United Arab EmiratesDiscover an employer’s guide to employment laws, regulations, and Employer of Record (EOR) in Dubai.
Looking to hire in Dubai? An EOR can help
Using an Employer of Record (EOR) service is a great solution for businesses entering Dubai without a local entity.
By partnering with an EOR, you can bypass the challenges of setting up your business, cut down on overhead costs, and reduce compliance risk.
An EOR acts as the legal employer for your Dubai-based team handling payroll, compliance with local employment laws, benefits, and much more. You’ll retain complete control over employees’ day-to-day work and operational tasks.
How to hire in Dubai
Step 1: Choose between a local entity and an EOR
In Dubai, you can choose between two main approaches for hiring: 1) Registering a local entity or 2) Engaging an Employer of Record (EOR).
Forming a local entity in Dubai grants you comprehensive control over your operations but involves a complex, costly, and time-intensive process. You’ll need to register with the local authorities, acquire the appropriate licenses, and navigate detailed tax and regulatory requirements.
This setup can extend over several weeks or even months, which might delay your hiring. Additionally, you’ll be responsible for ensuring compliance with all local employment laws and regulations.
On the other hand, an EOR can simplify your hiring process by managing the intricacies of Dubai’s employment regulations for you and then handling core HR tasks. This option allows for quicker onboarding and streamlined operations.
If you aim to make a significant investment in Dubai and plan to expand a large team, establishing a local entity could be the better option. Alternatively, if you need a more immediate and straightforward hiring solution, an EOR offers a more efficient path.
Step 2: Selecting the appropriate EOR
When choosing an Employer of Record (EOR) in Dubai, it is essential to assess various factors to prevent compliance issues, unexpected costs, and inadequate experiences for your new employees. Here are the key considerations:
- Legal compliance. Confirm that the EOR is knowledgeable about Dubai’s employment laws, regulations, and local benefits. Research their experience and request examples of how they manage industry-specific requirements.
- Customer service. Seek an EOR that provides reliable support and assigns dedicated account managers. For example, Multiplier offers 24/5 personalized assistance and dedicated managers for each client.
- Transparent pricing. Look for EOR services that clearly outline their pricing structures and provide transparent, upfront costs. A straightforward pricing model helps you understand what to expect and enables you to make informed decisions without surprises.
- Total cost of ownership. As we all know, the cheapest service isn’t always the best. Be sure to invest in a solution that doesn’t compromise on quality.
Step 3: Employing and onboarding in Dubai
Send over the contract
After selecting your ideal candidate, the next step is to provide a Dubai-compliant employment contract. An EOR like Multiplier can draft contracts that adhere to Dubai’s legal standards in just minutes.
You’ll have the flexibility to tailor the contract’s terms. And once the contract is finalized, your EOR will handle the secure distribution and collection of signatures, ensuring all legal requirements are met.
Enhance compensation with competitive benefits
To offer a compelling benefits package, rely on an experienced EOR rather than managing local vendors yourself. A competent EOR can present various benefits packages that meet local standards and arrange for necessary IT equipment for your new hires.
Get all your documentation in order
Collecting the new hire’s tax and banking details is essential. If you’re working with an EOR like Multiplier, they will automatically gather this information to set up payroll. This means managing required documentation, streamlining the process, and eliminating paperwork hassles.
Onboarding employees in Dubai need not be complex. Partnering with an EOR can simplify and expedite the process, making it hassle-free for both you and your new employees.
Step 4: Run payroll for employees based in Dubai
Managing payroll for employees in Dubai requires a solid understanding of local tax rules and mandatory contributions. Dubai’s tax system is relatively straightforward, with no personal income tax, but employers are still responsible for other statutory payments.
Employers must contribute to the UAE’s social security system, which includes end-of-service benefits and, for certain categories, housing allowances. End-of-service benefits act as a gratuity payment based on the employee’s salary and length of service, due when the employee leaves the company.
While Dubai doesn’t impose personal income tax, employers must comply with regulations regarding the Dubai Health Authority (DHA) insurance requirements. All employees are required to have health insurance coverage, which employers are generally responsible for providing.
Handling these requirements can be challenging. However, partnering with an EOR like Multiplier can streamline global payroll management. We ensure timely and accurate salary payments, handle all local contributions, and oversee compliance matters.
With Multiplier’s global payroll solution, you can oversee payroll for your Dubai-based employees efficiently from a single platform.
Employment laws and regulations in Dubai
Dubai has a detailed set of employment laws designed to regulate working conditions and employee rights. Here’s a summary of the key employment laws and regulations you should be familiar with:
- Employment contracts. Employers are required to provide written contracts that specify employment terms such as job responsibilities, salary, working hours, and termination conditions.
- Employee rights and protections. Dubai’s laws offer various protections, including a safe working environment, adherence to minimum wage standards, transparent pay practices, and protection against discrimination and harassment.
- Health insurance requirements. All employees in Dubai are required to have health insurance. Employers typically cover this requirement, ensuring employees have access to necessary medical services.
Employ top talent in Dubai through an EOR
Onboard, pay, and manage all your international employees
Employee benefits and compensation
In Dubai, the legal framework for employee benefits and compensation includes several important provisions:
- Minimum wage. Dubai does not have a national minimum wage; however, specific wage requirements may apply depending on the employee’s role and industry.
- Annual leave. Employees are entitled to 30 calendar days of paid annual leave each year. This leave is crucial for employee well-being and must be granted in accordance with local regulations.
- Sick leave. Employees are entitled to 90 days of paid sick leave per year, which is paid at varying rates depending on the duration of the leave. The first 15 days are paid at full salary, the next 30 days at half salary, and any additional sick leave is unpaid.
- Parental leave. Dubai offers maternity leave of 60 days, with 45 days paid at full salary and the remaining 15 days unpaid. There is no statutory parental leave for fathers, though some employers may provide additional leave as part of their benefits package.
- End-of-service benefits. Employers are required to provide end-of-service gratuity, calculated based on the employee’s length of service and final salary.
Employers often supplement these statutory benefits with additional perks to attract and retain skilled employees. To provide competitive and locally compliant benefits for your international team, consider using Multiplier’s Global Benefits Administration.
Termination and offboarding procedures
Employers must follow specific regulations regarding notice periods and end-of-service benefits when terminating employment in Dubai.
The standard notice period is typically 30 days, though this can vary based on the terms set out in the employment contract.
End-of-service benefits are mandated by law and calculated as 21 days of salary for each year of service during the first five years and 30 days of salary for each subsequent year. The exact amount can be defined in the employment contract or determined by statutory requirements.
Employers can provide payment in lieu of the notice period in cases of organizational restructuring or economic difficulties, as long as this is outlined in the employee’s contract.
Handling these procedures can be complex, especially for those unfamiliar with Dubai’s employment laws. An EOR like Multiplier can help by ensuring compliance with local regulations and facilitating a smooth transition for both the employer and the departing employee.
Visa and work permit assistance
Hiring foreign employees in Dubai involves obtaining the necessary visas and work permits. These are the key visa categories for working professionals:
- Employment Visa: For foreign nationals employed by Dubai-based companies. This is usually issued for a period of 2 to 3 years and can be renewed.
- Business Visa: For individuals visiting Dubai for business activities such as meetings, negotiations, or conferences. It does not allow for direct employment but supports business-related activities.
- Investor Visa: For foreign nationals who are investing in Dubai and wish to reside and work in the UAE. This visa offers long-term residency linked to the amount of investment.
- Freelance Visa: For independent professionals and freelancers working in Dubai. This visa allows for self-employment and provides flexibility in work arrangements.
- Student Visa: For those who have completed their studies in Dubai and wish to stay temporarily while seeking employment related to their field of study.
Managing visa applications and renewals can be intricate and time-consuming. Expert guidance is essential to ensure compliance with Dubai’s immigration regulations.
Multiplier provides comprehensive support for work permits and visa management through its Employer of Record (EOR) services. Visit our Global Immigration page for more information.
Get started with Multiplier’s EOR services
Multiplier’s Employer of Record (EOR) services offer a hassle-free solution for expanding your workforce in Dubai. You can employ talent without the need to establish a local entity, while we handle all HR functions and ensure a smooth employee experience.
Our EOR services encompass the entire employment lifecycle. We manage compliant contracts, handle payroll and tax responsibilities, and provide a range of customizable benefits that align with local regulations. This allows you to bypass the intricacies of compliance and concentrate on growing your business.
Book a demo to learn more.
