Worldwide Regulatory Monitor for Artificial Intelligence
The United Arab Emirates (UAE) is rapidly emerging as a global hub for artificial intelligence (AI) innovation. Here's a look at the key developments shaping the AI landscape in the UAE.
Mainland UAE
The UAE government is enhancing its AI business ecosystem with regulatory clarity. Notably, the UAE Cabinet Decision No. 35 of 2025 revises tax nexus rules, affecting foreign AI companies with physical infrastructure in the UAE. However, pure software development, AI consulting, and cloud services delivered from outside the UAE do not trigger tax obligations under these rules.
Starting an AI business in the Mainland typically requires licenses related to AI software development, robotics, cloud AI services, algorithm training, and sometimes an E-Commerce license if SaaS or AI products are delivered online. Several Mainland free zones offer innovation or AI-specific licenses to facilitate R&D and deployment.
Financial Free Zones (DIFC and ADGM)
The DIFC and ADGM operate under their own comprehensive data protection laws, closely aligned with the EU’s GDPR. Businesses in these zones must comply primarily with these local data regulations but also consider interoperability with the federal PDPL when transferring data to/from the Mainland.
DIFC and ADGM provide innovation-friendly environments and specific licensing frameworks suitable for AI companies, including those offering SaaS or AI-related digital products, often requiring an E-Commerce or Innovation/AI license.
AI Regulations in the UAE: An Overview
While the UAE itself does not have an overarching AI-specific regulation like the EU AI Act, it focuses on data protection, tax, and licensing frameworks adapted for AI companies in each jurisdiction within the country.
The UAE has published non-binding national guidelines on AI, such as The Deepfake Guide (2021), The AI Ethics Guide (2022), and The AI Adoption Guideline in Government Services (2023). The UAE launched a new AI charter in 2024, aimed at supporting its AI strategy for 2031 and focusing on human wellbeing, safety, privacy, and transparency in AI development and use.
The UAE lacks a specific law for trade secret protection, but its legal framework could potentially safeguard AI-related trade secrets through a combination of provisions in various legislation.
AI Regulations in the Emirates
Certain emirates, such as Abu Dhabi and Dubai, have announced the establishment of government bodies responsible for developing AI use in their respective emirates. Various UAE government entities have begun implementing industry/sector-specific regulations, such as the Abu Dhabi Department of Health's Policy on the Use of Artificial Intelligence in the Healthcare Sector and the Central Bank of the UAE's Guidelines for Financial Institutions adopting Enabling Technologies.
UAE's Focus on AI
The UAE's guidelines predominantly aim to establish best practices with respect to the use of AI technology. There is an expectation that in the coming years, certain best practices and principles will develop, shaping a more robust regulatory framework to govern the use and deployment of AI in the UAE.
In November 2021, financial services regulators jointly issued the Enabling Technologies Guidelines, which include suggested governance frameworks for various technologies, including AI. The UAE Council for Artificial Intelligence and Blockchain has been established to oversee the integration of AI throughout the UAE government and "review national approaches to issues such as data management, ethics, and cybersecurity".
While there are no specific legally binding obligations imposed on developers, users, operators, and deployers of AI systems in the UAE, the DIFC has amended its data protection legislation to capture AI-related developments, with Article 10 of the DIFC Data Protection Regulations governing "Personal Data Processed Through Autonomous and Semi-Autonomous Systems."
In summary, the UAE is actively shaping its AI landscape with a focus on licensing, data privacy, tax nexus, and innovation support. While there is no single overarching AI-specific regulation, the country is moving towards establishing best practices and principles that will underpin a robust regulatory framework for AI in the future.
- The UAE government is enhancing its AI business ecosystem with regulatory clarity, revising tax nexus rules for foreign AI companies with physical infrastructure.
- Mainland free zones offer innovation or AI-specific licenses for R&D and deployment, requiring AI software development, robotics, cloud AI services, algorithm training, or E-Commerce licenses.
- The DIFC and ADGM have data protection laws similar to the EU’s GDPR, with businesses complying with local regulations and considering federal PDPL interoperability.
- DIFC and ADGM provide licensing frameworks for AI companies offering SaaS or AI-related digital products, often requiring an E-Commerce or Innovation/AI license.
- The UAE lacks an overarching AI-specific regulation, focusing instead on data protection, tax, and licensing frameworks adapted for AI companies.
- The UAE has published national guidelines on AI ethics, use, and adoption in government services, launching a new AI charter in 2024.
- The UAE could safeguard AI-related trade secrets through a combination of provisions in various legislation, with no specific law for trade secret protection.
- Certain emirates, like Abu Dhabi and Dubai, have established government bodies to develop AI use in their respective emirates and implement industry/sector-specific regulations.
- The UAE focus is to establish AI best practices regarding technology use, shaping a more robust regulatory framework for AI in the future.
- The DIFC data protection legislation has been amended to capture AI-related developments, with Article 10 governing "Personal Data Processed Through Autonomous and Semi-Autonomous Systems."
- The UAE's AI landscape is being actively shaped, emphasizing licensing, data privacy, tax nexus, and innovation support towards a future robust regulatory framework for AI.
