Multinational enterprises eyeing expertise acquisition in the United Arab Emirates (UAE) can reap substantial benefits. As the Gulf region’s economic powerhouse, the UAE offers an open embrace of foreign investment, underscored by low financing costs and tax exemptions within its free zones that extend complete ownership to foreign businesses.
Nevertheless, employers aiming to tap into the UAE talent pool face intricate hurdles due to the nation’s intricate labor laws. Adherence to these regulations is paramount to avert non-compliance. This guide furnishes a comprehensive overview of UAE labor law while outlining viable employment pathways within the UAE.
Employment Options in the UAE
Global employers have three viable routes for hiring talent in the UAE: establishing a legal entity, collaborating with a company of record, or engaging independent contractors.
- Creating a Legal Entity: Establishing a legal presence in the UAE suits businesses seeking a robust, long-term presence. However, this path is resource-intensive and time-consuming, with prerequisites varying depending on the chosen location.
- Collaborating with a Company of Record (EoR): Partnering with an EoR emerges as a swift and compliant avenue for hiring in the UAE. EoR functions as the legitimate employer, seamlessly handling employer responsibilities and allowing businesses to focus on operations.
- Employing Contractors: Businesses with transient requirements can hire independent contractors, although this entails proper categorization to mitigate misclassification risks.
Pre-requisites and Compliance Factors
Before delving into UAE talent acquisition, an understanding of UAE free zones, work visas, and permits, and prevailing labor laws is paramount.
UAE Free Zones: The UAE houses numerous free zones designed to attract foreign businesses. These zones offer tax exemptions and full foreign ownership. Each free zone operates under distinct regulations, necessitating compliance with specific labor laws.
Work Visas and Permits: Employers must sponsor visas for foreign nationals working in the UAE. While standard work authorization is valid for two years, a 10-year Golden Visa option is available for select professionals. There are various other visa rules available. Such as-
- Golden Passport
In accordance with Cabinet Decision Resolution (56) of 2018 regarding the governance of residence permits for investors, entrepreneurs, and those with specialised talents, this decision regulated the issuance of residence permits to each of the following:
- The financiers
- Entrepreneurial spirit.
- Researchers and specialists in many different areas of knowledge and science.
- Students with strong potential in the sciences.
2.Green Card Visa
Investors who establish or participate in business operations in the UAE are granted a Green visa. Discover additional requirements and application procedures.
Investors with a green visa
Investors who establish or participate in business operations in the UAE are granted a Green visa. It supersedes the prior residence visa, which was only valid for two years. Included in the requirements is the sanction of the ICP on the investment being made in accordance with the investor’s rating system.
in case the investor/partner has a number of licences, the total amount of capital invested will be determined.
sanction of the local authorities responsible.
3.Residence visa for senior citizens
People over the age of 55 who are retired can petition for a 5-year visa. Learn about additional eligibility requirements and the application process.
The eligibility criteria
Residents over the age of 55 who are retired can petition for a 5-year visa.
To be qualified for the retirement visa, a retiree must meet the following requirements:
possess a property/property worth at least AED 1 million, have savings of at least AED 1 million, or have a monthly income of at least AED 20,000 (15,000 per month for Dubai), along with a bank statement for the previous six months.
The visa is effective for five years and can be renewed if the applicant meets the eligibility requirements.
4.Student visas
A student may study in the UAE under the sponsorship of his or her parent, who must be a resident of the UAE, or under the sponsor of the accredited university or college at which he or she is enrolled.
Student Affairs offices at universities will simplify the visa application procedure for students.
A student visa is granted for a period of one year at a time and is renewable for the same length of time with evidence of continued study from the educational institution where the student is enrolled.
Residents living abroad may sponsor their male offspring up to the age of 25.
Thus, male students over the age of 25 may remain on their parents’ sponsorship if they can demonstrate enrollment in a minimum one-year course at an institution of higher education. Expatriate inhabitants are able to support their female children’s education until marriage, regardless of their age.
Key prerequisites
To apply for a student visa, you must submit the following documents: a document issued by the university or institute stating the length of study and Other general requirements specified in the general rules for the residence visa.
5.Resident visa
If they have a legitimate residence permit/visa, foreign residents can sponsor their families to live in the United Arab Emirates.
The sponsor must have a salary of at least AED 4,000 or AED 3,000 plus housing.
Male and female family members who have reached the age of 18 and are to be sponsored must undergo and pass medical fitness examinations at authorised health centres in the UAE.
In special cases authorised by the ICP, a mother may sponsor her offspring.
A resident sponsor has sixty days to file for a residence visa for his dependents after their entrance into the UAE on an entry permit.
A resident may sponsor his parents, and no matter the duration of the recipient’s visa, the residence visa will be issued annually.
No longer is the type of profession required for an expatriate worker to sponsor his family visas.
Medically unsuitable individuals will not be given a visa.
Residents with latent or silent pulmonary tuberculosis are additionally deemed medically fit and are granted a one-year ‘Health Fitness Certificate for Residence’ pending monitoring and treatment by the respective health authority.
UAE Labor Code: Adherence to UAE labor law is essential. Key aspects include employment contracts, leave provisions, work hours, termination, and severance payment regulations.
Taxes and Social Security: The UAE imposes no personal income tax, although a corporate earnings tax applies to foreign entities. Social security contributions apply to citizens, with employers contributing 12.5% of an employee’s salary.
Compliance Considerations
Compliance pitfalls must be navigated to ensure smooth talent acquisition. Challenges include contractor misclassification, permanent establishment implications, and navigating varying employment laws in UAE free zones.
In Conclusion
While the UAE offers lucrative avenues for global talent acquisition, compliance with local labor laws is paramount. Meticulous adherence is pivotal to harnessing the benefits this region offers.
At Soundlines, we stand firm to guide you through this intricate process, ensuring your talent acquisition strategy aligns seamlessly with UAE regulations. Should you require further information or assistance, please do not hesitate to contact our proficient Human Resource Expert team.
