Limited Term Contract Template for the United Arab Emirates

A Limited Term Contract is your essential legal document for establishing employment relationships in the United Arab Emirates. Under UAE Federal Decree-Law No. 33 of 2021, this contract type became mandatory for all employment on the UAE mainland, replacing the previous unlimited-term contract system. The agreement creates a fixed-duration employment relationship with clear start and end dates, providing certainty for both you and your employee while ensuring full compliance with UAE labor regulations.

When do you need this document?

You need a Limited Term Contract whenever you hire an employee in the UAE mainland, whether you're bringing in new talent from abroad or employing UAE nationals or residents. This includes situations where you're expanding your business operations, hiring for project-based work, or filling temporary positions that require specific expertise. The contract is also required when renewing existing employment relationships, as all UAE employment must now operate under this fixed-term framework. Additionally, you'll need this document as part of the work permit and residency visa application process through the Ministry of Human Resources and Emiratisation (MOHRE).

Key legal considerations

Your Limited Term Contract must specify a maximum duration of three years, after which it can be renewed for similar or shorter periods. The agreement must include mandatory probation provisions, with a maximum six-month probation period during which either party can terminate with one day's notice. You must clearly define the employee's salary, benefits, working hours, and annual leave entitlements in accordance with UAE labor law minimums. The contract should address end-of-service benefits calculations, notice periods for termination, and procedures for contract renewal. Consider including confidentiality clauses, non-compete restrictions (limited to two years maximum), and intellectual property provisions relevant to your business. Ensure the agreement complies with the new unemployment insurance scheme requirements introduced in 2023.

Legal requirements in United Arab Emirates

Under UAE Federal Decree-Law No. 33 of 2021 and Cabinet Resolution No. 1 of 2022, your contract must be written in Arabic, though you can include an English translation for clarity. The document must be registered with MOHRE as part of the work permit process and linked to the employee's residency visa application. You must ensure compliance with minimum wage requirements, maximum working hour restrictions (48 hours per week), and mandatory annual leave provisions (30 days minimum). The contract must specify the employee's job title, workplace location, and reporting structure. For UAE nationals, additional considerations under Federal Law No. 7 of 1999 regarding pension and social security contributions apply. All Limited Term Contracts must now include provisions for the mandatory unemployment insurance scheme administered by the UAE Unemployment Insurance Authority.