An Employer of Record (EOR) acts as the legal employer for workers, handling HR responsibilities like payroll, taxes, and compliance, while the company directs the employees’ day-to-day tasks. This setup allows businesses to hire globally without establishing a local entity.
Hiring workers from Dubai offers benefits due to the city’s strategic location as a global business hub and its diverse, skilled workforce. Dubai is known for its finance, technology, and hospitality talent. The city’s business-friendly policies and tax-free environment make it an attractive destination for companies looking to expand their operations in the Middle East.
Employment in Dubai has been growing steadily, with the city’s workforce becoming increasingly diverse and skilled. According to recent data, Dubai’s labor market is dynamic, with a strong emphasis on attracting and retaining top international talent. The city’s focus on innovation and its ambitious Vision 2021 plan drive demand for skilled professionals across various sectors.
To use an EOR in Dubai, there are 6 basic steps to ensure you are set up properly:
- Find talent to hire in Dubai
- Compare using an EOR to setting up a legal entity in Dubai
- Get the information needed from your talent
- Choose an EOR provider with expertise in Dubai
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
An EOR manages payroll, taxes, and benefits administration, ensuring compliance with local laws and regulations, thus simplifying the employment process for companies.
Different labor laws in Dubai, such as those governing work hours, termination processes, and mandatory benefits, must be considered when hiring remotely. The hiring process in Dubai involves identifying talent, ensuring compliance with local employment laws, and executing contracts, typically facilitated by an EOR for companies without a local presence.
1. Find talent to hire in Dubai
Businesses should leverage a combination of local and international platforms to find talent to hire in Dubai. LinkedIn remains a crucial tool for talent acquisition, allowing companies to search for candidates actively seeking opportunities and to headhunt passive candidates.
Local job boards such as Bayt.com and Gulf Talent are popular among Dubai job seekers and offer extensive listings across various industries. These platforms are particularly useful for finding candidates with specific skills and experience relevant to the Dubai market.
Industry-specific job boards and professional associations can be valuable resources for specialized roles. For example, the Dubai International Financial Centre (DIFC) has a job portal for financial services professionals.
Recruitment agencies with expertise in the Dubai market, such as Michael Page and Robert Half, can provide tailored solutions for companies seeking to navigate the complexities of hiring in Dubai, especially considering the city’s diverse expatriate workforce.
2. Compare using an EOR to setting up a legal entity in Dubai
When working with employees in Dubai, you need to consider working with an EOR to set up your own legal entity. An Employer of Record offers a quicker, less complex route to hiring local staff, bypassing the need for a formal company presence. This approach suits companies looking to test the Dubai market or expand quickly without significant upfront investment.
An EOR manages all local employment laws, tax, and compliance issues, assuming responsibility for hired employees. This setup allows companies to start operations in weeks, compared to the months required to establish a legal entity.
On the other hand, setting up a legal entity in Dubai offers greater control and the ability to customize business operations and policies. However, establishing a legal entity involves complex registration processes, significant upfront fees, and a deeper understanding of local laws and tax regulations.
Here’s a comparison of key factors:
| Factor | Employer of Record | Setting Up Legal Entity in Dubai |
|---|---|---|
| Setup Time | 1-2 weeks | 2-3 months |
| Initial Cost | Low (typically only employee costs) | High (significant registration fees and capital requirements) |
| Ongoing Cost | Moderate (EOR fees + employee costs) | Variable (operational costs, compliance, etc.) |
| Complexity | Low (EOR handles most administrative tasks) | High (requires understanding of Dubai business laws) |
| Control over Operations | Limited (company directs daily work, EOR handles employment) | Full (complete control over all aspects of business) |
| Compliance Management | Handled by EOR (payroll, taxes, social security) | Company Responsibility (requires local expertise) |
| Scalability | Highly Flexible (easy to add or remove employees) | Less Flexible (changes may require legal procedures) |
| Local Expertise Required | Minimal (EOR provides guidance) | Extensive (need for local legal and tax advisors) |
| Suitable for | Market entry, testing Dubai market, short to medium-term projects | Long-term presence, full operations, strategic expansion |
| Risk | Lower (EOR assumes employer liabilities) | Higher (company bears all legal and financial risks) |
3. Get the information needed from your talent
To hire employees in Dubai, you need some information about them. Typically, you’ll need the following essential personal information:
- Employee’s full name
- Passport details
- Emirates ID number (for residents)
- Address
- Date of birth
- Bank account details for salary payments
Additionally, you’ll need a comprehensive job description, including title, duties, and place of work. Employment contracts in Dubai should detail the contract type, start date, salary, work hours, and other employment conditions.
It’s important to note that employment contracts in Dubai must be in writing and in both Arabic and English. The contract should include details on remuneration, work hours, holiday entitlement, and notice period for termination.
4. Choose an EOR provider with expertise in Dubai
When choosing an EOR provider to work with in Dubai, selecting one with deep expertise in the Dubai market and a strong understanding of local labor laws is crucial to ensure compliance and smooth business operations.
Evaluate the provider’s experience managing employee onboarding, payroll, and legal compliance in Dubai. Look for a provider with a proven track record of working successfully with companies similar to yours, and check their reputation through client case studies or reviews.
Assess the range of services offered to see if they align with your needs, such as visa and work permit support, employee benefits management, and payroll processing. Choosing a provider that offers comprehensive employment services and is flexible enough to adapt to changes in Dubai’s labor laws is important.
Consider the provider’s technology and platforms, ensuring they offer secure, user-friendly systems with strong data protection measures. Evaluate their pricing models, look for transparency in fees, and assess the cost-effectiveness of your business.
What are the best EOR providers to use in Dubai?
Here’s a table listing the top EOR providers for Dubai and why each was selected:
| EOR Provider | Why It’s a Good Fit for Dubai |
|---|---|
| Deel | Extensive experience in Middle Eastern markets, strong compliance support for Dubai labor laws, and expertise in managing expatriate workforce |
| Remote | Comprehensive coverage across Dubai and UAE, strong focus on tech industry needs, and offers competitive benefits packages tailored to Dubai standards |
| Atlas | Strong presence in Dubai, offers tailored solutions for different industries, and provides robust compliance support for Dubai labor laws |
| Multiplier | Specializes in emerging markets, offers dedicated support for navigating Dubai’s complex regulatory environment, and provides competitive pricing |
| Oyster HR | User-friendly platform for managing employees in Dubai, offers detailed guidance on Dubai employment regulations, and provides support for equity compensation |
These EOR providers all offer services tailored to the unique challenges of hiring in Dubai, including compliance with local labor laws, managing visa processes for expatriates, and navigating the complex Dubai business environment.
5. Communicate your hiring needs to the EOR
It is important to communicate your hiring needs to the EOR to ensure the process aligns with your company goals and legal requirements. Provide a detailed job description, including the title, responsibilities, required qualifications, and skills.
Specify the job’s expected start date, location (including whether it’s remote or onsite), and any specific requirements related to Dubai labor laws. Outline the proposed salary, bonuses, commission structures, and other compensation benefits, keeping in mind Dubai’s cultural norms and expectations.
Clarify the contract terms, including whether it’s a full-time or part-time position, and detail the working hours, including any flexibility or shift requirements. Discuss your company culture, growth plans, and how the position fits into future expansion in the Dubai market.
By accurately representing these aspects, the EOR can find the right talent and ensure legal and administrative compliance with Dubai labor laws.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated all of your hiring needs, the EOR will set up the contracts and hiring procedure, ensuring compliance with Dubai labor laws and employment practices.
The EOR drafts employment contracts that adhere to Dubai labor laws, including specific terms regarding job details, working hours, and termination procedures. They’ll manage the necessary documentation for tax, social security, and payroll setup, adhering to mandatory withholdings and reporting requirements.
The EOR assists in obtaining work visas and residence permits for expatriate employees, collects personal and bank account information for payroll, and outlines the onboarding procedures by Dubai employment laws. They’ll ensure your company complies with local regulations, adjusting contracts and practices as laws change.
Additionally, the EOR administers benefits and handles formal onboarding, including the introduction to company systems and culture, ensuring a smooth start for your new Dubai-based employees.
What help does an EOR provide in Dubai’s payroll, taxes, and benefits administration?
The EOR will support Dubai’s payroll, taxes, and benefits administration, ensuring compliance with complex local laws. It calculates and processes employee salaries, withholds the correct tax amounts, and handles social security contributions.
For payroll, the EOR manages regular pay periods, typically monthly in Dubai, and ensures compliance with the Wage Protection System (WPS), which requires salaries to be paid through approved financial institutions. They handle year-end reporting and ensure all payroll-related documentation is maintained as per Dubai labor law.
While Dubai does not impose personal income tax, the EOR manages the newly introduced corporate tax (effective June 1, 2023) for businesses whose profits exceed AED 375,000. They also handle social security contributions for UAE nationals, known as pension contributions.
For benefits, the EOR typically administers mandatory benefits such as annual leave (30 calendar days per year), sick leave, and end-of-service gratuity. They may also manage other benefits such as health insurance, which is mandatory in Dubai, and other common perks like housing and transportation allowances.
What labor laws do you need to consider when hiring in Dubai?
When hiring in Dubai, a few key labor laws must be considered. Dubai’s approach to labor laws is generally protective of employee rights, with significant emphasis on ensuring the fair treatment of both local and expatriate workers.
Employment contracts
The UAE Labor Law governs employment contracts in Dubai and must be in writing, in both Arabic and English. Key elements that must be included are:
- Job title and description
- Compensation details, including basic salary and allowances
- Contract duration (limited or unlimited)
- Working hours and days
- Probation period (if applicable)
- Leave entitlements
It’s important to note that as of February 2022, unlimited contracts are no longer permitted in Dubai. All contracts must be for a fixed term not exceeding three years (renewable).
Working hours and paid holidays
The standard work week in Dubai is 48 hours, typically eight hours per day for six days a week. During Ramadan, working hours for all employees are reduced by two hours per day. Dubai observes several public holidays annually, which are paid days off for employees.
Taxes
While Dubai does not impose personal income tax, as of June 1, 2023, a corporate tax of 9% applies to taxable income exceeding AED 375,000. Employers are responsible for ensuring compliance with this new tax regulation.
End-of-service gratuity
Dubai’s mandatory benefit is calculated based on the employee’s length of service and final basic salary. It’s 21 days’ basic yearly salary for one to five years of service. For service exceeding five years, it’s 30 days’ basic salary for each additional year.
Health insurance
Employers in Dubai are legally required to provide health insurance coverage for all employees, including their dependents.
Here’s a summary of these key labor laws:
| Labor Law | Key Points |
|---|---|
| Employment Contracts | Must be written, in Arabic and English, with fixed terms not exceeding 3 years |
| Working Hours | 48-hour standard work week, reduced during Ramadan |
| Paid Holidays | Several public holidays observed annually |
| Corporate Tax | 9% on taxable income exceeding AED 375,000 |
| End-of-Service Gratuity | Mandatory benefit based on length of service |
| Health Insurance | Mandatory employer-provided coverage |
How does the hiring process work in Dubai?
When hiring staff in Dubai, employers typically follow a structured process while adhering to local labor laws and cultural norms. The process usually involves:
- Defining the job requirements and creating a job description
- Advertising the position through various channels, including local job boards and LinkedIn
- Reviewing applications and resumes
- Conducting initial screenings, often via phone or video calls
- Holding in-person or virtual interviews with shortlisted candidates
- Performing background checks and contacting references (with the candidate’s permission)
- Making a job offer to the selected candidate
- Negotiating terms and finalizing the employment agreement
- Obtaining necessary work visas and residence permits for expatriate employees
- Completing required documentation, including registering the employee with the Ministry of Human Resources and Emiratisation
- Onboarding the new employee
Throughout this process, employers must ensure compliance with Dubai labor laws, including the requirement for written employment contracts in both Arabic and English. It’s also important to be aware of cultural sensitivities and norms in Dubai, such as the importance of personal relationships in business settings and respect for local customs and traditions.
Is Dubai a relatively easy country to hire employees remotely through an EOR?
Yes, Dubai is becoming an increasingly accessible city for hiring employees remotely through an Employer of Record (EOR). The city’s business-friendly environment, advanced infrastructure, and diverse talent pool make it an attractive destination for remote hiring.
Here are five pros and three cons for hiring employees in Dubai:
Pros
Cons
Despite these challenges, the benefits of accessing the Dubai talent market often outweigh the complexities, especially when working with an experienced EOR provider who can navigate the intricacies of Dubai employment laws and practices. The city’s growing focus on becoming a global hub for innovation and technology makes it an attractive option for companies looking to build diverse, talented teams.
