Fixed-term contract of 10 years in a Dubai free zone. What’s the actual penalty if I resign early?

Just joined a company in a Dubai free zone (I believe it’s DDA/TECOM-regulated) and my Key Employment Terms list the contract as a fixed term of 10 years. My previous UAE contract elsewhere was a normal 2-year term, so the 10-year length caught me off guard.

Probation is 3 months.

My question is about early resignation. Say hypothetically I need to leave before the 10 years are up, for a better role, family reasons, whatever. I’m trying to understand my actual exposure:

**1.**	Does the length of the fixed term (10 years) affect the early-termination compensation, or is it just a template number tied to the visa/establishment cycle?  
**2.**	I keep seeing conflicting info online. Some sources say the old penalty (roughly 3 months’ pay, or the balance of the remaining term if lower) still applies in many free zones. Others say the 2021 federal law replaced that with a notice-based regime and there’s no automatic penalty. A few even cite “50% of the remaining contract value.” On a 10-year term these obviously give wildly different outcomes. Which actually applies to a DDA/TECOM free-zone contract in 2026?  
**3.**	If I resign **during probation** (within the 3 months) with one month’s notice, is that a clean exit with no remaining-term penalty? My understanding is yes, but I’d like confirmation.  
**4.**	For DDA/TECOM specifically — do they follow the federal labour law on this, or their own employment regulations?

Has anyone here actually resigned early from a long fixed-term free-zone contract? What did it cost you in practice, not just in theory? Trying to separate the scary-sounding clause from the real-world outcome.

Thanks in advance.

Posted Jul 6, 2026, 1:17 PM UTC

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