How to Legally Hire Workers in the UAE Without a Local Entity?

The UAE is an international draw for business because of its location-based benefits, tax-free environment, and infrastructure. Yet, the employment of individuals in the country requires knowledge of divergent local laws and regulations to prevent penalties for non-compliance. Therefore, let us talk about the most important compliance risks an employer has, understanding the labour laws, visa requirements, and MoHRE approval necessary for a non-local entity-based legal employment of workers in the UAE.

How do I hire an employee in the UAE?

There are three alternatives to employ an employee in the UAE: 1. Establish a UAE legal entity with the assistance of a local entity, 2. get tied up with an employee or record (EOR) in the UAE, 3. Handle talents in the UAE as contractors.

1. Establish a legal entity in the UAE

Hiring talent in the UAE traditionally requires setting up a local entity, allowing complete control over employment and reduced long-term costs. However, this process is expensive and complex, with upfront costs around AED 50,000 and startup capital often reaching AED 150,000. Mainland entities also require a local sponsor. Businesses face full compliance responsibility, from navigating strict naming rules to managing payroll and employment laws, posing significant risk for those unfamiliar with UAE regulations.

2. Partner with an employer of record in the UAE

Working with an Employer of Record (EOR) allows you to hire employees in the UAE quickly and legally without setting up a local entity. The EOR becomes the legal employer and takes care of all aspects of employment – hiring, onboarding, payroll, compliance, immigration, and benefits. This shifts some risk and simplifies global HR, while operational control remains with you. EORS also supports teams in their local languages and acts as a flexible temporary solution during local entity setup. You can meet your budget, and with an EOR, you can hire in under a few weeks.

3. Engage contractors in the UAE

Hiring contractors in the UAE offers flexibility and cost savings paramount to global company enterprises, especially for short-term assignments: these are in sharp contrast to hiring employees full-time, which would be more time-consuming and costly. Misclassifying workers may seriously risk legal proceedings under UAE labour laws meant to protect workers’ rights. Managing contractors who are supposed to be independent contractors, such as establishing for them what time to begin work, can result in hefty fines, back payments to workers, and penalties on taxes. Because of these strict worker classification laws or Emiratisation regulations, companies should regularly audit all their HR practices and policies to ensure compliance and avoid legal repercussions.

UAE employment visa and permit requirements

The UAE stands as one of the favourite destinations for expats, with more than 88% of its population being foreigners, which means that the Commonwealth hires or relocates foreigners to work here. It is the responsibility of an employer to sponsor an employment visa; a visa necessary for long-term work and residency. A work visa is usually granted for two to three years and should be endorsed by the Ministry of Human Resources and Emiratisation (MoHRE).

Alternatively, freelancers may use the Green visa, whilst “golden” professionals, including doctors and scientists, may apply for the long-standing 10-year Golden visa. All these options have other benefits, such as family relocation and priority services.

Nonetheless, the visa and permit processing turns out to be complicated and lengthy, causing delays for the companies and thus creating compliance risks and disruptions on operational fronts. Hence, many companies prefer to outsource to full-service providers to handle their immigration business of sponsorship, etc., and ensure compliance and logistics. This way, companies can hire people and relocate quickly with all compliance without bouncing incidents back on internal teams or disrupting business continuity.

Check What Arnifi’s HR Solutions Offer

Arnifi HR solutions ease the hiring process in the UAE as everything fully complies with labour laws, visas, WPS, and insurance, thereby eliminating legal risks. No local entity setup is required, which means some time and cost savings. Quick and efficient onboarding means your team can begin work within a matter of days. 

From basic to premium, our flexible plans cater to the needs and budgets of different businesses. And with the fully transparent pricing, you’ll never have to worry about hidden fees. For hassle-free, compliant, efficient, and affordable hiring in the UAE, look no further than Arnifi HR. For better understanding, get a free consultation now!