Employer of Record in the UAE: A Comprehensive Guide for 2026

Introduction

The UAE private sector is governed by Federal Decree-Law No. 33 of 2021, enforced by the Ministry of Human Resources and Emiratisation (MoHRE). The mainland follows federal law, while the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) run their own separate employment frameworks.

A DIFC or ADGM entity follows a different legal framework from the mainland, with its own contract and termination obligations. Social security totals 26% for UAE and Gulf Cooperation Council (GCC) nationals, while expatriates receive end-of-service gratuity that accrues from year one and must be settled at every contract’s end.

Without a registered UAE entity and an MoHRE establishment card, a foreign company cannot file a single work permit. An Employer of Record (EOR) in the UAE removes that barrier, acting as the legal employer so foreign companies can hire without registering a local entity.

This guide covers UAE employment contracts, statutory entitlements, contractor classification, termination rules, work permits and visas, payroll, and how an EOR supports compliant UAE hiring.

UAE at a glance

Population: 11.67 million

Currency: UAE Dirham (AED)

Capital: Abu Dhabi

Languages: English, Arabic

GDP: 552.3 billion USD

How does employment regulation work in the UAE?

Employment in the UAE private sector is governed by Federal Decree-Law No. 33 of 2021 (UAE Labour Law). It sets the minimum standards for contracts, pay, working hours, leave, and end-of-service, and the Ministry of Human Resources and Emiratisation (MoHRE) enforces it.

The labor law is applicable to every employment relationship throughout the UAE, covering UAE nationals and expatriates, excluding government employees, members of the armed forces, police and security, and domestic workers.

The two financial free zones, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), run their own employment regulations, while the mainland and other free zones follow the federal law.

What are the types of employment contracts?

Under the 2021 law, all private-sector employment contracts are fixed-term (definite). The older indefinite contract was abolished, and existing contracts were moved onto fixed terms.

A definite contract runs for the period the two sides agree on and can be renewed. The law also recognises several work models, including full-time, part-time, temporary, and flexible work.

What are the statutory employee entitlements in the UAE?

Every private-sector employee is owed a set of statutory minimums.

What are the UAE public holidays in 2026?

Public holidays are separate from annual leave and apply to both the public and private sectors. The government publishes the Islamic holidays by their Hijri dates and confirms the Gregorian dates by moon sighting closer to the time, so the 2026 dates below are the expected ones. Work on a public holiday earns a substitute rest day or the day's basic wage and 50%

What is the difference between contractors and full-time employees?

The difference comes down to how the worker is authorized and engaged. In the UAE, anyone who works needs a valid work permit from the Ministry of Human Resources and Emiratisation (MoHRE), and the type of permit sets the status. An employee is recruited on an employer-sponsored work permit and an employment contract. A contractor holds their own freelance work permit and works independently.

In the UAE, every worker needs a Ministry of Human Resources and Emiratisation (MoHRE) work permit, and the type of permit determines their legal status. Directing a freelance permit holder like an employee, or engaging someone without work authorization, creates direct exposure to MoHRE penalties.

Whether you engage contractors for project-based work or hire full-time employees for ongoing roles, each model carries different authorization and compliance obligations. Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labor laws across supported markets
• Facilitates statutory contribution workflows covering applicable social insurance and pension obligations
• Supports payroll processing in 70+ currencies with automated tax withholding and year-end reconciliation
• Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
• Assists with termination and offboarding, including notice periods and severance calculations as required locally

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing
• Helps flag classification risk before it becomes a compliance issue with built-in worker classification checks
• Facilitates multi-currency payouts across 70+ currencies
• Helps manage contractor records, contracts, and payment history from a single dashboard alongside full-time employees

Full-time or contractor, Skuad supports both. See pricing.

What are the key things to know about hiring in the UAE?

Most of the UAE workforce is expatriate, so hiring usually means sponsoring a foreign national for a work permit and residence visa, which the work permit section below covers. Employers source candidates through online platforms such as LinkedIn, Indeed, Bayt, and Dubizzle, or through licensed recruitment agencies.

Two things stand out for a foreign employer. Emiratisation, the quota for hiring UAE nationals, and the checks a foreign hire must clear before starting.

What is Emiratisation?

Emiratisation is the UAE's policy requiring private-sector companies to employ UAE nationals in skilled roles. It applies to mainland companies registered with MoHRE that have 50 or more employees, which must raise the share of Emiratis in skilled jobs by 2% a year, reaching 10% by 2026.

Non-compliant companies pay a monthly financial contribution for each skilled position left unfilled by an Emirati, set at AED 10,000 a month from 1 July 2026.

Two wage rules also apply for 2026. The minimum wage for an Emirati in the private sector is AED 6,000 a month from 1 January 2026, and from 1 July 2026 an Emirati paid below that no longer counts toward the quota. For a foreign employer building a UAE team, this is a real cost and planning factor.

What checks must a foreign hire clear?

The passport must be valid for at least six months, degree certificates obtained outside the UAE must be attested, and every expatriate is tested for communicable diseases such as HIV and tuberculosis before the residence visa is issued. Except for GCC nationals, a residence visa is mandatory for anyone who wants to work in the UAE.

Emiratisation applies to mainland companies along with a monthly contribution. Every foreign hire must also clear degree attestation and a medical fitness test before a residence visa is issued.

Skuad supports background checks as part of the hiring workflow, covering identity verification, employment history, criminal records, and education credentials, so you have a clear picture of who you are onboarding before contracts are signed.

What are the probation and termination rules in the UAE?

Probation must not exceed six months, and it cannot be extended for a further term. If the worker stays on after probation, it is counted as part of the total service.

Notice during probation depends on who ends the contract:

• An employer ending the contract gives 14 days' prior written notice.
• A worker moving to another employer inside the UAE gives at least one month's written notice, and the new employer compensates the current employer for recruitment costs unless the two sides agree otherwise.
• A worker leaving the job and the UAE gives 14 days' written notice.

An UAE employment contract can end for a legitimate reason, with written notice. The minimum notice period is 30 days, and the two sides may agree a longer one, up to a cap of 90 days.

The worker keeps full wages through the notice period, and whichever side fails to serve notice pays the other a notice-period allowance. Notice can be shortened or waived only by mutual agreement.

Beyond ordinary notice, an employer can dismiss a worker without notice only on specific grounds set out in the law, such as forged documents, gross misconduct, or unexplained absence beyond the statutory limit, and only after a written investigation. A worker can likewise leave without notice, keeping end-of-service entitlements, if the employer breaches its obligations.

How is end-of-service gratuity calculated in the UAE?

Expatriate workers do not build up a UAE state pension, so end-of-service gratuity is the main lump sum they receive when a job ends. A worker becomes eligible after one continuous year of service, and nothing is due below one year.

The calculation runs on basic salary:

• 21 days' salary for each year of the first five years.
• 30 days' salary for each year after the first five.
• Total gratuity capped at two years' wage.

Termination in the UAE requires written notice under Federal Decree-Law, full wage payment through the notice period, and an end-of-service gratuity settlement for every expatriate employee from the first year of continuous service. The gratuity runs on top of this, and an incorrect settlement creates direct financial liability for the employer.

Skuad's Shield compliance layer helps your team stay aligned with termination and offboarding obligations across supported markets, without independently tracking every regulatory update. Here is what Skuad supports:

• Termination and offboarding support aligned with local labor requirements across supported markets
• Notice period and severance calculations in line with statutory obligations
• Employment documentation and record-keeping that supports compliant offboarding
• Monitoring of regulatory and labor law changes across supported markets
• Probation period tracking and contract management within a single platform

Why use an EOR in the UAE for hiring?

Every foreign hire in the UAE needs an employer-sponsored work permit, a residence visa, and wages have to run through the Wage Protection System. Contracts must be fixed-term and registered with MoHRE, and each role carries statutory costs such as end-of-service gratuity.

Setting up a mainland or free zone entity to handle all of this takes time and ongoing administration. An Employer of Record (EOR) is a company that already holds a UAE entity and acts as the legal employer of a worker on another company's behalf. The hiring company directs the person's day-to-day work, and the EOR helps with employment that needs a local entity and an MoHRE file.

An EOR in the UAE typically supports the following:

• Work permit and residence visa sponsorship for each foreign hire, through its own MoHRE-registered entity.
• Fixed-term employment contracts drafted and registered to meet the 2021 Labour Law.
• Payroll through the Wage Protection System, paid on time and matched to the registered contract.
• Statutory entitlements, including annual leave, sick leave, maternity and parental leave, and end-of-service gratuity.
• Notice, termination, and final settlement within the timelines the law sets.
• Ongoing compliance as rules change, including Emiratisation obligations once a company's UAE headcount brings it into scope.

Skuad acts as the legal employer across 160+ countries, so your company can hire in the UAE and support statutory requirements without setting up a local entity first. Here is what Skuad helps with:

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Employment contract generation aligned with local labor laws and statutory requirements across supported markets
• Statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Payroll processing in 70+ currencies with accurate tax withholding and statutory deductions
• Work permit and visa support for foreign nationals joining your team
• Termination and offboarding support aligned with local labor requirements across supported markets

See how Skuad supports EOR hiring in the UAE.

What are the types of visas in the UAE?

The UAE issues many visa categories, including tourist, visit, and student visas, but the ones that matter for hiring are the employer-sponsored employment visa, the long-term Green and Golden visas for skilled talent, and family visas for dependents.

What is the work permit process in the UAE?

A foreign national needs a MoHRE work permit to work in the UAE legally. Since the UAE introduced the Work Bundle, the work permit, residency visa, medical fitness test, and Emirates ID are handled through one integrated platform.

The process runs in four stages:

1. The employer files the work permit application with MoHRE through the Work Bundle, with the job offer, employment contract, and the worker's documents.
2. Once MoHRE approves it, an employment entry permit is issued so the worker can travel to the UAE.
3. The worker enters the country and completes the in-country steps, the medical fitness test, and Emirates ID biometrics.
4. The residence visa is issued and the work permit activated, after which the worker can start legally.

Working in the UAE without a valid MoHRE work permit is illegal, and the employer bears the full cost and sponsorship responsibility for every permit, ranging from AED 250 to AED 3,450 depending on their MoHRE classification tier.

Skuad's global immigration platform helps support the work permit and visa process for foreign nationals joining your team, so your HR team does not need to track each step independently. Here is what Skuad helps with:

• Supporting work permit and visa applications for foreign employees joining your team
• Helping coordinate immigration documentation with relevant local authorities
• Assisting with visa conversions and work permit renewals as required by local immigration law
• Helping track documentation requirements and deadlines across the full permit lifecycle
• Helping keep your team aligned with compliance requirements as immigration rules and sponsor duties evolve

How do payroll and taxes work in the UAE?

The UAE has no personal income tax, so nothing is withheld from salaries for income tax, and employees file no personal tax returns. Pay wages through the Wage Protection System, contribute to social security for any UAE-national staff, and accrue end-of-service gratuity for expatriate staff. Business-level taxes (corporate tax and Value-Added Tax VAT) sit alongside payroll but are not deducted from pay.

Do employers pay social security in the UAE?

Social security applies to UAE and GCC nationals only. Expatriate employees are not part of it, and they receive an end-of-service gratuity instead.

For a UAE national hired into the private sector, the total pension contribution is 26% of the employee’s salary. The employee pays 11%, the employer pays 15%, and the government covers 2.5% when the salary is under AED 20,000.

Abu Dhabi runs its own fund with separate rules. Since most hires through an EOR are expatriates, in practice, this contribution applies only when a company employs a national.

How does payroll get paid in the UAE?

Salaries run through the Wage Protection System, the electronic channel MoHRE uses to confirm workers are paid in full and on time. Beyond that, the employer issues payslips, accrues end-of-service gratuity for expatriate staff, and registers any UAE-national employees for pension contributions.

The UAE has no personal income tax, but employer costs still run above gross salary. Social security applies to UAE nationals in the private sector, and wages must clear the Wage Protection System on time each month.

Skuad's employee cost calculator helps estimate the cost of hiring across supported markets, including employer social and statutory contributions, accrual obligations, and net-to-gross conversion, so finance teams can model headcount costs before committing to a hire.

How to set up a subsidiary in the UAE?

Setting up a subsidiary means registering a UAE company that the foreign parent owns and controls. There are two routes, the mainland and the free zones, and the right one depends on where the business needs to operate and who it needs to sell to. The bigger shift in recent years is ownership: A foreign company can now fully own a mainland company for most activities, so the old local-partner requirement no longer applies in most cases.

What is the difference between the mainland and a free zone?

The choice sets the regulator, the ownership rules, and the extent to which the company can trade.

A short list of strategic sectors still requires UAE national participation or additional approval, so the activity should be checked against the current list before the route is chosen.

What are the steps to incorporate a subsidiary in the UAE?

1. Choose the jurisdiction, mainland or free zone, based on where the business needs to trade.
2. Select the business activity and legal form, for example an LLC on the mainland.
3. Reserve a trade name and apply for initial approval from the licensing authority. Foreign investors clear the General Directorate of Residency and Foreigners’ Affairs (GDRFA) approval before initial approval.
4. Draft and notarise the Memorandum of Association.
5. Secure office space and register the tenancy, which in Dubai means an Ejari-registered lease.
6. Collect the trade licence from the Department of Economic Development on the mainland or from the free zone authority.
7. Complete post-licensing registrations: Corporate tax, VAT if turnover requires it, the MoHRE establishment card to hire staff, and a corporate bank account.

Setting up a mainland entity in the UAE means clearing Department of Economic Development registration, notarised Memorandum of Association documents, an MoHRE establishment card, and Ejari-registered office space before a single work permit can be filed. A free zone setup is faster but restricts mainland trade, often requiring a local distributor for UAE market access.

For teams that need to hire in the UAE without that commitment, Skuad acts as the legal employer, so you can onboard employees without incorporating a local entity.

Customer story: How did OpenSolar scale internationally with Skuad?

OpenSolar is a solar energy and cleantech company focused on accelerating the global shift from fossil fuels to renewable energy. As the company expanded into multiple markets across APAC and EMEA, they needed a way to hire and onboard across borders without building local entities in each market. Skuad supported its international expansion through its EOR platform, helping with compliant cross-border onboarding and workforce management.

Skuad has been a key partner in our international expansion. Their onboarding process and compliance support have allowed us to focus on our core mission: to accelerate the world's transition from fossil fuels to solar energy.

• Lavinia Davison, Global Head of Talent & Operations, OpenSolar

Read the full case study.

What is a Professional Employer Organization (PEO) in the UAE?

A Professional Employer Organization (PEO) manages HR functions for a company, such as payroll, employee benefits, and day-to-day administration. A PEO acts as a co-employer, while an EOR acts as the legal employer. In a co-employment setup, the PEO shares employer responsibilities with the company rather than taking them over entirely.

What is the difference between a PEO and an EOR?

Working with a PEO means the company keeps its own legal entity in the country, and the PEO supports it on HR and payroll. Working with an EOR means the company can hire straight away, because the EOR acts as the legal employer.

Every worker's work permit is tied to a single registered employer, so a PEO arrangement only works when the company has its own UAE entity to hold those permits. A company without an entity that still wants to hire uses an EOR.

Ready to hire in the UAE without registering an entity?

The UAE is one of the few markets where employees have no personal income tax deducted, which makes it attractive for talent. The hardest part is getting someone on payroll in the first place.

Every hire needs an MoHRE work permit, a sponsored residence visa, and wages processed through the WPS before they can start. Contracts are fixed-term only, gratuity accrues from year one, and Emiratisation quotas apply the moment your headcount hits 50.

Without a UAE entity already in place, none of these are straightforward for a foreign employer to set up independently. An EOR takes on the legal employer role, so you can bring someone on board without first going through entity registration and licensing.

The next step is to align your hiring plans and evaluate how an EOR setup can support your expansion into the UAE in a structured and compliant way.

Start hiring in the UAE without entity setup. Book a demo.

FAQs

1. What is an Employer of Record (EOR) in the UAE?

An Employer of Record (EOR) in the UAE is a company that holds a UAE entity and MoHRE file and employs staff on your behalf. It supports the work permit and residence visa process, helps with the Wage Protection System payroll, and supports gratuity accrual and compliance, so you can hire without your own entity.

2. Can a foreign company hire in the UAE without a local entity?

Without a UAE entity and an MoHRE establishment card, a foreign company cannot file a work permit, so direct hiring means setting up locally first. Using an Employer of Record (EOR) removes that step, as the EOR acts as the legal employer, sponsors the visa, and processes payroll, while you manage the work.

3. How is end-of-service gratuity calculated in the UAE?

End-of-service gratuity is the lump sum an expatriate employee receives when a job ends, since expats build no UAE state pension. After one year, it accrues at 21 days of basic salary per year for the first five years, then 30 days per year, capped at two years' basic salary.

4. Do employers pay social security in the UAE?

Social security in the UAE applies only to UAE and Gulf Cooperation Council (GCC) nationals, through the General Pension and Social Security Authority (GPSSA), with employer and employee contributions. Expatriate employees are not included, and they receive end-of-service gratuity.

5. How does an EOR differ from a PEO in the UAE?

An Employer of Record (EOR) acts as the legal employer using its own UAE entity, so you can hire with no entity of your own. A Professional Employer Organisation (PEO) is a co-employment model, which only works if your company already holds a UAE entity to sponsor the work permits.

6. How quickly can an EOR onboard a hire in the UAE?

Onboarding depends on whether the worker already has UAE work rights. A new foreign hire needs an MoHRE work permit and residence visa, handled through the Work Bundle in around five working days. Through an EOR that holds the entity and MoHRE file, onboarding is faster than building your own.