Employer of Record in UAE (EOR in UAE)

Hire Globally, Pay Locally, Expand Effortlessly

The United Arab Emirates (UAE), a thriving hub for international business, presents exciting prospects for companies seeking to expand their operations. However, understanding its intricate labor and tax laws is essential for successful operations. An Employer of Record (EOR) in the UAE can provide the necessary expertise and support.

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Want to Have a Team in the UAE TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

3-Step Guide to Expansion with an EOR in the UAE

Step 1 – Comprehensive Planning & Assessment

Your engagement with a UAE-based EOR, like INS Global, starts with an in-depth consultation to grasp your business goals. This involves determining the required workforce, their roles, and your expansion timeline. The EOR then customizes its offerings to fit your specific needs, ensuring a seamless transition into the UAE market.

Step 2 – Effective Setup, Recruitment & Onboarding

Whether you’re building a new team in the UAE or relocating current employees, an EOR handles all the legalities. This includes managing visas, work permits, payroll, contract administration, and ensuring compliance with UAE labor laws. As your legal employer in the UAE from the beginning, the EOR eliminates the need for a local entity, saving both time and money.

Step 3 – Continuous HR Management & Compliance

Once your employees are established in the UAE, the EOR manages ongoing HR and payroll functions. This includes salary processing, managing employee benefits, and ensuring compliance with health insurance and social security contributions. The EOR acts as the HR intermediary between you and your UAE team, taking care of administrative tasks and addressing employee concerns so you can focus on growing your business.

Benefits of Partnering with a UAE EOR

Swift Market Entry

A UAE EOR enables your business to quickly enter the Middle Eastern market without the need to establish a legal entity in the region, significantly speeding up your market entry.

Compliance Assurance

The EOR ensures your operations in the UAE adhere to all local labor laws and regulations, including those related to visas, employment contracts, and employee benefits, minimizing legal risks.

Access to Regional Talent

The EOR assists in recruiting and managing local staff, giving you access to top talent in the UAE market while taking care of all employment-related issues.

Cost Savings

Partnering with a UAE EOR reduces the costs associated with setting up and managing a local entity. The EOR handles payroll, benefits, and HR tasks, allowing you to focus on business growth.

Operational Flexibility

With a UAE EOR, you can easily scale your operations up or down as needed without the complexities of establishing and dissolving a local entity, offering greater operational flexibility.

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

 5/5

EOR vs. Company Incorporation in the UAE: Making the Right Choice

While establishing a subsidiary in the UAE is a common method for local expansion, using an EOR offers several distinct advantages:

Speed – With an EOR like INS Global, the setup process in the UAE is expedited, enabling you to commence operations and hire staff much faster than traditional company incorporation, which can be time-consuming. An EOR can have your team operational in a matter of weeks or even days.
Compliance – Both EORs and subsidiaries must comply with UAE tax laws and labor regulations. EORs possess the necessary expertise to navigate these complexities and ensure ongoing compliance, minimizing legal risks.
Cost – For smaller teams or short-term projects, EOR services tend to be more cost-effective than setting up a subsidiary, as they avoid the high upfront costs of incorporation and ongoing administrative expenses. For larger enterprises, EORs provide efficient solutions that integrate new markets into global payroll systems seamlessly.
Control – While incorporating gives you full control over HR, finances, and operations, EORs offer similar control over your workforce while significantly reducing administrative tasks and liability.

Essential Criteria for Selecting the Right Employer of Record in the UAE

Selecting the right EOR in the UAE is crucial for a smooth market entry. Consider these key factors:

Industry Expertise and Reputation – Look for an EOR in the UAE with a solid track record and industry recognition, like INS Global. Client feedback and accolades are good indicators of trustworthiness.
Comprehensive Service Portfolio – Ensure the EOR offers all necessary services or can tailor their offerings to your requirements, including visa and work permit facilitation, payroll processing, tax compliance, and navigating the UAE’s labor laws.
Service Scalability – Choose an EOR that can grow its services in tandem with your business. Their staff should be able to handle an increasing workforce and respond to changing business needs.
Transparent Communication and Reliability – Select an EOR known for consistent and clear communication. They should keep you well-informed about legal updates, upcoming deadlines, and any issues, providing a single point of contact and digital tools for easy access to critical information.
Clear and Competitive Costing – Review the pricing models of different EORs. Ensure their costs are transparent, competitive, and free from hidden fees. Third-party advice can help you obtain the best value for your EOR in the UAE.

UAE Labor Law Overview

Contracts – In the UAE, employment contracts are mandatory and must be written, outlining the terms of employment, including job duties, salary, benefits, and termination conditions. Contracts are governed by the UAE Labour Law, which applies to all private sector employees except those working in free zones, which have their own regulations. Contracts can be limited (fixed-term) or unlimited, with each having specific implications for termination. The Ministry of Human Resources and Emiratisation (MOHRE) oversees these contracts, ensuring compliance. The UAE’s 2022 labor law reforms introduced greater flexibility in employment contracts, allowing for part-time, temporary, and flexible working arrangements.
Probationary Periods – Probationary periods in the UAE typically last up to 6 months, during which an employer can terminate an employee without notice or end-of-service benefits, provided there is a 3-day notice period. If an employee resigns during the probationary period, they must give 14 days’ notice. The UAE Labour Law requires that any decision to terminate during probation must be made in writing. Probationary periods are commonly used across various sectors to evaluate an employee’s performance and suitability for the role before confirming their employment status.
Working Hours – In the UAE, standard working hours are limited to 8 hours per day or 48 hours per week, with a reduction to 6 hours per day during Ramadan. Overtime is paid at a rate of 125% of the regular wage and 150% for overtime worked between 10:00 PM and 4:00 AM. There are specific exceptions for certain industries, such as hospitality and retail, where different working hours may apply. The UAE has also introduced flexible working arrangements, including remote work, as part of its recent labor law reforms to support work-life balance and productivity.
Paid Leave – UAE labor law provides employees with various forms of paid leave, including annual leave, sick leave, and maternity leave. Employees are entitled to 30 days of paid annual leave after completing 1 year of service and 2 days per month if they have worked for 6-12 months. Maternity leave is set at 60 days, with 45 days fully paid and 15 days at half pay. Additionally, the UAE offers 5 days of paid paternity leave, making it one of the few Gulf countries to do so. Paid sick leave is 90 days per year, with the first 15 days fully paid, the next 30 days at half pay, and the remainder unpaid.
Social Insurance – In the UAE, social insurance coverage is primarily for Emirati citizens, managed by the General Pension and Social Security Authority (GPSSA). Emirati employees contribute 5% of their salary to the pension scheme, while employers contribute 12.5% (or 15% for government employers). Expatriate workers, who make up about 89% of the UAE’s population, are not covered by the national pension system but may receive end-of-service benefits instead. Some free zones and multinational companies offer private retirement savings plans for their expatriate employees.
Severance Pay – Severance pay in the UAE, known as end-of-service gratuity, is mandatory for employees who complete at least 1 year of continuous service. The calculation is based on 21 days’ basic salary for each of the first five years of service and 30 days’ salary for each additional year, up to 2 years’ total salary. If an employee is terminated for cause, they may forfeit their gratuity. This end-of-service benefit is a significant component of employee compensation in the UAE, especially for expatriates who do not have access to the pension system. The gratuity system is designed to provide financial security upon the end of employment.

Navigating these complexities in-house can be challenging and time-consuming in UAE. EOR services are, therefore, helpful in ensuring your business remains compliant with labor laws, protecting you from potential risks and allowing you to focus on growth.

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FAQs

How does an EOR support market entry in the UAE?

An EOR in the UAE handles all necessary legal, HR, and compliance matters, facilitating a swift market entry without the need to establish a local presence.

What financial benefits does an EOR offer in the UAE?

Choosing an EOR in the UAE is often more economical than setting up a subsidiary, as it bypasses the costs associated with incorporation and ongoing administration.

Is visa and work permit management part of an EOR's services in the UAE?

Yes, a UAE-based EOR manages the entire process for visas and work permits, ensuring that all activities comply with local immigration laws.

Which businesses can benefit most from EOR services in the UAE?

EOR services in the UAE are particularly advantageous for companies of all sizes seeking quick entry into the market, cost reductions, and decreased administrative burdens.

How does an EOR ensure compliance with UAE labor laws?

EORs in the UAE have local professionals who stay abreast of legal changes, ensuring your operations fully comply with the country’s labor laws.

How much control will I retain over my team while using a UAE EOR?

While the UAE EOR acts as the official employer, you maintain considerable control over the day-to-day operations and management of your employees.

Employer of Record in UAE (EOR in UAE)

Hire Globally, Pay Locally, Expand Effortlessly

3-Step Guide to Expansion with an EOR in the UAE