registration fees for new businesses in the non-financial category will be reduced from $10,000 to $5,000.
2. The annual license renewal fees for the same category will be lowered from USD 8,000 to USD 5,000.
3. Registration fees for the retail category have been slashed from USD 6,000 to USD 2,000.
4. License renewals for the retail category will also see a 50% reduction, lowering annual fees to USD 2,000.

The revised licensing fees will take effect on 1st January 2025, aligning with the conclusion of the current transition period on 31st December 2024. This new fee structure will apply throughout ADGM’s jurisdiction, covering both Al Maryah and Al Reem Island.

Hamad Sayah Al Mazrouei, the CEO of ADGM RA said “To facilitate a seamless transition, ADGM and its Registration Authority have proactively introduced various initiatives, prioritising our business community at the core of every decision. We assessed the financial impact on different business categories and previously implemented a fee waiver for qualifying non-financial and retail businesses on Al Reem Island. Building on these efforts, we have now revised our fee structure to include significant reductions for the same categories starting next year. Our aim is to minimise potential disruptions for businesses transitioning to an ADGM licence, enabling them to operate efficiently within our jurisdiction.”

Changes across categories

The fee exemption for qualifying non-financial and retail businesses on Al Reem Island ends on October 31, 2024. In other categories, ADGM’s financial registration fees will rise to USD 20,000 with renewals at USD 15,000 annually. Tech and fintech startups will experience minor adjustments in fees, with both new registrations and renewals set at USD 1,500. Fees for Special Purpose Vehicles (SPVs) remain steady at USD 1,900. A detailed fee schedule applicable from January 1, 2025, will be published in December.

Abu Dhabi Global Market (ADGM), a key financial hub in the UAE, has introduced a new whistleblowing framework to strengthen the market integrity. This initiative aims to promote transparency and accountability across ADGM entities and is a combined initiative of the ADGM authorities. The framework outlines a comprehensive system for reporting suspected breaches of ADGM laws or financial crimes while ensuring protection for whistleblowers who come forward with information about misconduct.

Key Features of the ADGM Framework

Clear Regulations: ADGM has established specific rules to protect and encourage the reporting of ‘protected disclosures’ made in good faith.

Reporting Channels: Both internal and external reporting channels are available for reporting suspected breaches of ADGM laws or financial crimes.

Anonymous Reporting: Protection is ensured for those who report misconduct anonymously and in good faith.

Non-Retaliation: Stricter employment regulations safeguard employees across all ADGM entities from retaliation for whistleblowing.

Governance Standards: All ADGM entities must adhere to good governance requirements that support effective whistleblowing practices.

Written policies and procedures: Required for firms licensed by the Financial Services Regulatory Authority, designated non-financial businesses or professions, and large entities within the financial centre.

Requirements for ADGM Entities

• By May 31, 2025, all entities within ADGM must establish proportionate systems to facilitate whistleblowing.
• These systems must be documented, particularly for larger entities and those with higher financial crime risks.

This framework underscores ADGM’s commitment to uphold global business standards and continuously improve its regulatory environment. It provides a solid foundation for maintaining trust and integrity in the financial markets.

ADGM secures the prestigious title of the ‘Most Trusted Financial Center Brand’ in the Middle East, winning the esteemed 2024 Global Brand Award.

On April 2, 2024, the global stage was set alight with the prestigious Global Brand Awards Ceremony, hosted annually by Global Brands Magazine (GBM), bringing together a precious gathering to celebrate international brands that excel across diverse industries. Among the awardees, ADGM stood out, proudly securing the esteemed title of the ‘Most Trusted Financial Centre Brand, Middle East’ for the distinguished year of 2024.

ADGM’s outstanding performance was showcased through GBM’s assessment of factors like Customer Trust, Innovation, Regulatory Compliance, and Brand Value. This recognition emphasizes ADGM’s dedication to excellence and integrity, solidifying its reputation as a trustworthy leader in the Middle East’s financial sector. This recognition from GBM not only acknowledges ADGM’s past successes but also serves as a guiding force directing its future endeavors toward sustained growth and prominence in the global financial arena.

Jay Reddy, Director, Global Brands Magazine mentioned that “We are delighted to recognize ADGM as the winner of the ‘Most Trusted Financial Centre Brand’ in the Middle East. ADGM’s commitment to excellence, innovation, and integrity has positioned it as a beacon of trust and reliability in the region’s financial landscape, setting a benchmark for others to follow.”

Salem Mohammed Al Darei, CEO of ADGM Authority said, “Trust is not just a value but the cornerstone of ADGM’s identity. Being recognized by the reputed Global Brands Magazine as the ‘Most Trusted Financial Centre Brand, Middle East’ underscores the remarkable growth of ADGM and Abu Dhabi as a financial powerhouse, extending our influence beyond regional boundaries. We are on a path to keep soaring high as we set new ambitious goals and elevate Abu Dhabi as the ‘Capital of Capital,’ solidifying its position among the world’s premier international financial centres.”

ADGM: The Financial Powerhouse

Founded on October 21, 2015, Abu Dhabi Global Market (ADGM) serves as the international financial center (IFC) of the United Arab Emirates’ capital city.  In 2023, ADGM emerged as a true financial powerhouse. Positioned as a strategic link between the flourishing economies of the Middle East, Africa, South Asia, and the world, ADGM has elevated Abu Dhabi’s prominence as a leading financial hub and a dynamic business gateway in the region for two consecutive years.

With ADGM’s strategic expansion to Al Reem Island, international companies started embracing this tax-friendly jurisdiction. This development not only strengthens ADGM’s position but also elevates Abu Dhabi’s status as the ‘Capital of Capital’.