Great talent is everywhere, and if you’re looking to hire remote, global talent, the United Arab Emirates (UAE) should be on your list. Thanks to its well-established infrastructure, stable political system, liberal trade, and talented pool of workers spanning information technology, financial services, engineering, and sales. The UAE is increasingly attractive to businesses from around the world, such that back in 2022, the country changed its workweek from Sunday to Thursday to the more universally standard Monday to Friday to better align with international business partners.
For employers looking to tap into UAE-based talent, hiring employees may seem like a complex process — however, it doesn’t have to be. An Employer Of Record (EOR) can be ideal for companies looking to hire and pay talent around the world without legal and administrative hassle. For example, you may not know that there is no legally-enforced minimum wage for employees in the UAE, though it is mandated that salaries and wages should always cover basic needs.
To overcome the nuances in Emirian working culture and to ensure a seamless process, work with an EOR. This article will walk you through the reasons, processes, and advantages of hiring employees in the UAE through an EOR.
Why Hire Talent in The United Arab Emirates?
Employers have access to a highly educated workforce thanks to local universities’ affiliations with top-ranked global institutions, aligning the UAE curriculum with reputable schools across the globe. Forbes even ranked the UAE 32 out of 161 countries for Best Countries for Business.
The UAE has also embraced new technologies like AI and cryptocurrency and is a known hub for finance, trade, travel and tourism, and hospitality. According to a study commissioned by Boston Consulting Group (BCG) and The Network, a global alliance of recruitment websites, 67% of UAE job seekers are looking for stability and work-life balance, making remote work even more attractive.
How Can I Legally Hire an Employee in the United Arab Emirates?
To hire new employees in the UAE, your business must have a local legal entity. The process of establishing a local entity can be complex, time-consuming, and expensive. Doing so is only worth it if you are planning to set up long-term operations in the country.
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside of the country you legally operate within. It will already have an entity set up and the legal framework in place to do the hiring for you. This gives you more time to focus on managing relationships with your employees and growing your business. Going through an EOR is a simple way to hire talent in the UAE without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in the UAE can be quite different from those in the US and Canada. EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and any other HR services.
To learn more, check out our article on everything there is to know about EORs.
Contracts and Documentation
An EOR will handle the tedious administration involved in preparing contracts. Working with an EOR will guarantee that employment contracts are compliant with Swiss regulations. EORs will also help collect the correct documentation, such as employment offers, signed contracts, banking information, and more. This way, you can focus on growing your business and connecting with your employees.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, dental, vision, and life insurance and retirement savings plans. A comprehensive EOR will have those kinds of benefits built into its service offering.
Vacation and Public Holidays
In the UAE, employees are entitled to an impressive 30 days of vacation after one year of service. In addition, the UAE has 14 public and religious holidays, for which your employees will be granted a day off work or overtime pay. As of 2023, these include:
- January 1: New Year’s Day
- April 20 - 23: Eid al-Fitr
- June 27 - 30: Arafat Day
- July 21: Islamic New Year
- September 29: Prophet Muhammad’s Birthday
- December 1: Commemoration Day
- December 2 - 3: National Day
An EOR will help companies navigate the public holidays in the UAE and keep track of paid time off and different types of leave.
Taxes
Employees in the UAE do not pay income taxes, and businesses have not historically paid taxes either, though this is changing. As of June 2023, a 9% tax rate will apply to any company earning AED 375,000+.
Thankfully, the responsibility of an EOR is to keep abreast of changing tax laws to ensure your payroll is processed properly and per the regulations in whichever country you are operating.
What Are Your Responsibilities?
While the EOR handles everything related to legal and HR processes, everything else will fall to you as the employer. You take care of your global staff in the same way you would your local hires. That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking, and so on. With an EOR taking care of the legal complexities, you’re able to focus on building connections with your remote staff.
While the relationship with the employee won’t be all that different through an EOR, you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You will need to consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Going Through an EOR in the United Arab Emirates?
Using an EOR to hire talent in the UAE will save you time, reduce costs, and mitigate risks.
Setting up an entity for hiring in the UAE is time-consuming and, frankly, can be a huge headache. Since the EOR is already set up to hire employees in the country, it will be faster and easier to start hiring right away. In fact, the process won’t be that much different from hiring locally.
The set-up and HR costs can also be quite high, so going through an EOR can save you money. Most importantly, though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience navigating complex local HR policies, you won’t have to worry about any issues arising from improper hiring practices.
How Do I Choose the Right EOR for Me?
Before selecting an EOR, consider these four things:
- Local Experience: Does the EOR have experience hiring in the UAE? As discussed earlier, one of the biggest advantages of hiring an EOR is the assurance of compliance. Often, this requires a lot of experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this, but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: It’s critical to keep systems secure in a remote work environment, so look for a vendor that outlines ways they plan to keep information sensitive and secure.
- Collaboration: Ensure your vendor’s approach to communication and collaboration with its clients is aligned with your organization’s approach. Love having a point of contact person? Perhaps all you need is access to a Slack channel so you can quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you establish a business entity in the United Arab Emirates – giving you access to a massive talent pool without all the headache of traditional global expansion.
Book a demo today and see how we can help you quickly and easily hire, onboard, pay, and retain the talent your organization needs.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
