ADGM

The Abu Dhabi Global Market — Abu Dhabi's financial free zone established in 2015, operating under its own English-common-law-based legal system, with distinct employment regulations, ADGM Courts as the dispute forum, and its own mandatory workplace-savings scheme replacing federal end-of-service gratuity.

Detailed Definition

The Abu Dhabi Global Market (ADGM) is Abu Dhabi's international financial free zone, established under Abu Dhabi Law No. 4 of 2013 and operationally launched in 2015. Located on Al Maryah Island in central Abu Dhabi, ADGM has rapidly developed into a significant global financial centre and has progressively expanded its sectoral remit beyond pure financial services to include holding companies, family offices, fintech, virtual assets, and increasingly broader corporate-services activities. For HR practitioners, the most important fact about ADGM — as with DIFC — is that its employees operate outside the federal MoHRE-jurisdiction Labour Law, under a self-contained English-common-law-based regulatory regime with its own employment regulations, dispute resolution forum, and mandatory workplace savings scheme.

**Legal system architecture.** ADGM operates a three-pillar regulatory structure: (1) ADGM Registration Authority — responsible for company registration, licensing, immigration, and the employment-law framework. (2) Financial Services Regulatory Authority (FSRA) — the financial-services regulator overseeing banking, securities, asset management, insurance and increasingly virtual assets. (3) ADGM Courts — independent English-language courts established to resolve civil and commercial disputes including employment matters, applying common-law principles and ADGM-enacted regulations. ADGM Court decisions are enforceable across the UAE under reciprocity arrangements and internationally through the Hague Convention.

**ADGM Employment Regulations.** The current framework is the ADGM Employment Regulations 2019 (as amended in 2020 and 2024), superseding earlier versions and modernising regulation in line with international best practice. Major provisions: (1) Mandatory written employment contract with prescribed minimum content. (2) Probation period up to 6 months. (3) Working hours capped at 48 per week, with overtime regulation. (4) Annual leave minimum of 20 working days per full year of service. (5) Sick leave entitlement of up to 60 working days per year (with paid/unpaid split). (6) Maternity leave 65 working days; paternity leave 5 working days. (7) Specific provisions on whistleblower protection, anti-discrimination across protected characteristics, anti-harassment, and equal treatment. (8) Notice period scaled to tenure (typically 30 days, scaling with service). (9) Mandatory workplace savings scheme (see below). (10) Disputes resolved through ADGM Courts. (11) Streamlined immigration sponsorship through ADGM Registration Authority.

**ADGM Workplace Savings Scheme.** Like DIFC's DEWS, ADGM has implemented a mandatory defined-contribution savings scheme that replaces traditional end-of-service gratuity for ADGM-employed workers. Employers must enrol employees in an approved qualifying scheme — Mercer Global Investment Manager (GIM) is the most commonly used master scheme, with additional approved providers. Contribution rates broadly mirror DEWS: 5.83% of basic salary per month for employees with up to 5 years of service, and 8.33% per month for employees with 6+ years. Contributions are paid into a master trust managed by approved trustees and invested through the chosen scheme provider. Vesting is immediate, the balance is portable across approved schemes, and on separation the employee can withdraw, transfer, or roll into another arrangement. The scheme replaces (rather than supplements) Article 51 gratuity — ADGM employees do not accrue both.

**Differences from federal UAE Labour Law.** The same general differences that apply to DIFC apply to ADGM: leave is 20 working days vs 30 calendar days; notice scales with tenure rather than being fixed by contract; end-of-service is funded through the workplace-savings scheme rather than accrued as gratuity liability; termination has its own statutory framework with unfair-dismissal remedies; dispute resolution is in ADGM Courts rather than MoHRE labour court. Some ADGM-specific differences from DIFC are also worth noting: ADGM's regime is broadly aligned with England's Employment Rights Act 1996 in structure and remedy types, while DIFC's regime draws more heavily from international common-law norms with some bespoke modifications.

**ADGM visa and immigration.** ADGM operates its own immigration channel through the ADGM Registration Authority, separate from MoHRE-jurisdiction immigration. ADGM entities sponsor employees directly for residency visas, with streamlined processing typically faster than federal channels. Labour-card concept does not apply — employees hold residency visas linked to their ADGM employer.

**ADGM Courts as the dispute forum.** Employment disputes are resolved through the ADGM Courts, operating in English and applying common-law principles informed by English employment-law jurisprudence. The ADGM Small Claims Tribunal handles smaller claims with streamlined procedure; the ADGM Court of First Instance handles larger or more complex matters; ADGM Court of Appeal handles appeals. Decisions are typically delivered with detailed written reasoning aligned with English law standards. Parties can also choose ADGM Arbitration Centre for arbitration of employment disputes where the contract permits.

**Sectoral focus.** ADGM has historically attracted a particular concentration of (1) Asset managers and family offices — drawn by ADGM's robust trust law, foundations regime, and investor-friendly framework. (2) Banks and financial institutions — drawn by FSRA regulation and proximity to Abu Dhabi government finance. (3) Fintech and virtual-assets firms — ADGM was an early mover in virtual-assets regulation with the Virtual Asset Activities framework, attracting cryptocurrency exchanges, digital-asset custody, and tokenisation businesses. (4) Insurance and reinsurance — including captive insurance structures. (5) Holding companies and corporate structures — increasingly used as a regional headquarters jurisdiction. The ADGM-licensed firm count has grown rapidly through the 2020s.

**Compliance for ADGM employers.** Operating an HR function in ADGM requires: (1) ADGM-compliant written employment contracts. (2) Workplace savings scheme enrolment and monthly contribution. (3) Annual filings with ADGM Registration Authority on headcount and other prescribed information. (4) Adherence to ADGM working-time, leave, anti-discrimination and anti-harassment rules. (5) Updated employee handbook reflecting ADGM-specific provisions. (6) Familiarity with ADGM Court procedures in case of dispute. (7) Coordination with the ADGM business operations on visa, immigration and licensing matters.

**Multi-jurisdiction employers.** Many UAE employers run both ADGM and non-ADGM entities. HR systems must distinguish per employee which jurisdiction applies and administer the right contract format, leave entitlement, end-of-service mechanism, and dispute forum. Employees transferring between ADGM and non-ADGM entities of the same group typically have their workplace savings/gratuity calculated at the boundary, with ADGM tenure tracked under the workplace savings scheme and any subsequent non-ADGM tenure tracked under Article 51 gratuity (or vice versa).

**ADGM strategic positioning.** ADGM offers employers (1) English-common-law contract framework familiar to global firms, (2) FSRA regulation aligned with international financial-services standards, (3) tax neutrality on most ADGM activity (subject to UAE's emerging corporate-tax framework), (4) ADGM Courts as a predictable English-language forum, (5) workplace savings scheme as a clean alternative to traditional gratuity. For employees, ADGM offers (1) portable workplace-savings benefit, (2) stronger statutory employment protections in some categories, (3) English-language dispute resolution, (4) often higher compensation norms reflective of financial-services roles.

**ADGM and Federal Decree-Law No. 33 of 2021.** While ADGM has its own Employment Regulations, certain aspects of federal labour policy (notably anti-discrimination principles, whistleblower protections, and certain core statutory rights) align broadly with federal directions. The two regimes are independently administered but conceptually convergent.

**Common compliance traps.** First, applying federal UAE Labour Law to an ADGM employee — the rules are different and the registered jurisdiction governs. Second, accruing Article 51 gratuity for an ADGM employee on top of workplace-savings contributions — only the workplace savings scheme applies. Third, missing the prescribed monthly contribution to the workplace savings scheme. Fourth, treating an ADGM employment dispute as a MoHRE matter. Fifth, mismatching ADGM-leave (20 working days) and federal-leave (30 calendar days) calculations.

**Automation through Peoplifi.** Peoplifi supports ADGM employers with ADGM-compliant employment contract templates, workplace savings scheme contribution calculation and integration with approved trustees, ADGM-specific leave and notice rules, ADGM discrimination/whistleblower-policy administration, and parallel handling of multi-jurisdiction employers running both ADGM and federal entities. Reporting outputs are ADGM-formatted for Registration Authority filings, and dispute documentation is configured for ADGM Court procedures.

Automate ADGM with Peoplifi

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