Employer of Record in the UAE
Skuad’s strong global network and an automated human resource (HR) platform ensure quick onboarding of remote teams, managing their payrolls, and formalizing contracts in compliance with the local laws. Learn more about how, with Skuad, you do not have to worry about a thing related to HR tasks in the country of your expansion.
UAE at a Glance
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 in the UAE
What You Must Know Before Employing in the UAE
The UAE employment laws vary in all the seven federation states. The labor law is applicable for every employment relationship throughout the UAE, excluding agricultural workers, domestic servants, and the public sector.
The UAE has 35 Free Zones within the federation where companies need to operate under laws based on taxation, foreign ownership, employment, profits, and capital. The two Free Zones, Abu Dhabi and Dubai, have separate employment legislation. The table below enlists basic employee entitlements such as employee benefits, working hours, paid time-offs, and national holidays.
Duties and Rights of the Employer in the Remote Working System: MoHRE
- Employers can choose the working hours for remote working employees.
- Employers hold the right to abolish the remote working system at any point if the employee breaks any rules or regulations.
- Employers are required to hire competent employees who are qualified to take up the job remotely.
- Employers are required to specify whether a particular job opening is suitable for remote working.
- Employers are required to treat both remote working and in-office employees fairly.
- Employers are required to provide any necessary tools and systems to employees to ensure ease in remote working.
Learn more about employment laws and employment agreements in the UAE from Skuad experts.
Contractors vs. Full-time Employees
Until now, it was difficult for companies to sponsor and legally employ people on a contract that could offer an income and schedule favorable for the employee. The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) issued a statute in 2018 and allowed part-time work or contract-based work, providing a feasible option for employees.
In general, all employment contracts must preferably be in writing and should specify the following terms.
- The starting date
- The date of conclusion
- The kind of work
- The location of work
- The remuneration
- The duration of work, for short-term contracts
- Flexibility: Since contractors are hired on a short-term basis, you are free to determine the scope of their work temporarily. If new needs arise, further contracts can be drafted in the short term.
- Independence: Short-term contractors usually work independently. They do not require close supervision, and your resources can be transferred elsewhere, as needed.
- Cost: Hiring contractors may be cheaper in the long run, although their individual rates are higher than those of full-time employees. This is because such employees are not entitled to employment benefits such as bonuses and tax compensations.
- Loyalty and organizational commitment: Full-time employees are likely to be more loyal as they exclusively work for your company. As their individual success depends on the performance of your firm, they are likely to invest more effort into their work.
- Knowledge: All employees undergo training when they join a firm. The skills and knowledge gained by a full-time employee, however, stay within the organization.
- Legal freedom: Since full-time employees are defined as such in their contracts from the outset, misclassifications can be avoided completely. When hiring full-time employees, you determine the terms of the contract and entitlements, and these are not liable to change unless mutually decided by both parties.
Thus, companies can hire employees who work according to schedules or contract-based employees with flexible schedules. Why engage yourself in the arduous process of formalizing employment contracts when Skuad can do it for you? Contact Skuad’s experts to help you deal with full-time and contractual employment.
Hiring in the UAE
The Labor Law and other ministerial decisions govern hiring in the UAE. The majority of laws favor UAE nationals over other nationalities. Hiring employees in the UAE can be done through various online platforms, including,
A company can also place advertisements on its website or through agencies. The company should ensure that the platforms through which they are hiring are completely legitimate and the agencies are licensed.
While hiring talent through online platforms, it is essential to conduct personal interviews before onboarding them. When hiring from outside the UAE, you must ensure that the candidates are worthy of the job and no unemployed citizens can replace them. The foreigners applying for the job must have appropriate qualifications and professional competence to fill in the position.
What is the Remote Working System in the UAE?
With the onset of the Covid-19 pandemic, MoHRE issued regulations requiring companies in the country to allow only 30% of the workforce in the office. The rest are to follow the Remote Working System. Employees from all industries other than health, food, medicine, supply, infrastructure, telecommunications, cleaning, and finance come under these regulations.
Book a demo with us to understand how we can help expedite the hiring and onboarding of both full-time and contractual employees in the UAE.
Probation & Termination in the UAE
The probation period for an employee in the UAE is usually three to six months. During the probation period, either the employer can terminate the employee, or the employee may choose to leave without any notice period.
The minimum notice period for termination of employment in the UAE under the Labor Law is 30 days. However, both the employer and the employee may agree upon a longer notice period or completely waive the notice.
Learn more about how Skuad handles all aspects of employment, including probation and termination. Contact us for your specific requirements for expansion in the UAE.
Establishing a successful enterprise in a different country requires expert intervention, as it is nearly impossible to know the various compliance policies of the country. EOR services can simplify your task of conducting business globally. Their extensive research on the country’s laws and HR policies ensures business expansion at a faster pace.
An effective EOR service manages the entire life cycle of the employees. They handle complex HR-related matters and let you focus on your core tasks. Skuad’s UAE EOR solution facilitates hassle-free business expansion. Additionally, we can include the following facilities in the payroll.
- Social security of employees and workers
- No requirement for tax returns
- Legal contribution and social security of employees not available to foreigners
- Corporate tax not applicable
- Local employees can avail of 12.5% of their pension contribution
Hire talent from all over the world and improve your business prospects with Skuad’s platform for managing globally distributed teams. The team of well-informed professionals at Skuad will handle the arduous task of managing global payroll, compliance, and taxation on your behalf. Talk to us and build a global team of efficient workers.
Outsourcing Employment through an Employer of Record
The companies willing to expand in the UAE need to be clear about their hiring process. They can either create a separate team or hire an EOR that will take care of the process for them.
To learn more about Skuad’s bespoke EOR solution for the UAE, book a demo with us.
Types of Visas in the UAE
The different types of visas in the UAE are tabulated below.
Talk to us and get more guidance related to the types of visas and visa work requirements in the UAE. Skuad can handle all your visa requirements and ensure the expansion process is not delayed.
Work Permits in the UAE
To obtain a work permit in the UAE, certain steps need to be taken care of before the arrival of the permit holder. The work permit procedures can be managed and handled by Skuad’s local partner in the UAE.
To know more about work permits in the UAE and how Skuad can secure them for you, connect with our experts today and kick-start your expansion journey.
Payrolls & Taxation in the UAE
Things You Must Know To Set Up Payroll in the UAE
The UAE has crystal clear rules for payroll and taxes depending upon whether the companies hire foreigners or nationals. The companies registered in the UAE prefer to manage and handle their payroll by an EOR service. The EOR complies with the tax and payroll regulations and immigration.
An EOR service can optimize and facilitate employment performance within any company. The payroll services in the UAE are cost-effective with enhanced security and confidentiality.
Some clients prefer to keep their payroll information confidential from the internal employees. The following services are covered under payroll management.
- Preparing offer letters
- Issuing the No Objection Certificate (NOC)
- Planning and managing leave for the employees, paid holidays, and sick leaves
- Assisting with selection and application of suitable Medical/Health Insurance
- Assisting with the setup of wage protection system
- Calculating statutory gratuity payments as per the UAE labor law
- Issuing of salary certificates, salary payslips, and bank transfer letters for the employees
- The end of settlement calculation in case of termination after probation or during probation as per the labor law of the UAE
Taxes in the UAE
Why bother getting into the complexities of payrolls and taxation when Skuad can do it for you? Book a demo to know how Skuad as your EOR can help you with payroll and taxation.
In the United Arab Emirates, bonuses are not a legal provision. But employees are typically paid 13th and 14th month incentives at the end of a year's employment.
Incorporation: How to Set Up a Subsidiary in the UAE
If you wish to expand your business in the UAE, the first step would be to set up a subsidiary without which the company cannot make a legal presence in the country. The steps for setting up a subsidiary in the UAE are as follows.
- The foremost step in incorporating a holding company in the UAE is choosing the location. The employer must choose the location according to the type of business. It is best to collaborate with a local partner for this.
- Choose the type of entity for your business. The options are a public limited company and a private company.
Every entity has different laws; the employer must select the entity according to the business requirements. Even though the subsidiary will be an independent entity, the foreign company will still act as a shareholder; thus, it will give the decisional power of the subsidiary to the company. If a foreign company wants to set up a subsidiary in the UAE, the subsidiary will operate independently under business forms in the UAE.
The most common forms of establishing a subsidiary in the UAE are public and private companies. A foreign company can establish a subsidiary in the Free Zones of the UAE as a free-form company. Free Zones give a lot of benefits and some tax relaxation to the companies. A subsidiary is subject to legislation tax that favors both the local and the parent company. To set up a subsidiary in the UAE free zone, no local sponsor or partner is required, and it requires minimal paperwork and takes relatively less time. The registration of a subsidiary in the UAE is similar to that of a foreign national company.
Learn more about setting up a subsidiary in the UAE with Skuad’s effective EOR solution.
Professional Employer Organization (PEO)
A professional employer organization (PEO) in the UAE manages all HR-related functions, such as employee benefits, payroll management, taxes, and risk management. A PEO firm acts as a co-employer, while an EOR firm acts as a legal employer.
Businesses willing to expand into another country must first establish a legal presence in the country. Collaborating with a PEO firm will require the companies to set up a legal entity separately; however, when you partner with an EOR team, you can legally start working and hiring employees in the country as it is already a legal employer.
A PEO can take over the responsibilities and liabilities of the company and handle all HR-related matters. In addition, an EOR company allows organizations to set up legal entities in different countries and mark their presence in the global market.
Skuad’s integrated platform acts as an EOR. The expert professionals manage all HR-related functions; right from recruitment to termination, everything is handled by the single platform of Skuad. You can build an efficient team of workers remotely while complying with the local laws. Skuad handles all the functions such as onboarding workers, both full-time and contractors, managing their payroll and taxes, and sponsoring work permits. Connect with us and elevate your business prospects while saving your time and money with the advanced UAE EOR solutions of Skuad.
Conclusion: What Gives Skuad’s UAE Solutions an Edge?
Expanding into the UAE is a fantastic choice for your business as the country is one of the fastest-growing economies in the world. Choosing Skuad as your EOR service to outsource the human resources function will simplify and expedite your expansion in a cost-effective way.
Skuad has an extensive network in 150+ countries across the globe and provides a single interface to onboard and manage employees and contractors. It offers consistent prices irrespective of the location and manages the payment of your team through a single invoice. It also ensures that your IP, invention rights, and sensitive employee details are fully protected wherever you operate.
Connect with Skuad experts to know more.