Dubai provides businesses with a strong enabling environment that includes macroeconomic and political stability, a government that is focused on the future, excellent general infrastructure, and ICT infrastructure. The nation is frequently ranked as one of the best for conducting business and has made consistent, convincing changes to its regulatory environment.
Dubai stands out as the best Arab nation in terms of quality of life, safety and security, economic prospects, establishing a business, and as a model for other nations to follow.
Dubai labour laws and regulations regarding hiring
You must sponsor your employees after the Company setup in Dubai and obtain your license. Companies are not permitted to hire non-citizens without first receiving approval from the Department of Labor and getting a work permit, as stated in Article of the Labour Law.
The following factors are taken into account by the Ministry of Human Resources and Emiratization when granting a work permit:
- The employee must have the professional skills or academic credentials required by the nation.
- The employee complied with residence requirements and entered the country legally.
- If there are no nationals registered in the employment section who are qualified to execute the needed work, the Department of Labor may not approve the employment of non-nationals after reviewing its records.
Observations before hiring in Dubai
You must know important concepts like visas and work permits, contracts, termination, and conventional working hours before you can start assembling your staff.
The mainland and the free zones
Seven emirates, or city-states, make up the federation known as the UAE. Moreover, the UAE has 45 designated free trade zones that were established to attract foreign companies. The majority but not all of them are in Dubai, and each one is governed by a trade zone administration.
Only businesses that fall inside specified categories are eligible for licensing in these zones, which are created for particular industry sectors. They permit 100 percent foreign ownership, 100 percent reductions in import and export taxes, exemptions from corporation taxes in the majority of industries, a complete lack of personal income taxes, and support for employee sponsorship and housing. Here are only a few instances of free zones:
- Free Zone at Abu Dhabi Airport
- Auto Zone in Dubai
- International Media Production Zone at Dubai Techno Park Fujairah Creative City
- Investment Authority of Ras Al Khaimah
More than 88 percent of the population of the UAE is made up of foreigners. Companies operating in the mainland of the UAE not offshore or in a free zone will need to obtain specific documents for their employees, like visas and work permits, from the relevant mainland authorities before they can legally employ those workers. They will also need to adhere to the Ministry of Labor’s employment regulations.
Such documentation must be obtained from the relevant free zone authorities by businesses operating in the zone. Consider with local legal professionals to confirm that your company’s recruiting and employment policies are compliant because the free zones occasionally have different labor regulations from the mainland.
Contracts and notice obligations
Before they may submit visa applications, employers must have a written contract for every new employee. The contract shall be in writing in both Arabic and English and shall contain the following terms:
- the position and tasks
- Transitional phase
- Advantages of Compensation
- Requirements for ending
Severance pay, sometimes known as gratuity money, is frequently due to terminated employees who have worked for the company for a year or longer. The distribution of gratuity pay accrual typically follows:
- a total of 21 days’ gratuity over the first five years of employment
- After the fifth year of service, there are 30 days of gratuity.
- Taxes and pay stubs
Payroll taxes and employer taxes do not exist in Dubai. To compensate for end-of-service incentives and gratuities, many businesses nevertheless set 8.3 percent of each employee’s pay.
Most of the time, business setup services in Dubai are exempt from paying corporate income taxes. Oil firms and foreign banks are the only businesses subject to corporation taxes in Dubai. Corporate taxes are not paid for a specific amount of time by companies that are registered in free zones, and that tax-free period can be extended.
Different minimum wages apply in Dubai. There is no minimum pay for foreigners employed in Dubai. Although the government has not established a general minimum salary for the citizens, it frequently sets regionally and educationally-based local minimum wages.
A separate 90 days of sick time are given out each year to workers who have been with the company for at least three months. Workers are eligible for full payment for the first 15 days of sick leave, followed by half pay for the following 15 days, and then unpaid leave for the remaining days.
Maternity and paternity leave is permissible for workers in the UAE. Unless they have worked for the company for less than a year, pregnant employees are entitled to 45 days of paid maternity leave, during which time they may take the time at half their regular wage. Also, pregnant workers have the option of taking an additional 10 days of unpaid maternity leave. Within six months after the child’s birth, private-sector fathers are allowed to take up to five days of paternity leave.
Anti-discrimination legislation and limitations
Employers are not permitted to treat job applicants or current workers differently in the UAE for any of the following reasons:
- Nation of origin Race
- Sexting Religion
- marital standing
- a physical or mental handicap
Nonetheless, according to the same legislation, hiring must give preference to Dubai citizens. They must then give candidates from other Arab countries preference after they have done so.
Dubai employment procedures
Recruiting a new employee in your home country may have many similarities to hiring someone in the UAE. However, you’ll need to take a few regional quirks into consideration and adjust your employment procedures accordingly:
Utilize the local language and currency: Try to communicate with your new employees in Arabic or the most common local language, especially in formal papers like offer letters and contracts, even if they speak your mother tongue. All financial information must be provided. These procedures assist you in ensuring that your staff members comprehend your crucial communications.
They typically require employers to obtain both an establishment labor card, or work permit, and an establishment immigration card before hiring a new employee. The Ministry of Labor makes these documents available in a comparatively simple manner.
What is needed to hire personnel in the United Arab Emirates?
Especially if your business decides to establish a subsidiary, hiring new staff in Dubai can be a difficult and drawn-out procedure. You may wish to consult local experts to find out the criteria in your region because they frequently differ depending on where in Dubai you choose to conduct your activities. If you form your business in one of the free zones, you’ll often face fewer limitations
Businesses must appoint no more than 50 directors to form a limited liability company, although at least two are required. On the mainland, forming a limited liability company also typically entails locating a local sponsor who will own 51% of the business or a local service agent who would invest and own 100% of the company. In the free zones, your parent firm can typically continue to be the sole owner.
If you are involved in learning about what we can do for your business in Dubai, you can contact us at any time.