Country Hiring Guide: The United Arab Emirates
Everything you need to know to hire in the United Arab Emirates
Key Facts to Hire in the United Arab Emirates
Abu Dhabi
Capital
United Arab Emirates Dirham (AED)
Currency
Arabic
National language
9,890,402
Total population
2.57%
GDP growth
0.74%
Total country’s GDP world share
Monthly
Payroll frequency
48 hours per week
Total working hours
Overview in the United Arab Emirates
The United Arab Emirates (UAE) is a federation of seven emirates located in the Arabian Peninsula. Geographically, the UAE is characterized by its vast deserts, extensive coastlines, and strategic location at the crossroads of Europe, Asia, and Africa. Historically, the UAE has been influenced by various empires, including the Persians, Portuguese, and British, before gaining independence in 1971. Today, the UAE is known for its economic prowess, driven by its abundance of natural resources, particularly oil and gas.
Socioeconomically, the UAE has experienced rapid development and urbanization, with a diverse population comprising both Emirati nationals and expatriates. The country’s workforce is dominated by foreign workers, particularly in the construction, services, and hospitality sectors, while Emirati nationals tend to be employed in the public sector. Although the UAE has made significant strides in education and workforce development, there are still challenges related to skills gaps, gender disparities, and the reliance on a large pool of unskilled and semi-skilled labor.
The UAE’s workplace culture is characterized by a hierarchical structure, with a strong emphasis on relationships, respect for authority, and a preference for indirect communication styles. The country’s cultural norms and traditions have a significant influence on business practices and professional interactions.
Overall, the UAE’s narrative is one of remarkable transformation, from a collection of tribal sheikhdoms to a global economic powerhouse. However, the country continues to navigate complex social, economic, and political dynamics as it strives to diversify its economy, enhance human capital, and maintain its position as a leading global hub.
Employer of Record in the United Arab Emirates
Hightekers is a global Employer of Record service that helps you hire employees in the UAE without the hassle of setting up a local entity. We handle all the legal and compliance matters as the official employer for your UAE team, allowing you to concentrate on growing your business.
How does it work?
When you hire employees in the UAE through Hightekers, we take on the role of the legal employer for your staff. This allows us to manage all employer responsibilities while you continue to oversee the daily operations and management of your employees. As the company, you oversee direct relationships with employees, assigning tasks and managing their performance. Hightekers handles local payroll, contracts, HR, benefits, and compliance matters.
Responsibilities of an Employer of Record
As an Employer of Record in the UAE, Hightekers is responsible for creating and managing the employment contracts, running the monthly payroll, providing local and global benefits, ensuring 100% local compliance, and providing local HR support.
Responsibilities of the company that hires the employee
As the company that hires the employee through the Employer of Record, you are responsible for day-to-day management of the employee, work assignments, performance management, and training and development.
Taxes in the United Arab Emirates
The UAE operates a relatively simple and business-friendly tax system, with no personal income tax for both residents and non-residents. Employers in the UAE are not required to withhold any taxes on employee salaries, making payroll management straightforward.
Corporate Income Tax: The UAE does not impose a corporate income tax, except for foreign banks and oil and gas companies, which are subject to a 20% tax rate. Businesses can deduct all reasonable expenses related to their operations.
Social Security Contributions: Emirati nationals are required to contribute to the General Pension and Social Security Authority (GPSSA) at a rate of 17.5% of their salary, with the employer contributing 12.5% and the employee contributing 5%. Expatriate employees are not required to contribute to the UAE social security system.
Value-Added Tax (VAT): The UAE introduced a 5% VAT in 2018, which is applicable to most goods and services. Certain items, such as basic food items, education, and healthcare, are zero-rated or exempt from VAT.
Tax Incentives: The UAE offers various tax incentives to encourage investment and economic diversification. These include tax-free zones, such as the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), which offer 0% corporate and personal income tax, as well as exemptions from customs duties.
Other Taxes: Businesses in the UAE may be subject to customs duties, which range from 0% to 5% on imported goods. Property owners are also required to pay an annual municipal tax, known as the “service charge,” which is typically 5% of the annual rental value of the property.
Overall, the UAE’s tax system is designed to be simple, transparent, and attractive for businesses, helping to maintain the country’s position as a leading global hub for trade, investment, and economic diversification.
Hire locally in the United Arab Emirates by partnering with Hightekers
Leave in the United Arab Emirates
While leave policies can vary significantly between countries based on cultural, legal, and economic factors, there are some common types of leave observed globally. In the United Arab Emirates (UAE), the most prevalent leave types include:
Annual Leave: Employees in the UAE are entitled to a minimum of 30 calendar days of paid annual leave per year.
Sick Leave: Employees can avail up to 90 calendar days of sick leave per year, with the first 15 days fully paid, the next 30 days at half pay, and the remaining 45 days unpaid.
Public Holidays: The UAE observes approximately 13 public holidays per year, including Islamic, national, and commemorative holidays.
Maternity Leave: Female employees in the UAE are entitled to 45 calendar days of fully paid maternity leave.
Paternity Leave: Male employees can take 5 calendar days of paid paternity leave.
Bereavement Leave: Employees may be granted up to 3 calendar days of paid leave in the event of the death of a close family member.
It’s important to note that the UAE’s leave policies may also include additional considerations, such as leave for religious pilgrimages (e.g., Hajj leave) or other special circumstances. Employers and employees should familiarize themselves with the specific leave regulations and entitlements applicable in the UAE.
Benefits in the United Arab Emirates
The United Arab Emirates (UAE) offers a comprehensive benefits package to its employees, often exceeding international standards. While the country’s labor laws are relatively flexible, employers typically provide a generous range of benefits to attract and retain top talent.
Core Benefits:
- Healthcare: Employers often provide comprehensive health insurance coverage, including medical, dental, and vision care.
- Housing: Many employers provide housing allowances or company-provided accommodation for expatriate employees.
- Transportation: Employers often provide company transportation or transportation allowances.
- Annual Leave: Employees are entitled to annual leave, typically around 30 days.
- Sick Leave: Employees are generally entitled to paid sick leave.
Additional Benefits:
- End-of-Service Gratuity: Employees are entitled to an end-of-service gratuity upon completion of their employment contract.
- Flight Tickets: Some employers provide flight tickets for employees and their families.
- Education Allowances: Employers may offer education allowances for employees’ children.
- Company-Sponsored Activities: Many companies organize social events, team-building activities, and cultural outings.
- Flexible Working Arrangements: Flexible working arrangements, such as remote work or flexible hours, are becoming more common in the UAE.
Note: The specific benefits offered may vary depending on the company’s size, industry, and the employee’s position. Employers often tailor their benefits packages to attract and retain top talent in a competitive market.
Workers Rights in the United Arab Emirates
In the United Arab Emirates (UAE), employees enjoy a range of legal protections and entitlements. Termination of employment is governed by the UAE Labor Law, which requires employers to provide valid reasons and follow due process. Anti-discrimination laws prohibit unfair treatment based on factors like gender, race, and religion.
The UAE mandates a 48-hour maximum workweek, with at least one day of rest per week. Employees are entitled to a minimum of 30 days of annual leave, and additional leave for occasions like maternity, paternity, and sick leave. Wages must be paid regularly, and the law sets minimum wage guidelines. Workplace health and safety standards are enforced, and employers must provide comprehensive health insurance coverage.
The UAE’s labor dispute resolution system involves internal grievance procedures, conciliation authorities, and labor courts. While the right to form trade unions is not explicitly recognized, employees can voice their concerns through alternative worker representation mechanisms. Regional and cultural considerations, such as respecting Islamic practices, are also factored into worker protections. Overall, the UAE strives to maintain a fair and progressive labor landscape to attract and retain talent.
Agreements in the United Arab Emirates
In the United Arab Emirates (UAE), employment agreements are governed by the UAE Labor Law and must adhere to a set of standard terms and conditions. The most common types of employment contracts in the UAE include fixed-term contracts, open-ended contracts, and part-time agreements.
Key terms that must be outlined in an employment contract include job title and description, salary and compensation, working hours, leave entitlements, and termination clauses. Employers are also required to provide details on benefits such as medical insurance, end-of-service gratuity, and any other perks. To ensure legal compliance, all employment agreements must be submitted to the Ministry of Human Resources and Emiratization for approval.
The UAE’s labor dispute resolution system provides a structured mechanism for addressing grievances. Employees can first raise concerns through internal company procedures, followed by referral to the Ministry of Human Resources and Emiratization for conciliation. If the dispute remains unresolved, it can be escalated to the labor courts for a binding decision. Employment contracts may also include confidentiality and non-compete clauses to protect the employer’s business interests, though these must be reasonable and proportionate. Any amendments to the employment agreement, such as changes to salary or job responsibilities, require the mutual consent of both the employer and the employee.
Termination of employment in the UAE is governed by specific rules and procedures. Employers must provide valid reasons for dismissal and follow due process, with notice periods ranging from 30 to 90 days depending on the employee’s length of service. The end-of-service gratuity, calculated based on the employee’s final salary and duration of service, must be paid upon termination.
It is important to note that employment agreements in the UAE can vary widely based on the specific industry, job role, and the individual circumstances of the employer and employee. Seeking professional advice to ensure compliance with local laws and regulations is highly recommended.
Hire locally in the United Arab Emirates by partnering with Hightekers
Remote Work in the United Arab Emirates
The United Arab Emirates (UAE) has been at the forefront of embracing remote work practices, driven by its commitment to technological advancement and a flexible approach to labor policies.
The UAE’s legal framework provides a clear and enabling environment for remote work. Employers are allowed to establish remote working arrangements, provided they comply with labor laws and obtain the necessary approvals. The country’s robust technological infrastructure, including high-speed internet and advanced communication tools, supports seamless remote collaboration. Employers are responsible for ensuring the necessary IT security measures, ergonomic equipment, and employee welfare provisions, such as health insurance and virtual training.
Data protection and privacy are paramount in the UAE’s remote work landscape. Employers must adhere to the UAE’s data protection regulations, which mandate the secure handling of personal and sensitive information. Flexible work arrangements, including hybrid models and flexible schedules, are increasingly common and are supported by the government’s efforts to promote work-life balance. Remote work contracts and agreements must be carefully drafted to outline responsibilities, performance expectations, and termination clauses. Tax and legal considerations, such as employee residency and social security contributions, should also be addressed.
Finally, the UAE’s diverse cultural landscape requires employers to be mindful of regional differences, cultural norms, and religious observances when implementing remote work policies. Establishing clear communication channels, fostering virtual team-building, and providing cross-cultural training are some of the best practices that contribute to the success of remote work in the UAE.
Working Hours in the United Arab Emirates
In the United Arab Emirates (UAE), labor laws and regulations governing working hours are designed to promote the health, safety, and well-being of employees. The maximum standard working hours in the UAE are 8 hours per day and 48 hours per week. Employers are required to provide employees with at least one day of rest per week.
Any work performed beyond the standard 8 hours per day or 48 hours per week is considered overtime. Overtime must be compensated at a rate of 1.25 times the normal hourly wage. Employers may implement different shift patterns, including morning, evening, and night shifts. Employees working night shifts (between 9 PM and 4 AM) are entitled to an additional allowance.
Employees are entitled to a minimum of one hour of rest per day, which can be divided into multiple breaks. For every 5 hours of continuous work, employees must be given a 30-minute break. Work performed on Fridays, the designated weekly rest day, or on public holidays must be compensated at a rate of 1.5 times the normal hourly wage.
Employers are responsible for ensuring a safe and healthy work environment, which includes providing appropriate personal protective equipment, proper ventilation, and adherence to occupational health and safety standards. The UAE’s labor laws also consider the specific needs of certain industries, such as the oil and gas sector, which may have different working hour requirements to accommodate the nature of the work. By adhering to these labor regulations, employers in the UAE can maintain a productive and engaged workforce while prioritizing the well-being of their employees.
Salary in the United Arab Emirates
Factors Influencing Salaries: Salaries in the UAE are influenced by various factors, including the cost of living, industry standards, job titles, experience, qualifications, company size, and reputation.
Resources for Researching Salaries: Employees and employers can refer to labor market surveys, government data, and online salary comparison platforms to research typical pay ranges for different roles in the UAE.
Minimum Wage Regulations: The UAE does not have a federal minimum wage; however, certain industries and occupations have established minimum wage requirements, such as domestic workers and certain categories of government employees.
Employee Compensation: In addition to a base salary, employees in the UAE may receive various benefits, including housing allowances, transportation allowances, performance-based bonuses, and end-of-service gratuities.
Payroll Practices: Employers in the UAE are required to pay salaries on a monthly basis, with payments made by the 10th of the following month. Salaries are typically paid in the local currency, the UAE dirham (AED).
Health and Safety Standards: Employers must provide comprehensive health insurance coverage for their employees and adhere to strict occupational health and safety regulations to ensure a safe work environment.
Tax Considerations: The UAE has a tax-friendly environment, with no personal income tax for employees. However, employers are responsible for deducting and remitting social security contributions for Emirati nationals.
Special Considerations: The UAE’s diverse workforce and multicultural environment may require employers to consider cultural and linguistic differences when determining appropriate compensation packages and HR practices.
Termination in the United Arab Emirates
Legal Basis:
The employment termination process in the United Arab Emirates (UAE) is governed by the UAE Labor Law, Federal Law No. 8 of 1980. This law outlines the legal framework and requirements for terminating employment relationships in the country.
Notice Periods:
Employees with a fixed-term contract are entitled to a notice period of 30 days prior to their employment being terminated. For employees with an unlimited-term contract, the notice period is 30 days if they have been employed for less than 5 years, or 60 days if they have been employed for 5 years or more.
Severance Pay:
Employees who are terminated without cause are entitled to severance pay based on their length of service. Employees who have worked for up to 1 year are entitled to 1 month’s wage, while those who have worked between 1 and 5 years are entitled to 3 weeks’ wage per year of service. Employees who have worked for 5 years or more are entitled to 1 month’s wage per year of service.
Termination Procedures:
Employers must provide the employee with a written notice of termination, stating the reasons for the termination. Employees have the right to appeal the termination decision through the Ministry of Human Resources and Emiratisation, which oversees labor-related disputes.
Employers Terminating Employees:
Employers can terminate employees without notice for certain reasons, such as misconduct or poor performance. However, employers must follow a fair and transparent termination process to avoid legal disputes and ensure compliance with labor laws.
Employees Resigning:
Employees can resign from their employment by providing the required notice period, which is the same as the notice period for termination by the employer. This means that employees with a fixed-term contract must provide 30 days’ notice, while those with an unlimited-term contract must provide either 30 or 60 days’ notice, depending on their length of service.
Hire locally in the United Arab Emirates by partnering with Hightekers
Freelancing in the United Arab Emirates
Freelancing in the United Arab Emirates (UAE) is governed by a robust legal framework that distinguishes between employees and independent contractors. Freelancers in the UAE enjoy a high degree of control and autonomy over their work, as they are not bound by the traditional employer-employee relationship. However, this also means that they are responsible for managing their own benefits, taxes, and intellectual property rights.
The UAE’s freelance landscape is characterized by a growing demand for specialized skills, particularly in sectors such as technology, marketing, and creative industries. Freelancers are required to obtain a valid trade license and comply with relevant regulations, including the UAE Labor Law and the UAE Commercial Companies Law. Contracts play a crucial role in defining the terms and conditions of the freelance engagement, ensuring that both parties understand their rights and obligations.
Freelancers in the UAE are responsible for managing their own tax obligations, including income tax and business-related taxes. Additionally, they must be mindful of intellectual property considerations, as the UAE has robust laws governing the protection of creative works and innovations. Overall, the UAE’s freelance ecosystem offers diverse opportunities for skilled professionals, but it also requires a high degree of administrative and legal awareness to navigate successfully.
Health and Safety in the United Arab Emirates
The United Arab Emirates (UAE) has a comprehensive legal framework governing occupational health and safety (OHS) standards across various industries. Anchored in the UAE Labor Law and supplemented by industry-specific regulations, the OHS regime in the UAE places significant responsibilities on employers to ensure the safety and well-being of their workforce.
Employers in the UAE are obligated to provide a safe and healthy work environment, conduct risk assessments, and implement appropriate control measures to mitigate potential hazards. They must also provide workers with adequate personal protective equipment, offer training on safety protocols, and maintain proper accident and incident reporting systems. Employees, in turn, have the right to refuse unsafe work and participate in the development of OHS policies. The UAE’s Ministry of Human Resources and Emiratisation, along with industry-specific regulatory bodies, are responsible for enforcing OHS standards through regular inspections, investigations, and the imposition of penalties for non-compliance. Additionally, the UAE has issued numerous supplementary guidelines and regulations covering specialized areas such as construction, oil and gas, and healthcare, ensuring that OHS practices remain aligned with international best practices and the country’s socioeconomic development goals. By upholding robust OHS standards, the UAE aims to protect its workforce, promote a culture of safety, and maintain its position as a attractive destination for global businesses and talent.
Dispute Resolution in the United Arab Emirates
Legal Frameworks with Respect to Labor Laws:
The UAE’s labor dispute resolution system is primarily governed by the UAE Labor Law, which outlines the rights and obligations of both employers and employees, as well as the procedures for addressing workplace conflicts.
Dispute Resolution Processes:
Employees in the UAE can initiate a dispute resolution process by filing a complaint with the Ministry of Human Resources and Emiratisation. The ministry will then attempt to mediate the dispute, and if unsuccessful, the case may be referred to the labor court for adjudication.
Enforcement Mechanisms:
The UAE’s labor courts have the authority to issue legally binding rulings, and non-compliance can result in fines or other penalties. The ministry also conducts regular inspections to ensure adherence to labor laws and can impose sanctions on employers who violate workers’ rights.
Challenges:
The dispute resolution process can be time-consuming and complex, particularly for migrant workers who may face language and cultural barriers. Additionally, the power imbalance between employers and employees can make it difficult for workers to assert their rights.
Whistleblower Protections:
The UAE has introduced whistleblower protection laws to encourage the reporting of labor law violations, including the provision of confidentiality and protection against retaliation for those who come forward.
International Influence:
The UAE’s labor dispute resolution system is influenced by international labor standards, with the country having ratified several ILO conventions and actively participating in regional and global initiatives to promote workers’ rights.
Compliance Monitoring:
The Ministry of Human Resources and Emiratisation, along with other regulatory bodies, closely monitors compliance with labor laws and addresses non-compliance through a range of enforcement mechanisms, including fines, license revocation, and criminal penalties.
Cultural Considerations in the United Arab Emirates
The United Arab Emirates (UAE) is a diverse, multicultural nation with a unique set of cultural norms and expectations in the workplace. Understanding these cultural considerations is crucial for effective communication and collaboration in the UAE’s business environment.
Communication Styles
Communication in the UAE is often indirect and contextual, focusing on maintaining harmony and avoiding direct confrontation. Emirati professionals tend to prefer a more formal, respectful tone and may be hesitant to provide direct feedback or criticism.
Non-Verbal Communication
Non-verbal communication plays a significant role in the UAE. Eye contact, personal space, and physical gestures are important considerations. For example, hand gestures with the left hand may be seen as impolite, and direct eye contact with the opposite sex can be perceived as inappropriate.
Negotiation Style
Negotiation in the UAE is often a more gradual, relationship-driven process. Emirati professionals value patience, trust, and personal connections. They may be more inclined to make decisions based on intuition and reputation rather than strictly on facts and figures.
Employee Culture and Structure
The UAE’s workforce is characterized by a hierarchical structure, with respect for authority and seniority being highly valued. Employees often expect clear guidance and direction from their superiors, and decision-making tends to be centralized.
Public Holidays and Work Schedules
The UAE observes several Islamic and national holidays, which can vary based on the lunar calendar. The standard work week in the UAE is Sunday through Thursday, with Friday and Saturday being the traditional weekend days.
Additionally, it is important to note that the UAE is a Muslim-majority country, and religious and cultural practices, such as the observance of Ramadan, can significantly impact business practices and expectations.
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