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United Arab Emirates PEO Employment Services by Velocity Global

United Arab Emirates Employer of Record

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The United Arab Emirates at a Glance

  • Currency: United Arab Emirates Dirham, AED (د.إ)
  • Population: 9.92 million (92nd largest)
  • Economy/GDP: $655.79 billion (34th largest)
  • Top Sectors: Petroleum and petrochemical production, construction, e-commerce and finance, hospitality and service, textiles, and tourism.
  • Ease of Doing Business: Ranks 16 in the world, according to the World Bank’s latest Doing Business Report from 2019
  • Languages: The official language in the United Arab Emirates is Arabic. In the country’s judicial system, the other official languages are English, Chinese, French, Russian, and Hindi. Other widely spoken languages include Turkish, Faris, Bengali, Urdu, and Malayalam.

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Grow Your Team in the United Arab Emirates

Velocity Global’s United Arab Emirates Employer of Record streamlines and accelerates your business expansion into the UAE without the laborious process of establishing an entity. We hire and onboard your new team members on your behalf, leaving you to run your business as you see fit. Our experts manage all global payroll, compliance, and risk mitigation considerations while delivering an unrivaled UAE business expansion solution for your distributed team.

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Benefits of hiring in the United Arab Emirates

  • The UAE offers foreign-owned businesses more than 40 multidisciplinary Free Zones, where foreign investors can fully own their companies. Free Zones have their own regulations and customs, which accommodate specific industries within each zone. Several benefits include:
    • 100% ownership without local affiliation
    • 100% corporate, income, and customs tax exemption
    • Free transfer of funds
    • Long-term leasing options at competitive rates
  • The UAE’s economy is the strongest in the Gulf region. Its infrastructure has a robust road network, major ports in all emirates, and the largest airline in the Arab world.
  • Emirati banks actively lend to private businesses and they offer a substantial variety of financial services compared to their neighbors. The cost of borrowing is low for companies exploring expansion in the Middle East, as the Emirati governments understand the importance of supporting and boosting their non-oil economy.
  • Among the Arab Gulf countries, the UAE remains to have greater political stability than its regional counterparts. Religious extremism isn’t an issue and the country has resolved border disputes with its neighbors.

Challenges of hiring in the United Arab Emirates

  • The UAE is well-known for being an oil-rich country. As such, it historically depends upon oil exports as a significant part of its economy, roughly 70% of its total revenues.
  • The UAE is highly dependent upon foreign labor, whereas about 85% of the population is non-native. Businesses are forced to follow strict guidelines to acquire their employee’s work and resident permits.
  • Although the Free Zones provide attractive business environments, government regulations vary widely between all Emirates. Businesses expanding into more than one Free Zone must be careful to adhere to each Zone’s respective rules.

Cultural nuances and must-knows of doing business in the United Arab Emirates

  • In the UAE, it’s customary to use the standard Arabic salutation, “As-salaam alaikum,” peace be upon you. Then, in response, “Wa alaikum as-salam,” meaning upon you be peace.
  • When greeting Emirati colleagues, greeting the eldest and senior-level officials first is considered respectful. Handshakes using the right hand are the norm. For greetings between genders, it’s recommended that men should wait for Emirati women to extend their hand first.
  • Personal relationships are the foundation of business partnerships in the Arab world. Be prepared to have a handful of small talk meetings before beginning negotiations. A fast, high-pressure method is not welcomed. Expect meetings to lack set agendas, as diversions are common and not offensive.
  • Avoid scheduling meetings during prayer times.
  • It’s routine for business to be conducted over a meal or beverages. It can be considered impolite to refuse food or drink when offered.
  • It’s best to return favors of hospitality. When an Emirati colleague hosts a business dinner, extend a similar offer when appropriate.
  • Honoring the terms of an agreement is highly valued and respected by Emiratis, since they take one’s word very seriously.

Wages and Salaries in the United Arab Emirates

Minimum wage

  • In the UAE, there is no national minimum wage. The Emirati Labor Law states that all wages and salaries must meet employees’ basic needs. The UAE Cabinet decree determines the minimum wage and cost of living index for specific professions and areas of the country.

Probation periods

  • Probation periods are permissible in the UAE. Article 37 of the Emirati Labor Law designates that probation periods cannot exceed six months and employers cannot place employees under probation more than once.


  • Employers do not have legal obligations to reward employees with a contractual or discretionary bonus. However, bonuses are common in the UAE and they’re at the inclination of the employer.


  • When applying for a residence visa and employment permit, all employees in the UAE are required to complete an employment contract provided by the Ministry of Human Resources and Emiratisation. The contract specifies:
    • Employee’s personal information
    • Beginning date of employment
    • Expiry, or renewal, date of employment
    • Place and nature of employment
    • Salary information
  • Before signing the employment contract, all employees are required to sign an offer letter that states the basic terms of employment. The basic terms are as follows:
    • Names of the employer and employee
    • Beginning date of employment
    • Expiry, or renewal, date of employment
    • Salary information
    • Usual working hours and days
    • Annual leave and pay
    • Sick leave and pay
    • National holidays
    • Employee’s working title
    • Notice period for termination of the employment relationship
    • Place of employment
    • Employer’s disciplinary rules, if applicable
    • Free Zone rules, if applicable

Termination and notice periods

  • According to Article 43 of the UAE Labor Law, the notice period to terminate the employment relationship by both employer and employee is a minimum of 30 days and a maximum of 90 days.
  • During the probation period, employers can terminate the employment relationship with at least 14 days of written notice. If employees terminate the employment relationship during probation, they are required to provide:
    • One month of written notice, when they are joining another UAE business
    • 14 days of written notice, when they are leaving the country
  • The amount of notice period for employees who work in the Dubai International Financial Center (DIFC) and the Abu Dhabi Global Market (ADGM) is determined by length of employment.
  • The minimum notice period legally required to be given from both employer and employee in the DIFC is:
    • Seven days of notice for less than three months of service
    • 30 days of notice for at least three months but less than five years of service
    • 90 days of notice for five years or more of service
  • The minimum notice period legally required to be given from both employer and employee in the ADGM is:
    • Seven days of notice for less than three months of service
    • 30 days of notice for at least three months or more of service
  • Throughout the UAE, the DIFC, and the ADGM, employers and employees can agree to payment in lieu of notice.
  • Employers are permitted to immediately dismiss employees without notice or payment in lieu of notice, if employees commit an act of gross misconduct, as defined in the UAE Labor Law.
  • The UAE Labor law entitles employees to severance pay after completing one year of service. The severance pay is calculated as follows:
    • 21 days of wages for each year of service, for the first five years of service
    • 30 days of wages for each following year of service, after the first five years

Leave Entitlements in the United Arab Emirates

Annual leave

  • After completing six months of service, employees receive annual leave. Employees are permitted the following:
    • 2 days per month, if they have worked for six months but not a year
    • 30 days, if they have worked one year of service

Parental leave

  • Maternity leave in the UAE is 90 days with full salary, while paternity leave in the UAE is three days with full salary.


  • After completing the probation period, employees receive paid sick leave of 90 days per year. The salary pay is as follows:
    • 100% salary for the first 15 days
    • 50% salary for the following 30 days
    • 0% salary for the remaining 45 days
  • Employees must notify their employer about the illness within three days by providing a medical report, issued by a certified medical entity.
  • During the probation period, employees are permitted unpaid sick leave by providing a medical report, issued by a certified medical entity.

National and regional holidays

  • The UAE has 15 public holidays in a calendar year, which are not included in the minimum paid leave entitlement and are taken in addition to annual leave. The following are national holidays recognized by the UAE:
    • Gregorian New Year: January 1
    • Eid Al Fitr: From 29 Ramadan to 3 Shawwal* (4 days), the specific days fluctuate each year
    • Arafah Day and Eid Al Adha: From 9 to 12 Dhu al Hijjah* (4 days), the specific days fluctuate each year
    • Islamic New Year: 1 Muharram – August or July, the specific day fluctuates each year
    • Prophet Mohammed’s Birthday: October, the specific day fluctuates each year
    • Commemoration Day: December 1
    • National Day: December 2 and 3
  • *Islamic holidays are determined according to moon sightings.

Benefits in the United Arab Emirates

  • The UAE’s government benefits programs are administered by a couple of its government agency authorities. The Ministry of Human Resources and Emiratisation provides overall general supervision and administration of labor relations and employment benefits to UAE residents. The Ministry of Health and Prevention provides and administers general healthcare benefits and procedures to UAE residents. The General Pension and Social Security Authority (GPSSA) provides pension-related services to UAE residents. Government authorities collect contributions from employers and employees to maintain the UAE Social Security scheme, which maintains pensions, survivor benefits, short-term disability, long-term disability, healthcare, and paid leave entitlements.

Tax and Social Security

  • There is no personal income tax in the UAE.
  • In January 2022, the Ministry of Finance announced a federal corporate tax on business profits that will be applicable across all emirates for domestic businesses. Foreign businesses in Free Zones are exempt from all taxes.


  • The UAE corporate tax will become applicable either on July 1, 2023, or January 1, 2024, depending upon the financial year followed by the business. The tax brackets for domestic businesses are as follows:


  • The UAE healthcare system is comprehensive, government-funded, and regulated at the federal and emirate levels. Healthcare varies in the UAE from emirate to emirate, but overall, medical service quality is high.
  • The UAE has free public healthcare for Emirati residents. Non-residents pay higher fees for medical treatment. However, the government subsidizes costs and the standard of care is high at both public and private medical facilities.
  • Regardless of employment status, all residents of Dubai and Abu Dhabi are required to have health insurance. In the remaining emirates of Ajman, Ras Al-Khaimah, Sharjah, Fujairah, and Umm Al-Quwain, employers do not need to provide health insurance to employees.


  • The General Pension and Social Security Authority (GPSSA) provides UAE residents with pension-related services. The UAE pension scheme by GPSSA covers old-age retirement, disability, death, and occupational illnesses. According to Article 16 of the UAE Labor Law, employees are entitled to an old-age retirement pension if they complete the following requirements:
    • 50 years of age
    • 20 years of service
  • The old-age retirement pension amount increases by two percent for every year the employee works after 20 years of service until completing 35 years of service. When employees complete 35 years of service, they qualify to receive an old-age retirement pension equal to their salary. When employees exceed 35 years of service, they qualify to receive an old-age retirement pension equal to a salary of three months for each year.

Payroll in the United Arab Emirates

Tax dates

  • There is no personal income tax in the UAE. There are no individual tax registration or reporting requirements.


  • The payroll cycle in the UAE is usually the first day of the month. If the pay period is not detailed in the employment contract, the employee must be paid at least once a month.

Average hours

  • Working hours in the emirates of Ajman, Ras Al-Khaimah, Sharjah, Fujairah, and Umm Al-Quwain cannot exceed eight hours per day or 48 hours per week, given a six-day working week. However, there is a reduction of two hours per day during Ramadan.
  • Working hours in the Dubai International Financial Center (DIFC) and the Abu Dhabi Global Market (ADGM) must not exceed, on average, 48 hours over a seven-day working week.


  • In the emirates of Ajman, Ras Al-Khaimah, Sharjah, Fujairah, and Umm Al-Quwain, overtime is considered time worked over normal business hours. Overtime cannot exceed two hours per day. Overtime pay depends upon when it is performed. The overtime pay calculation is as follows:
    • Between 4 a.m. to 10 p.m.: 125% of an employee’s regular wage
    • Between 10 p.m to 4 a.m.: 150% of an employee’s regular wage
    • On a rest day or public holiday: 150% of an employee’s regular wage or paid time off of work in lieu of compensation
  • There is no statutory entitlement to overtime in the DIFC.
  • In the ADGM, employers are required to give overtime compensation for work performed in excess of 832 hours over a four-month period. Employers are able to determine whether overtime compensation is in wages, paid time off in lieu, or a combination of both. Overtime compensation is calculated as 125% or 150% of an employee’s regular wage for overtime worked between 9 p.m and 4 a.m.

Why Work in the United Arab Emirates?

The United Arab Emirates is defined as a constitutional federation of seven emirates, where Abu Dhabi is the nation’s capital and Dubai is the country’s most populous city. The UAE is located at the eastern end of the Arabian peninsula, surrounded by the Persian Gulf and the Gulf of Oman. The UAE has the strongest economy in the Gulf region, strong financial reserves, and increased foreign direct investment.

The UAE is a strategic international business partner, as it holds the third-largest economy in the Middle East. The UAE has a handful of official languages, including English, which remains widely spoken across the country. Western businesses easily communicate with potential business partners and customers in the UAE, compared to other Middle Eastern countries. Additionally, the UAE makes an attractive business expansion prospect since its 40 Free Zones allow foreign investors full ownership of their companies with 100% tax exemption.

Those searching for reasons to work and live in the UAE can look forward to widely spoken English, a low crime rate, international dining, tax-free income, advanced transportation systems, luxurious shopping, around 340 sunny days annually, and religious freedom. The UAE shares cultural values with a heavy emphasis on family cohesion, openness and tolerance, honor and pride, respect, and hospitality.

The climate in the UAE is an arid desert with two seasons, a mild winter from December to March and a hot, sunny summer from June to September. The climate is affected by the ocean along the coast, where the humidity along the Persian Gulf can be intense. Annual precipitation is rare and usually concentrated during the winter months. Most of the UAE experiences severe dust storms year round. The three main ecological areas are coastal, mountainous, and desert.

The UAE offers its residents and visitors a Middle Eastern lifestyle including history, religion, and innovation. The UAE is world-famous for the tallest human-made structure, the Burj Khalifa, and one of the tallest hotels in the world, the Burj Al Arab. The country’s mosques are also a stunning point of architectural beauty and religion. Another architectural marvel is the Mall of the Emirates, a modern innovation where Emiratis can enjoy a large ski resort within the mall.

The UAE is famous for several artificial islands like the Palm Jumeirah island, the World islands, and the Universe archipelagos. The UAE’s large desert is one of the most common activities for residents as it provides an insight into the landscape. The UAE is also known for its luxurious shopping, however, their local markets, known as souqs, are a major attraction to find inexpensive bargains for local goods.

Getting around the UAE is simple due to a robust transportation network. Residents can easily find a taxi or use their own vehicle to travel between the emirates. The public transportation includes metro, monorail, bus, and ferry. The city of Dubai is a major international transportation hub. Emirates Airlines is considered one of the best and high quality in the world.

The United Arab Emirates is internationally revered for its architecture, innovation, and commerce. Grow your business in the United Arab Emirates and grow your team in the Middle East.

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Countries We Serve

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