Employer of Record in the UAE

With the help of our extensive worldwide network and cutting-edge automated human resource (HR) technology, we can quickly onboard remote staff, handle payrolls effectively, and formalise contracts in complete conformity with local regulations. When you choose to work with us, you may have piece of mind knowing that all HR-related procedures associated with your growth in a new nation are taken care of. Your firm will have a hassle-free experience thanks to our all-inclusive HR solution. Let us handle the challenges so you can concentrate on expanding your company. Get in touch with us to find out more about how we help allay your HR-related worries in the nation where you are looking to expand.

Overview if the UAE

• Population: 9,890,402 people (2020)
• Currency: United Arab Emirates dirham (AED)
• Capital city: Abu Dhabi
• Languages: English, Arabic
• Gross Domestic Product (GDP): USD 353.899 billion (2020)

Employment Landscape in the UAE

Essential Considerations for Hiring in the UAE

Each of the seven federation states has a different set of UAE employment regulations. All employment relationships in the UAE are subject to the labour legislation, with the exception of those involving agricultural labourers, domestic servants, and employees of the public sector. 

Within the federation, the UAE contains 35 free zones where businesses must abide by regulations including capital requirements, foreign ownership, taxation, employment, and profit. The employment laws in Abu Dhabi and Dubai are different from one another. Basic employee privileges such pay, benefits, working hours, paid time off, and federal holidays are shown in the table below.

Employers have certain obligations and rights in the context of the remote working system in accordance with the standards given by the Ministry of Human Resources and Emiratisation (MoHRE). This includes having the power to decide on the working hours for remote workers and having the right to cancel the agreement if any rules or regulations are broken. Employers are accountable for selecting qualified candidates who are suited for remote work and for ensuring fair treatment of both office-based and remote workers. Additionally, in order to ensure comfort and effectiveness, businesses must offer the infrastructure and resources essential for remote working. Employers can provide a friendly and legal environment for remote work by upholding these requirements.

Entitlements	Explanations
Statutory working hours	The required number of hours per week is 48.
Overtime eligibility	The hourly rate for overtime is 125% during the working day and 150% on the weekends and during evening shifts (from 9:00 pm to 4:00 am).
Paid Public Holidays	Employees in the UAE are eligible for the following paid public holidays. Gregorian New Year: January 1 Eid Al Fitr: Ramadan 29 to Shawwal 3 (May 12, 2021, four days) Arafah Day and Eid Al Adha (Feast of Sacrifice): July 19 to July 22, 2021 Hijri New Year (Islamic New Year): Muharram 1, that is, August 12, 2021 Prophet Mohammed’s birthday: October 21, 2021 Commemoration Day: December 1, 2021 (previously known as Martyr’s Day, observed on November 30) National Day: December 2 and 3, 2021
Holiday Pay	Holiday pay is given to an employee in the following situations: The day before or the day after a public holiday is authorized leave, such as annual or medical leave. An employee is given a day of rest and an extra 50% of their daily compensation if they work on leaves or holidays.
Medical Leave	Employees are allowed a maximum of 90 days of sick leave, under the legislation. For the first 15 days, they are paid in full; for the following 30 days, they are paid in half; and for the following 45 days, they are paid nothing. During the trial period, there is no provision for sick days.
Maternity Leave	A woman who has worked for the company for more than a year is eligible for 45 days of paid maternity leave. A woman who hasn’t worked a full year is eligible for paternity leave at half pay. For the first 18 months following childbirth, female employees are allowed two paid rest breaks totaling no more than 30 minutes each. Fathers who are employed are not eligible for paternity leave.
Annual Leave Accrual Entitlement	Depending on how long they have worked for the organization, workers receive yearly leave. The following describes the length of service and leaves: One year to six months – two days every month over a year and 30 days
Leave Expiry	Only one annual leave may be granted every two years.
Accrued Leave At Termination	If an employee leaves their position, they could be compensated for any unused annual leave.
Employee Protection and Anti-discrimination Rights	The UAE has a number of legislations that seek to combat prejudice and discrimination based on race, religion, caste, and ethnicity. Additionally, legislation defining equal pay for women and safeguarding the rights of self-determined individuals have been established.

Contractors vs. Full-time Employees

Prior to this, businesses had trouble sponsoring and legally hiring people for contracts with good pay and work hours. However, the Ministry of Human Resources and Emiratisation (MoHRE) of the UAE passed a law allowing contract or part-time labour in 2018, giving workers a choice. All employment contracts should ideally be in writing and contain explicit conditions such as the start and end dates, the type and location of the job, the pay, and, in the case of short-term contracts, the length of the work.

The use of contractors has benefits. It first provides flexibility since their scope of work may be established on an ad hoc basis, allowing for subsequent contracts in the event that new demands materialise. Contractors frequently operate autonomously and require less oversight, allowing resources to be allocated to other areas as needed. Although hiring contractors may be more expensive up front because they are not eligible for employee perks like bonuses and tax breaks, their longer-term costs may be lower.

However, employing someone full-time has its own benefits. Due to their devotion to your business as their sole employer, full-time employees frequently exhibit loyalty and organisational commitment. Their success is correlated with the effectiveness of the company, which drives them to exert more effort. Additionally, the training-related information and abilities that full-time employees learn stay with the company. The legal flexibility that comes with hiring full-time employees also reduces the possibility of misclassifications because their status is expressly stated in their contracts. The conditions and benefits of full-time work can be established up front and typically cannot be altered unless both parties agree to do so.

Recruiting in the UAE

The process of hiring in the UAE is governed by the Labor Law and various ministerial decisions, with certain regulations favouring UAE nationals. Companies in the UAE have the option to utilise online platforms for hiring, including well-known platforms such as linkedin ,indeed, bayt, and dubizzle . Additionally, companies can advertise job openings on their own websites or through licensed agencies. It is crucial for companies to verify the legitimacy of the platforms and agencies they use for hiring.

When hiring talent through online platforms, it is recommended to conduct personal interviews with candidates before finalising the hiring process. For candidates from outside the UAE, it is important to ensure that they possess the necessary qualifications and professional competence required for the position. It is also essential to adhere to the regulations that prioritise the employment of UAE citizens and ensure that the hiring of foreign candidates does not displace qualified unemployed citizens. By following these guidelines, companies can effectively navigate the hiring process in the UAE while maintaining compliance with the relevant regulations.

What does the concept of remote working entail in the UAE?

After the Covid-19 epidemic broke out, the MoHRE implemented restrictions mandating businesses in the nation to only allow 30% of the workforce to work in offices. The Remote Working System is to be followed by the remainder. These rules apply to all workers in sectors other than health, food, medicine, supply, infrastructure, telecommunications, cleaning, and finance.

To learn how we can hasten the recruiting and onboarding of both full-time and contract employees in the UAE, schedule a demo with us.

Probation & Termination in the UAE

Probation Period

In the UAE, an employee’s probationary term lasts typically three to six months. When an employee is on probation, either the employer or the employee may decide to quit without giving notice.

Termination of Service

The Labor Law in the UAE stipulates that 30 days’ notice is the bare minimum for termination of employment. However, the notice can be totally waived or extended with the consent of both the employer and the employee.

Duration of Employment and Notice Period

• Seven days are longer than six months but not quite a year.
• at least two weeks – One year
• Five years minimum plus one month

EOR Solution

When it comes to establishing a successful enterprise in a foreign country, navigating the complexities of compliance policies can be a daunting task. This is where the expertise of EOR services becomes invaluable, as they streamline the process of global business expansion. Through extensive research and in-depth knowledge of the local laws and HR policies, EOR services accelerate your business growth.

By partnering with an effective EOR service, you gain access to comprehensive management of the entire employee life cycle. They handle intricate HR matters, allowing you to concentrate on your core business objectives. Our UAE EOR solution offers a seamless platform for expanding your business hassle-free. Furthermore, our payroll services encompass essential features such as employee and worker social security, exemption from tax returns, exemption from legal contribution and social security for foreign employees, no corporate tax liability, and local employees benefiting from a 12.5% pension contribution.

With our platform, you can recruit talent from around the globe and enhance your business prospects through a globally distributed team. Our team of knowledgeable professionals will take charge of managing global payroll, ensuring compliance, and handling taxation, relieving you of the burdensome tasks. Reach out to us today and build a proficient global workforce that propels your business forward.

Outsourcing Employment through an Employer of Record

Companies that want to grow in the UAE must be transparent about their employment procedures. They can either form a separate team or employ an EOR to handle the procedure on their behalf.

Types of Visas in the UAE

Visit Visa	Friends, family, or relatives may sponsor someone for a visit visa. They will have to submit an application for admission permission to the Ministry of Interior Affairs or the Department of Immigration.  Following is a list of Visit Types according to Validity: 30-day short-term visit visa 90-day long-term visit visa  You are not permitted to work in the UAE with this permission. When deboarding at the airport, this permission must be in your possession for inspection.
Tourist Visa	Any person or visitor, regardless of their nationality, may apply for a tourist visa to enter the nation. Typically, hotels, authorized travel agents, or airlines sponsor tourist visas. The duration of the holder’s stay in the nation is either 30 or 90 days with a tourist visa. A free visit visa is available to minors under the age of 18 from July 15 to September 15 every year. You are not permitted to work in the nation as a tourist.
Residency Visa	An individual must apply for a residence visa if they want to live in the UAE. A resident visa is valid for two years on the mainland and three years in a free zone. Resident visas are not issued to anyone who tests positive for HIV or TB.
UAE work Visa	This visa is open to foreign nationals who are seeking work or have been chosen for an employment opportunity. For foreigners to be eligible for a work permit, they must possess any of the following credentials or abilities. undergraduate degree an advanced degree in any discipline a diploma from high school
UAE Student Visa	A UAE Student Visa is available to any foreign national who is admitted into a UAE educational institution. The institution where you have been admitted will handle the processing of your entry permit and visa. You must have an entrance visa to enter the UAE. For the course of your studies, you can renew your student visa every year for a total of one year. Students who excel academically and professionally are given the benefit of a student visa with a five-year validity period. Students must have at least a 3.75 GPA from a university inside or outside the UAE and a minimum grade point average of 95% to qualify for a student visa.
UAE Family Visa	The family visa is available to the relatives of UAE nationals and foreigners. For your family members to be granted a visa, you must: A male expatriate should make at least 4,000 AED annually, or 3,000 AED monthly including housing. A female expatriate should earn at least AED 10,000 per year, or AED 8,000 when housing is included. A government health care facility in the UAE must approve a medical test for the foreigners’ family members.
UAE Investment Visa	This visa, which is a form of long-term residency authorization, is available to foreign citizens who invest money in the United Arab Emirates. Investment visas come in two different varieties. A 10-year visa for permanent residency At least AED 10 million should be put into the public sector. One ought to possess particular knowledge. In the fields of electronics, computers, biotechnology, culture, and the arts, people can be physicians or engineers. A five-year visa for permanent residency One should either invest in UAE real estate or run their own business with a minimum capital of AED 500,000. A minimum GPA of 3.75 from any university and a secondary school GPA of 95% is required.
UAE Retirement Visa	Older foreign people with sufficient financial resources who want to retire in the UAE are eligible for this visa. Speak with us to learn more about the different visa categories and UAE work visa requirements. We can take care of all of your visa needs while making sure the expansion process doesn’t get held up.

Work Permits in the UAE

Can we sponsor Work Permits in the UAE?	Yes
Processing time	5 Working days
Work permit process	Here is the procedure for obtaining a work permit. Step 1: At the Ministry of Labor’s online application portal, our EOR service files an application on your behalf. Step 2: The employer provides the necessary paperwork. Step 3: The Ministry reviews the application; if any papers need to be resubmitted or corrected, the authorities may request that you do so. Step 4: The employer can get permission from the website when the Ministry gives its approval.
Work Permit validity	30 Days
When can an employee travel to the UAE?	when the company grants the immigrant an admission permit
What’s the cost of a Residence Visa?	AED 100 to AED 140.
Duration of Residence Visa processing	One to two months

Payrolls & Taxation in the UAE

Essential Information for Establishing Payroll in the UAE

An EOR service offers a streamlined solution for payroll and tax management in the UAE, catering to both foreign and national employees. Many UAE-registered companies choose to entrust their payroll responsibilities to an EOR service, ensuring compliance with tax regulations and immigration requirements.

By leveraging the expertise of an EOR service, companies can optimise their employment processes with enhanced security and confidentiality. This is particularly advantageous for clients who prefer to maintain the confidentiality of their payroll information within their organisation. The comprehensive payroll management services provided by an EOR include various essential tasks such as preparing offer letters, issuing No Objection Certificates (NOCs), managing employee leaves (including paid holidays and sick leaves), facilitating the selection and application of suitable Medical/Health Insurance, assisting with the setup of the wage protection system, calculating statutory gratuity payments in accordance with UAE labour law, and issuing salary certificates, payslips, and bank transfer letters for employees. Additionally, in the event of termination after probation or during probation, the EOR service handles the calculation of end-of-settlement as per UAE labour law.

Taxes in the UAE

Employer Taxation

Financial Year-End Date	No income tax is applied or collected.
Tax Documents	There are no documents that apply.
Corporate Tax	Only international banks and energy corporations are subject to this tax in the UAE. Tax exemptions are available for a longer period of time in the UAE’s free zones.
Withholding Tax (For Non-Residents)	There is no withholding tax to be paid.
Payroll Tax	No payroll tax is owed.
Employers’ Social Security and statutory contributions	17.5% is the social security rate.

Employee Taxation

Sales Tax	50%
Income Tax	The income is not taxed.
Tax Returns	No tax returns must be filed because there is no individual tax in the UAE.
Employee Social Security and statutory contributions	The social security contribution rate for workers is 5%.

Bonuses

The United Arab Emirates do not have any laws governing bonuses. But at the conclusion of a year of work, employees are routinely awarded 13th and 14th month bonuses.

As a legal necessity for businesses to operate in the UAE, expanding your business there demands the creation of a subsidiary. There are various procedures involved in creating a subsidiary in the UAE.

The place where the holding company will be incorporated should be chosen initially. It is preferable to work with a local partner that can offer insightful advice and support in this area.

The next step is to choose the entity type that best fits your company. A private corporation and a public limited company are both possibilities. Selecting the entity type that best suits your company’s needs is essential because each is subject to different legal obligations.

Even though the subsidiary will function independently, the foreign business will continue to be a shareholder and have voting rights over the subsidiary. A foreign firm that registers a subsidiary in the UAE will run that subsidiary within the UAE’s legal system and approved business structures.

Public and private businesses are the most popular ways to create a subsidiary in the United Arab Emirates. As an alternative, international businesses can establish free-zone corporations as subsidiaries in the UAE’s free zones. Free Zones provide businesses with a variety of advantages and tax perks. A subsidiary is subject to tax laws that benefit both the parent firm and the local market.

Setting up a subsidiary in a UAE Free Zone doesn’t call for a local partner or sponsor, and the procedure takes very little time and administrative work. It is simple and fast to register a subsidiary in the UAE because the procedure is comparable to that of a foreign firm.