Thinking of expanding your business or hiring talent in the United Arab Emirates?

The UAE is one of the most attractive business destinations in the Middle East, known for its strategic location, tax-friendly environment, and world-class infrastructure. With major hubs like Dubai and Abu Dhabi, the country continues to attract multinational companies and top global talent across sectors including energy, engineering, finance, and tech.

Nonetheless, hiring in the UAE requires careful navigation of visa processes, local labor laws, Emiratization policies, and cultural expectations. This guide offers a clear overview of the UAE hiring landscape including: employment regulations, contract types, visa requirements, cost consideration and more.

Let us help you hire confidently and compliantly.

Three ways to hire in the UAE

Expanding your business into the UAE means navigating the country’s unique legal landscape, visa systems, and workforce regulations. Here are the three main ways companies can hire employees in the United Arab Emirates:

1. Establishing a Local Entity

Registering a business in the UAE allows you to hire employees directly under your company’s name. You can set up a mainland company, a free zone entity, or an offshore business, each with its own licensing, tax, and hiring rules.

Considerations:

• You’ll need a trade license, labor file, and establishment card from the Ministry of Human Resources and Emiratisation (MoHRE) or the relevant free zone authority.

• Emiratization requirements apply for mainland companies hiring in specific sectors.

• Setup involves time, regulatory paperwork, and ongoing compliance responsibilities.

2. Partnering with an Employer of Record (EOR) 

Working with an Employer of Record allows you to hire in the UAE without setting up a local entity. In this case, the EOR becomes the legal employer on paper but the employee works for you day-to-day.

This is where WTS Energy comes in.

Our UAE EOR services cover:

• Legal employment contracts, payroll, tax, and benefits

• Visa sponsorship and processing

• Compliance with UAE labor laws and free zone regulations

• Fast onboarding with minimal admin

3. Hiring Independent Contractors

Freelancers and contractors can be engaged for project-based work. Some hold freelance visas or operate through platforms registered in the UAE.

Considerations:

• Not suitable for roles requiring long-term stability or visa sponsorship.

• Ensure proper classification to avoid legal issues.

What to know before hiring in the UAE

Hiring in the UAE requires an understanding of the country’s labor laws, immigration procedures, and cultural norms, as well as compliance with local regulations and free zone requirements. To ensure a smooth and compliant hiring process, it’s essential to know who is eligible to work in the UAE, what the employment laws mandate, and the types of contracts available to employers.

Who can work in the UAE without a visa?

In general, almost all foreign nationals require a valid work visa and residency permit to be employed in the UAE. However, there are a few exceptions and specific cases where individuals may work without a traditional employment visa:

• UAE and GCC Nationals can work freely in the UAE.

• Freelancers with Approved Permits: Individuals holding freelance permits from free zones (e.g., Dubai Media City, Abu Dhabi twofour54, or Ras Al Khaimah Economic Zone) can work legally without being tied to a single employer.

• Golden Visa Holders: Long-term residency holders under the Golden Visa program (for investors, highly skilled professionals, and researchers) can live and work in the UAE without employer sponsorship.

• Green Visa Holders: These are available to skilled workers and freelancers, allowing them to work independently without a traditional sponsor.

• All other foreign nationals must be sponsored for a work visa and residency permit.

Employers are responsible for securing the necessary documentation before the employee begins work.

Employment Laws and Regulations

The UAE Labor Law (Federal Decree Law No. 33 of 2021) governs employer-employee relations in both the private and free zone sectors. All companies must be aware of the Emiratization policy.

Emiratization is a government-led initiative in the United Arab Emirates (UAE) aimed at increasing the employment of Emirati nationals in the private sector. Also, private companies are required to hire a minimum number of UAE nationals (specific quotas depending on the size of the company and the sector in which it operates.)

Other regulations include:

• Work Hours: 8 hours/day, 48 hours/week. During Ramadan, reduced to 6 hours/day.

• Overtime: Paid at 125–150% of base pay depending on timing.

• Leave: Employees are entitled to 30 days of annual leave, up to 90 days of sick leave with varying pay, and 60 days of maternity leave (45 days full pay + 15 days half pay).

• Probation Period: Max 6 months (During this time, employees are not entitled to sick pay)

• Termination: 30–90 day notice depending on the situation

• End-of-Service Gratuity: Required after one year of continuous service

Types of Employment Contracts in the UAE

• Fixed-Term Contracts: All contracts must be fixed-term with a maximum duration of 2 years, renewable upon mutual agreement.

• Part-Time Contracts: Employees work fewer hours than full-time roles and may work for more than one employer, with pro-rated benefits and MoHRE approval.

• Freelance Permits: Offered in some free zones for self-employed professionals.

• Temporary Contracts: Short-term contracts for specific tasks or projects with a defined completion period.

What your company needs to hire foreign employees in the UAE 

Hiring international talent in the UAE involves navigating a structured immigration system, labor regulations, and employer responsibilities. Whether you’re hiring through a mainland entity, a free zone, or using an Employer of Record (EOR), understanding the process is essential to ensure full compliance and avoid delays or penalties.

Understand Work Permit and Visa Requirements

In the UAE, all foreign nationals must obtain a valid work visa and Emirates ID before starting employment. The visa must be sponsored either by the employer (if you’re licensed to do so) or through an authorized partner like an EOR. Sponsorship includes arranging for a medical exam, biometric registration, and entry permit processing through the General Directorate of Residency and Foreigners Affairs (GDRFA) or the Federal Authority for Identity and Citizenship (ICP).

Employment laws and regulations 

• UK employment laws protect the rights of both employers and employees by regulating areas such as dismissal, holidays, pay, and discrimination, ensuring fair and balanced workplace relationships. 

• The average working week is limited to 48 hours over a 17-week period under the ‘working time directive,’ though individuals can opt out to work more, while those under 18 are restricted to a maximum of 8 hours per day or 40 hours per week.

• Employees have strong rights regarding job security, redundancy, and notice periods. 

Register as a Licensed Employer

To sponsor foreign workers directly, your company must have:

• A valid business license (issued by a mainland or free zone authority)

• An active establishment card 

• Wage Protection System (WPS) compliance

Free zone companies must also follow the employment guidelines set by their specific zone.

Choose the right visa route

Each visa category has specific eligibility requirements, processing steps, and documentation obligations. Therefore, the appropriate option will depend on factors such as the employee’s skill level, the nature of the employment, and whether your business operates through a mainland license or a free zone. Ensuring you select the correct visa pathway not only speeds up onboarding but also helps avoid compliance issues down the line.

Complete Employee Registration and Legal Setup

After the visa is approved and the employee enters the UAE:

• Complete medical testing and biometric scans

• Issue the Emirates ID and obtain the labor card

• Register the employee under the Wage Protection System (WPS)

• Provide mandatory health insurance

• Ensure compliance with any applicable pension contributions for UAE or GCC nationals

Ensure Legal and Onboarding Compliance

To stay compliant and create a smooth onboarding experience:

• Issue a MoHRE-compliant employment contract (in English/Arabic, depending on jurisdiction)

• Provide induction and training aligned with UAE labor law

• Comply with working hours, leave entitlements, and notice periods under Federal Law No. 33 of 2021

• Monitor visa and Emirates ID renewal timelines

Not sure where to start with hiring in the UAE?

With complex visa rules, licensing requirements, and compliance checks, the process can feel overwhelming. That’s where WTS Energy’s Employer of Record (EOR) or Recruitment and Headhunting services makes a difference.

We handle the legal, administrative, and onboarding steps, so you can focus on growing your team.

Direct Hiring vs Employer of Record (EOR): Which is Right for you? 

Establish a legal presence to hire talent under your own name, or partner with an Employer of Record (EOR) to manage your staffing needs…. Which one is right for you? Both options offer advantages, and the ideal path depends on your business objectives, internal capabilities, and how you intend to manage Emiratization policies, labor regulations, and compliance obligations in the UAE.

Which Option is Right for You? 

• Long-term expansion & full control? → Set up a UAE entity 

• Fast, compliant hiring with no local entity? → Use an EOR like WTS Energy 

• Need flexibility & project-based work? → Hire UAE contractors carefully 

How much does it really cost to hire an employee in the UAE?

When hiring in the UAE, employers should be prepared for various supplementary costs: administrative fees, legal obligations, and employee-related provisions. Although the exact figures depend on factors like job position, nationality, and company licensing, the overall cost of employment often adds an additional 25% to 40% on top of the employee’s base salary.

Some of the key cost components include:

• Employment visa and residency fees: average cost is around AED 4,000 per year

• Private medical insurance: mandatory for all expatriate employees; basic plans typically cost AED 3,000–6,000 per person annually

• End-of-service gratuity: based on years of service and final basic salary (21 days per year for the first five years, 30 days thereafter)

• Allowances: such as housing, transportation, or cost-of-living adjustments; commonly 40% of the total compensation package

• Annual flight home: not mandatory, but widely practiced for expatriate staff

Companies hiring in the UAE should also consider additional expenses such as job advertising, background checks, training, and – if setting up locally – trade license fees, office set-up and administrative costs. Partnering with a local expert like WTS Energy can help you manage these obligations efficiently and ensure full compliance with UAE labor regulations.

Compliance risks when hiring in the UAE

Hiring in the UAE comes with several compliance risks, particularly for companies unfamiliar with the local legal framework. Some of the key risks to be aware of include:

Incorrect payroll contributions

Employers can easily make mistakes when calculating mandatory contributions, such as social security, pensions, or unemployment insurance. Misunderstanding the contribution rates or eligibility can result in errors, especially with manual calculations. Using outdated payroll systems that don’t reflect the latest regulations can also lead to miscalculations.

Solution: Implement an automated payroll system to ensure compliance and accurate calculations.

Unfamiliarity with employment laws

Companies new to the UAE or without proper legal expertise may overlook labor law requirements. Non-compliance with visa and work permit regulations, failure to provide legally required benefits like paid leave or sick leave, or mishandling employee terminations can lead to costly penalties.

Solution: Stay compliant with UAE labor laws by partnering with experts who manage global payroll and employment regulations.

Employee misclassification

Mistaking contractors for full-time employees or failing to recognize part-time employee rights can create significant compliance risks. Specifically, misclassifying workers might mean failing to provide benefits they are legally entitled to, leading to potential disputes and penalties.

Solution: Ensure proper classification of all workers and avoid legal complications.

Permanent establishment risk

Foreign companies operating in the UAE without a legal entity may unknowingly trigger tax obligations. Activities like managing employees or overseeing projects can be considered as having a “permanent establishment,” exposing the company to unexpected tax liabilities and penalties.

Solution: Avoid permanent establishment risks by ensuring proper registration or considering an Employer of Record (EOR) arrangement.

Streamline your UAE hiring with WTS Energy’s recruitment and talent solutions

With evolving labor laws, strict visa processes, and free zone regulations, hiring in the Emirates can be time-consuming. At WTS Energy, we make it straightforward. Our recruitment and EOR services are designed to help you find the right people without the administrative hassle.

• Ensure full compliance with UAE labor regulations and visa requirements

• Tap into a strong pool of local and international talent

• Full support from candidate sourcing to onboarding

• We manage employment contracts, payroll, visa sponsorship, and legal admin

Frequently asked questions

*The content provided is for general informational purposes only and is based on publicly available sources deemed trustworthy at the time of writing. However, we do not guarantee its accuracy, completeness, or ongoing relevance. For the most up-to-date guidance or advice tailored to your specific situation, please reach out to our team directly*