How Can a Company Hire Employees in the UAE Without Setting Up a Legal Entity?

Entering the market in the United Arab Emirates opens many possibilities for expansion, yet the conventional way of forming an enterprise is quite costly and time-consuming.  Foreign companies are delayed in operations due to talent acquisition before they commit to a physical office. 

This article reveals the possibilities of recruiting employees from the United Arab Emirates without creating a local legal structure. You will learn about compliance techniques, EOR solutions, and the difference between direct registration and outsourcing of workers.

How Can an International Company Expand Into the UAE and Hire Employees Quickly?

One needs to be agile when venturing into new markets. There is an emerging need to handle the deployment problem and local labor laws at the same time. Be agile, and do not get stuck by embracing unconventional forms of employment.

Using an EOR for Initial Market Entry

The quickest way to get into a market is through an Employer of Record (EOR). If there is an EOR, the provider is the legal employer of your UAE staff. They take care of the administrative burden of visas, labor contracts, and tax compliance so your workforce can be up and running in weeks.

This model reduces financial risk and tests the commercial viability of the UAE market without the overhead of long-term commercial leases. This method allows a business to control its costs and to confirm that there is a market for its product.

Building a Permanent UAE Workforce

Once a business has demonstrated it can successfully penetrate a market, they tend to grow. 

From a flexible EOR solution, one can transition into developing a local structure.

In order to build up a permanent team, it is important to integrate your hiring approach into your operational objectives. A company offering solutions for hiring specialists will allow you to choose suitable specialists and will lay the foundation for future development.

Need Skilled Developers in the UAE?

Build your UAE team with qualified developers and flexible hiring solutions designed to support your business expansion.

Request a Proposal →

What Are the Ways to Hire Employees in the UAE Without Setting Up a Local Entity?

There are three primary approaches for foreign companies to hire professionals. Every option will carry its own implications.

Employer of Record (EOR)

An EOR handles complete administrative responsibility for your employees. These organizations issue residency visas, MOHRE work permits, and handle payroll for you.

You are responsible for daily task management and productivity of your employees. This system eliminates the requirement of compliance and administration, which allows your team to concentrate on business growth.

Independent Contractors

It is possible to employ independent contractors for short-term projects. However, there are many restrictions related to freelance work in UAE. Contractors are required to have a valid freelance permit and visa to operate legally. Using contractors means less control of your staff and puts your business at risk of compliance issues if their work authorization lapses.

Setting Up a UAE Entity for Direct Employment

In case your strategy entails maintaining a big local workforce with complete operational control, it is advisable to create a legal entity.

This will entail selecting a location, acquiring a business license, renting an office space, and registering with the MOHRE and the immigration authorities. It requires a large initial capital, but gives complete freedom of direct employment.

What Can an EOR Handle When Hiring in the UAE?

Using an EOR eliminates the hassles associated with international recruitment since it handles all aspects of the employee management process.

Employment Contracts and Onboarding

The local laws of the area have some clauses to be included in employment agreements. The EOR prepares those legally binding documents, which will safeguard the Intellectual Property and adhere to the guidelines of MOHRE. They provide the entire onboarding process, so that the candidates submit all the necessary paperwork and also know about their legal rights in the country before they start working.

Payroll, WPS and Employee Administration

For making sure that the payment of salaries is done in a proper way, the Wage Protection System (WPS) has become mandatory in the UAE. The EOR takes care of the payroll, the calculation of the statutory benefits, and the salary payments to the employees via the WPS.

Visa and Work Permit Support

UAE has stringent immigration procedures. The EOR handles the visa life cycle. This involves applying for the entry permit, making Emirates ID biometrics, getting the medical fitness certificate, and stamping the residency visa. They monitor renewals and cancellations of visas, ensuring that your entire workforce is completely compliant.

What UAE Employment Compliance Should Foreign Companies Consider?

If you are doing business in the UAE, you need to strictly comply with federal labor laws and immigration rules. Failure to understand these rules can result in operations being disrupted or getting fined financially.

Your business must comply with the MOHRE regulations on the maximum working hours, mandatory leave entitlement, and overtime pay. You must comply with WPS, making sure that salaries are sent through approved financial channels. 

Compliance factors include health insurance, as employers must obtain medical coverage before issuing a visa. End-of-service gratuity management is a legal requirement to ensure departing employees are paid the proper financial settlements. Maintaining standards helps keep the regional operations flowing.

EOR vs. Setting Up a UAE Entity: What Is the Difference?

Whether to go with EOR or establish a legal entity in UAE will be dependent on your requirements in terms of time frame, budget, and objectives.

• Time-to-Market: The EOR model can help you get the employee on board in 2 to 4 weeks.
• Capital Investment: Setting up an entity requires significant initial capital
• Compliance Responsibility: An EOR assumes full legal liability for employment compliance. With your own entity, your business bears total local responsibility.
• Scalability: An EOR is perfect for testing the market. A local entity becomes more cost-effective when deploying large permanent workforces.

How Long Does It Take to Hire Employees in the UAE?

The hiring time in UAE will be determined by your onboarding method and the geographic location of the candidate. It normally takes 2 to 4 weeks to hire and onboard through EOR. This includes such things as providing the offer letter, obtaining the work permit, and the entry visa. 

Candidates in the UAE have a faster start; all they have to do is transfer their visa. Firstly, it takes 8 to 16 weeks to set up a legal entity before you can start processing your first employee’s work permit.

For your business expansion to the Middle East, you do not have to struggle with complex corporate registration processes and massive initial capital investments. With alternative workforce models, you can test the market, hire experts, and ensure compliance with all local requirements.

In case of either temporary manpower supply or permanent recruitment services, the use of the proper workforce strategy will allow avoiding delays and making the process of workforce management more effective.

Looking to Hire Developers in the UAE?

Access qualified developers and streamline your UAE hiring process with flexible recruitment and staffing solutions.

Request a Proposal →