Vesting
Vesting refers to the process of earning ownership rights over shares, stock options, or employee benefits over a specific period. In the UAE, startup founders and employees in equity-based compensation agreements commonly use vesting schedules to ensure long-term commitment. Free zones such as DIFC and ADGM allow vesting-based employment contracts, following common law principles for stock option plans (ESOPs). Vesting agreements should clearly define cliffs, timelines, and forfeiture conditions to ensure enforceability.
