With its growing population and thriving middle class, the Middle East is becoming a go-to business hub for global development. As the region continues to focus on opportunities outside of oil and gas, more organizations are looking to the Middle East for their global expansion. The Middle East boasts many benefits for businesses, including one of the least complicated tax frameworks in the world. When looking to expand into this region, it is best to begin by forming a Middle East hiring strategy that incorporates best practices and gives companies a flexible approach to expansion.
Getting Started with a Middle East Hiring Strategy
Before making a firm decision to expand into the Middle East, an organization should be aware of the social and cultural implications of doing business in the region. It is important for companies to spend time in-country and build personal relationships with trusted advisors to ensure that their organization has a solid foundation and understanding of the country from both a business and personal perspective. For instance, culture in the Middle East puts a large emphasis on respect and reputation. If an organization hasn’t taken the time to fully understand the culture and acceptable business practices, it could hurt their growth potential, despite an effective hiring strategy or a desired product and service offering.
In addition to culture, companies that want to do business in the Middle East, specifically in the UAE, need to be aware of the mandates put in place by the Ministry of Labor regarding hiring local nationals. Companies that choose to operate in the Middle East need to plan on diversifying the staff with a fair and balanced mix of expatriates, UAE nationals, and local talent. As one of the most desired countries in the Middle East, the UAE serves as a prime example of the regulations that companies need to abide by in order to work in this thriving area.
Implementing a Middle East Hiring Strategy
An organization has many options available when hiring in the Middle East. However, considering the complexities of compliance present in each nation, a company needs to ensure they perform thorough research before determining the right global employment method for their goals.
One way to build a team in new foreign markets is through independent contractors. It is important for companies to keep in mind that contractor agreements established in one country may not be appropriate for other foreign countries, including those in the Middle East. A company needs to work closely with an in-country legal expert to develop an enforceable, compliant agreement that meets the employment requirements of the Middle East and helps them avoid penalties and legal repercussions if a contractor should dispute their employment arrangement.
If companies do not want to go through the time and cost associated with setting up a legal entity to establish a taxable presence in-country, they can utilize an International PEO (Professional Employer Organization) to help them establish a legal presence and give them the tools to compliantly begin operations in a new country.
An International PEO solution allows a company’s HR department to extend their reach to global employees by handling functions like monthly withholdings, income tax, social security contributions, local employment contracts, hiring and terminations, and payroll. This global employment method can also assist businesses with the management of supplemental insurance and work permits to simplify expansion into any Middle East country. International PEO enables companies to successfully execute their Middle East hiring while enjoying the benefits of flexibility, enforceability, and compliance.
The Middle East continues to grow in popularity for companies that are looking to establish a larger global footprint. As companies look to capitalize on the potential available in this growing region, they need to move forward with an effective Middle East hiring strategy. By studying best practices and determining the right approach to new markets, companies can plan to execute a successful Middle East expansion.
Discover how International PEO can help your company elevate your Middle East hiring strategy. Contact Velocity Global today and get one step closer to achieving your global growth goals in the Middle East, or any of the over 185 countries we support.