While America is a melting pot of many great people and cultures, the UAE may well have it beat, where roughly 85% of the 9,000,000 residents are expats. The UAE’s development into an international business hub has attracted thousands of highly educated, experienced workers to the country. If you are looking to establish an international presence in the Middle East, it is hard to argue there is a better spot than the UAE, specifically Dubai. But first, make sure you have a solid understanding of UAE expat hiring.
The UAE is one of the easiest countries in the world to hire an expat, although there are still a couple requirements to remain compliant, namely acquiring a visa and purchasing health insurance for the employee.
The visa process in the UAE is relatively painless compared to the rest of the world. Taking only 7-10 business days, the process is significantly shorter than almost every other country in the world. A recent legislation change grants expats a 30 day grace period in which they can remain in the country, and even begin their new job, while the visa processes. Compared to many countries where ‘visa runs’ must be made, this is a huge perk for employers and employees alike. Compounding these effects drastically reduces the time needed to get employees up and running, a vital factor in the opportunity cost of expanding internationally.
If you are anxious to hire an expat in the UAE, there is one more bit of information to keep in mind. Employees already working in Dubai will have to give at least a 30 day notice period to their current employer before transferring to a new job. However, hiring an employee through an International PEO and waiting 30 days is significantly quicker than setting up a foreign subsidiary. It also eliminates the legal ramifications that can arise from hiring independent contractors.
The UAE is one of the most cost-friendly markets in the world for employers due to the lack of contributions to social programs. The only contribution employers make is to the employee’s end of service benefit or gratuity. Gratuity is calculated by a specific formula, but typically represents roughly 4-5% of the employee’s monthly salary. This accrued benefit is then paid out to the employee upon their departure from the company.
While the lack of social contributions for employers in the UAE is a massive cost-saver, it does leave employees without key coverages, specifically health insurance. A recent change requires employers to provide health insurance for each of their employees and employers who fail to comply face fines. Additionally, cost sharing is not allowed, and the employer must pay the entire cost of the policy. Considering many expatriates travel frequently, common providers are Allianz, Cigna, and Aetna.
While maintaining compliance with the hiring process is important, protecting your company against potential internal risks is equally critical. Intellectual Property and Data Privacy have become vital components for many companies and protecting that information are at the top of those company’s legal team’s minds as they expand internationally. Fortunately, UAE law recognizes a broad range of national intellectual property rights, which are similar in form to those under the UK, European, and US systems. The UAE is a member of many worldwide conventions, such as the Madrid Convention and WTO, and there is also recognition within the UAE of worldwide intellectual property rights.
Essentially, an International PEO removes unnecessary risk from hiring internationally, all while being fast and cost-effective. Give us a call to learn more about the benefits of International PEO today!