The United Arab Emirates, enriched with one of the largest shares of the world's oil reserves, is a pivotal player in the global oil market, producing about 4 million barrels per day. This oil wealth significantly contributes to a GDP per capita comparable to that of Europe. Positioned strategically in the Middle East, the UAE serves as a crucial hub for trade, especially with Asia and the Pacific region, supported by its free trade zones attracting substantial foreign investment. Despite recent economic shifts due to fluctuating oil prices, the UAE is actively diversifying its economy and remains a robust location for business ventures and expanding operations.

What you need to know before hiring employees in UAE 

Job market in UAE

• UAE's economy is robust, with a 3.5% growth in GDP largely fueled by diversification into sectors like tourism, technology, and renewable energy. This broad-based growth is creating numerous opportunities across various industries.
• With an inflation rate of 2.1%, the UAE provides a predictable economic environment supporting business operations and consumer spending, enhancing job stability and market expansion.
• Initiatives such as "Vision 2021" and "UAE Centennial 2071" are transforming the UAE into a knowledge-driven economy, with increased job opportunities in tech and sustainable industries.
• Significant investments in emerging sectors like AI and renewable energy bolster job creation and position the UAE as a global leader in innovative industries.
• The UAE continues to attract a slew of multinational corporations with its favourable tax policies and world-class infrastructure, significantly boosting job creation within the region.
• With substantial investments in sustainability, the UAE is pioneering eco-friendly projects, offering new careers in green technology and sustainable development, meeting the global demand for environmental stewardship

UAE  Hiring Trends

• The UAE has witnessed a substantial 10.53% increase in its workforce in 2023, reflecting strong economic momentum and expanding employment opportunities across diverse sectors.
• A 9.14% growth in new companies established over the past year highlights the UAE's thriving business landscape, signaling a positive environment for startups and established firms looking to scale.
• Female representation in the private sector grew by 23.1%, driven by progressive policies aimed at reducing gender disparities and promoting inclusivity in the workforce.
• The skilled worker segment saw a 7.86% rise, underpinning the UAE’s strategic focus on enhancing the quality of its labor force to support specialized industries and high-tech sectors.
• Youth workers constitute over half of the total employment, emphasizing the dynamic and youthful demographic that’s shaping the future of the UAE's labor market.
• With 11.69% of all jobs categorized as green, the UAE is making significant strides towards sustainability, aligning with global environmental goals and creating eco-friendly employment opportunities.

How to hire employees from UAE 

1. Set up an entity in the country

Setting up a legal entity in the UAE, entities can choose from LLCs, which now permit 100% foreign ownership, or branches. Free Zones provide further options like FZ-LLCs or Free Zone branches, allowing full foreign control and specific regulatory exemptions. Establishing involves registration with the Commercial Registrar and compliance with local legal requirements.

2. Hire independent contractors

Hiring independent contractors in the UAE involves creating formal agreements tailored to specific tasks or projects, offering considerable flexibility for short-term or specialized requirements. Proper classification of these workers is essential to avoid legal complications and potential fines. While this approach provides significant operational flexibility, it's important to note that independent contractors may not have the same level of commitment or loyalty as full-time employees, which is a crucial consideration for businesses relying on this workforce model.

3. Partner with an EOR in the country

Partnering with an Employer of Record (EOR) in the UAE simplifies market entry by circumventing the complexities of establishing a local entity. This strategy notably reduces liabilities and enhances cost-effectiveness. Collaborating with an EOR ensures adherence to UAE labor laws, tax regulations, and other compliance requirements, significantly minimizing legal risks and facilitating smoother operations. Such partnerships are especially beneficial for maintaining compliance and operational efficiency, proving essential for companies seeking to efficiently establish and expand their presence in the UAE.

Employment Laws You Must Know Before Hiring in UAE 

Compliance risk while hiring in UAE  

When hiring in the UAE, compliance risks include the misclassification of employees as contractors, violations of labor laws, and incorrect tax submissions. It is crucial to ensure that employment contracts are properly drafted and that UAE employment regulations are meticulously followed to avoid legal penalties and potential reputational damage to your business. Ensuring compliance with local norms and regulatory frameworks is essential for maintaining a lawful and effective workforce in the UAE.

Key Aspects of UAE Labor Law:

Employment Contract: In South Sudan, an employment contract is essential for defining the professional relationship between employers and employees. These contracts can be verbal or written, but written agreements are preferable for clarity and enforceability. 

Key elements should include:

• the names and contact information of the parties involved, 
• job description, 
• workplace location, 
• contract duration, 
• and salary details including payroll calculations. 

It's also important to specify any benefits, the probation period, and conditions for termination. Employers must ensure the inclusion of tax and pension information to comply with local laws. Thoroughly discussing and agreeing on these terms with employees before signing is crucial for a transparent and trusted employment relationship.

Working Hours: In South Sudan, the standard workweek is typically capped at 48 hours, aligning with common international labor standards.

Overtime: Employers must pay overtime at 150% of the regular wage rate for extra hours worked on normal days. When employees work overtime on designated weekly holidays, the compensation increases to double the regular rate, or 200% of the normal wage rate.

Minimum Wage: The minimum wage in Sudan is set at 425 Sudanese pounds monthly for all workers, representing the legal minimum compensation for employment. This wage rate has been unchanged since January 1, 2008, and applies nationwide to ensure a uniform standard of pay.

Payroll laws 

In the UAE, salaries are typically dispersed on a monthly basis, with payments being issued on the last working day of the month.

Employment benefits in UAE 

Leave Policies in UAE 

Paid Time Off

Employees in the UAE are entitled to a minimum of 30 calendar days of paid leave annually after completing one year of service. For those employed more than 6 months but less than a year, the entitlement is 2 days per month. Employers must pay the employee’s salary before they begin their annual leave. Annual leave should be utilised within the designated year unless the company allows carryover.

Public Holidays

The local government annually determines whether public holidays that fall on weekends will be compensated with a weekday off. Religious holidays, influenced by the lunar calendar, are marked as "Tentative" until confirmed closer to their occurrence.

Sick Days

Employees with at least three months of service are eligible for up to 90 days of paid sick leave per year, requiring a medical certificate within 48 hours of the onset of illness. The pay is full for the first 15 days, half for the next 30 days, and any additional sick leave within the year is unpaid.

Maternity Leave

Female employees receive 60 days of maternity leave, with the first 45 days at full pay and the next 15 days at half pay. This leave can be taken before and after the due date. An additional 45 days of unpaid leave is available for medical conditions related to pregnancy or delivery, with proper medical documentation. Termination due to pregnancy or maternity leave is prohibited.

Paternity Leave

The UAE does not provide additional paternity leave.

Parental Leave

Private sector employees are entitled to 5 days of paid parental leave, usable until the child is 6 months old, with proof of the child's birth required.

Other Leave Types

The UAE labor law provides for several types of leave:

• Bereavement Leave: 5 days for the death of a spouse, 3 days for the death of a parent, child, sibling, grandchild, or grandparent.
• Study Leave: 10 days of leave per year for employees studying at approved UAE educational institutions, available after two years of service.

Public Health Insurance 

In the UAE, public health insurance is mandated in emirates like Dubai and Abu Dhabi, ensuring all residents have access to necessary medical services. Employers must provide health insurance for their employees, with sponsors responsible for dependents. The Health Authority of Abu Dhabi (HAAD) and Dubai Health Authority (DHA) regulate these policies. In Abu Dhabi, coverage extends to all employees and their dependents, while in Dubai, the coverage must meet minimum DHA benefits. Other emirates, including Sharjah and Ras Al Khaimah, are progressing towards similar mandatory insurance schemes, aiming to enhance the healthcare system's inclusivity and efficiency across the UAE.

Filing tax in UAE 

Employer Payroll Contributions

The total cost for employer contributions in the UAE is 12.50%. This includes contributions to basic social security and housing allowances, calculated on monthly earnings between a minimum of 1,000 AED and a maximum of 50,000 AED. The UAE government also contributes an additional 2.5%, bringing the total social security contribution to 20%. In Abu Dhabi, the contribution rate is higher at 26%. Here, the employer contributes 15%, the government 6%, and the employee 5%. The total cost for employee contributions is 5.00%, which includes payments towards basic social security and housing allowances, also based on monthly earnings between 1,000 AED and 50,000 AED. These contributions apply only to Emirati citizens; expatriates are not required to make these payments. To read more about, please click here. 

Employee Income Tax

There is no personal income tax in the UAE. However, a Federal Corporate Income Tax (CIT) was introduced for fiscal years starting on or after June 1, 2023. The CIT structure is as follows:

• A 0% tax rate on income up to AED 375,000 (approximately US$ 102,000).
• A 9% tax rate on profits above AED 375,000.
• A 15% tax rate on large multinationals with consolidated global revenues exceeding EUR 750 million (approximately AED 3.15 billion).

To read more about, please click here.

Business culture in UAE 

Business culture in the UAE is characterized by a blend of traditional values and modern practices, reflecting its status as a global business hub. Here are five key aspects:

• The UAE business environment respects hierarchy; decisions are typically made at the highest level. It's important to show respect to senior figures and understand the importance of building relationships with them.
• Personal relationships are crucial in the UAE. Business often relies on networks and relationships, with a strong emphasis on trust and mutual benefits. Face-to-face meetings are preferred, and regular follow-ups are essential for success.
• Communication tends to be polite and somewhat indirect to maintain harmony and respect. While English is widely used in business settings, learning some basic Arabic phrases can be greatly appreciated and shows respect for the local culture.
• Patience is key in negotiations. Business dealings can be slow and require several meetings. The process is generally relaxed; hard selling is often seen as disrespectful. It’s common for negotiations to include aspects of social conversation as a way of building rapport.
• Business attire in the UAE is formal, with men often wearing suits and women dressing conservatively in line with the local culture. During Ramadan, working hours are reduced, and the pace of business slows down, reflecting the period's significance.

Top sectors to hire from in UAE

Industrial Sector

Dominating with a contribution of approximately 47.71% to the UAE's GDP in 2022, the industrial sector, encompassing manufacturing, construction, and utilities, remains a pivotal area for recruitment. This sector demands a variety of roles, from engineers and technicians to project managers and maintenance staff.

Technology and IT

As the UAE advances its digital transformation, the technology sector is rapidly expanding, creating numerous opportunities for software developers, cybersecurity experts, and data scientists. This sector is crucial for supporting other industries through technological innovation and infrastructure.

Tourism and Hospitality

With its rich cultural heritage and premier global events, the UAE’s tourism sector is a significant employer, offering roles in hotel management, event coordination, and customer service. The revival post-pandemic has further accelerated growth in this sector.

Healthcare

Driven by the government's focus on developing world-class healthcare facilities, the sector is in constant demand for healthcare professionals including doctors, nurses, and medical researchers. Investment in biotechnology and pharmaceuticals also offers extensive career prospects.

Renewable Energy

Aligned with the UAE's commitment to sustainability, the renewable energy sector is burgeoning, particularly in solar and wind energy, demanding expertise in green technologies, engineering, and environmental science.

Finance and Banking: As a global financial hub, the UAE offers vast opportunities in banking, fintech, and insurance, attracting professionals in financial analysis, investment management, and regulatory compliance.

Education and Research

With a focus on becoming a knowledge-based economy, the education sector seeks qualified educators, researchers, and administrative professionals to fill roles in burgeoning academic institutions and research centers.

Retail and E-commerce: The retail sector, bolstered by the UAE's status as a shopping destination and the rise of e-commerce, calls for skills in digital marketing, supply chain management, and retail operations.

Top cities to hire from UAE 

 Dubai

As the UAE's premier business hub, Dubai excels in finance, technology, tourism, and real estate. Its modern infrastructure, international connectivity, and cosmopolitan lifestyle make it attractive for global talent. Dubai Internet City and Dubai Media City are notable centers for tech and media companies.

Abu Dhabi

The capital city of the UAE, Abu Dhabi is a key player in oil and gas, healthcare, education, and government services. It hosts major financial institutions and is investing heavily in cultural sectors, including the Louvre Abu Dhabi and upcoming Guggenheim projects.

Sharjah

Known for its cultural significance and educational institutions, Sharjah is an emerging market for industries such as publishing, education, and light manufacturing. It’s also recognized for its affordability and family-friendly environment.

Ras Al Khaimah

Focused on industrial development, Ras Al Khaimah offers opportunities primarily in manufacturing, pharmaceuticals, and cement production. It's also developing its tourism sector, capitalizing on its natural landscapes.

Fujairah

Strategically located on the eastern coast, Fujairah is an important port city with growing sectors in logistics, shipping, and oil storage. Its proximity to the Gulf of Oman makes it a strategic hiring location for maritime industries.

Ajman

While one of the smaller emirates, Ajman has a burgeoning industrial sector and is developing its retail and real estate markets. Its cost-effective business environment makes it an attractive option for startups and SMEs.

Umm Al Quwain

Known for its more relaxed pace, Umm Al Quwain is focusing on developing its tourism and leisure sectors. It offers opportunities in traditional crafts and new recreational facilities, appealing to creative and tourism-related professions.

Hire in UAE compliantly with Gloroots

Gloroots, as an Employer of Record (EOR) in the UAE, offers a comprehensive solution to the complexities of hiring within the region. Our platform streamlines candidate onboarding, ensuring rapid and compliant operational setup. Designed for businesses ranging from startups to multinational corporations, Gloroots simplifies payroll, benefits administration, and tax compliance, eliminating the necessity for a local corporate presence. This service enables companies to concentrate on effectively expanding their remote teams in the UAE. For more details on how Gloroots can support your UAE hiring initiatives, please contact us.

Frequently Asked Questions 

What are the different types of employment contracts in the UAE?

In the UAE, there are primarily two types of employment contracts: Limited (fixed-term) contracts and Unlimited contracts. Limited contracts have a defined duration, typically aligned with the duration of a project or a specific period up to three years, and are renewable by mutual agreement. Unlimited contracts, on the other hand, do not have a set end date and continue until terminated by either party with proper notice and according to legal procedures.

Do I need a local partner to hire employees in the UAE?

As of the changes in UAE law effective from June 2021, foreign investors can now own 100% of the business in many sectors without the need for a UAE national as a sponsor. This allows foreign-owned businesses more flexibility and control when hiring. However, for some specific activities, especially those related to national security or in the strategic impact list, a local partner or agent might still be required.

How does the process of obtaining work visas for expatriate employees work in the UAE?

To employ expatriates in the UAE, companies must first be approved to hire foreign workers and must then obtain an employment entry visa, which allows the employee to enter the UAE. Upon arrival, the employee must undergo medical testing, obtain a resident ID (Emirates ID), and then the employment visa is stamped on their passport. Employers must also register the employee with the UAE Ministry of Human Resources and Emiratisation (MOHRE) and ensure compliance with all local labor laws.