United Arab Emirates PEO Employment Services

Serviap Group’s United Arab Emirates PEO (Professional Employer Organization) solution streamlines and accelerates your expansion into the UAE without the need to establish an entity. With expedited employee onboarding, we have you operating in your new market up to 90% faster than entity setup.

When you choose International PEO, Serviap Group becomes your employer of record, we compliantly hire and onboard your new foreign team members on your behalf. No matter how many employees we onboard, you retain full employee oversight. While you keep your business running, our experts oversee all global payroll, compliance, and risk mitigation considerations, and deliver an unrivaled UAE expansion experience.

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United Arab Emirates – Employer of Record

Serviap Group provides employer of record services for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary in Spain. Your candidate is hired via Serviap Group’ Spain Professional Employer Organization (PEO) in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.

United Arab Emirates Fast Facts

Currency: United Arab Emirates Dirham (AED)
Population: 9.87 million
Economy: $3.95 trillion
Top Sectors: Extractive industries (including crude oil and natural gas), wholesale and retail trade, finance and insurance, and construction
National Holidays:

  • Gregorian New Year
  • Hijra New Year’s Day
  • Eid-al-Fitr
  • Arafah Day
  • Eid-al-Adha
  • The Prophet’s Birthday
  • Commemoration Day
  • UAE National Day

Hiring in the United Arab Emirates

The United Arab Emirates comprises seven Emirates. Most U.S. technology companies hiring sales employees in the UAE focus on the emirates of Abu Dhabi or Dubai. There are also approximately 45 free trade zones in the UAE, more than 30 of which are located in Dubai, each managed by its own free zone authority. Traditionally, companies in the UAE would establish a branch office or subsidiary in Abu Dhabi, Dubai or in one of the free zones, which would enable the company to sponsor or access work permits and thus hire employees. Working with Serviap Group, you can have access to talent in the UAE without setting up branch offices or subsidiaries.

A business license is required for any business operating in the UAE. Employees must be sponsored under the correct visa in the UAE, either by their employer if in the mainland, or by the respective free trade zone authority if working for a company in the free zone. A company must have the appropriate business license(s) in order to obtain a visa for its employees. If an employee is found to be living and working in the UAE without a visa, or if a company sponsoring an employee’s visa is not properly licensed, the employee may be asked to leave the country and both the employee and the company may be blacklisted from doing business in the UAE.

We handle the processing of all visa applications for the expat employees working for Serviap Group.

The UAE Labour Law regulates employment on the mainland of the UAE. If employees are employed in a free zone, their employment is regulated by the employment law adopted by the free zone authority where the employee is employed, which may contain differences from the UAE Labour Law. Each free zone authority has its own employment law and employees are subject to the rules and regulations of their respective free zone authority.

If you are considering setting up and hiring in the UAE, when negotiating terms of an employment contract, it may be useful to keep the following in mind:

Employment Contracts in the UAE

A written contract is required to submit an application for visa sponsorship. It is best practice for companies to put in place a strong, written contract in both Arabic and English which spells out the terms of the employee’s compensation, benefits, and termination requirements. Any employment contract in the UAE should always state the salary and any compensation amounts in United Arab Emirates Dirham (AED) rather than a foreign currency.

All of our local employees are provided with robust locally compliant employment contracts that include protection of intellectual property of our customers. You get access to great talent in the UAE, with no need to enter into your own employment contracts.

Working Hours in the UAE

In the UAE, the standard working week is considered Sunday through Thursday – the weekend is Friday and Saturday. However, according to local labor laws, only Friday is a mandated day off and many private companies operate with a 5 ½ or 6-day work week. If circumstances require that an employee works on Friday, he or she is entitled to another day off or to be paid his basic pay for normal working hours plus an increase of not less than 50% of that pay.

The maximum working hours in the UAE are 8 hours a day, or 48 hours in a week. While public employees often work from 7:30 am to 2:30 pm, the normal hours at private companies can vary. During Ramadan, local laws state that working hours must be reduced by 2 hours a day.

Holidays in the United Arab Emirates

Private sector employees are entitled to full pay on official holidays. The UAE Cabinet announces the official holidays and for 2021 and 2022 these are as follows :

  • Gregorian New Year
  • Eid Al Fitr (4 days)
  • Arafah day and Eid Al Adha (Feast of Sacrifice) (4 days)
  • Hijri New Year
  • Prophet Mohammed’s birthday
  • Commemoration Day
  • National Day (2 days)

Islamic holidays are determined in accordance to moon sighting.

Vacation Days in the UAE

Thirty calendar days of vacation is a market norm benefit in the UAE. Vacation leave is often based on length of service:

  • Less than 6 months: The employee is not entitled to annual vacation.
  • 6-12 months: The employee is entitled to an annual vacation of not less than two days for each month.
  • Over 1 year: The employee is entitled to 30 days of vacation.

Vacation time that is not used may be carried forward and accrued or paid out in lieu.

UAE Sick Leave

After three months of continuous service following the probation period, an employee is entitled to up to 90 days of sick leave per year, paid as follows:

  • Full wage for the first 15 days.
  • Half wage for the next 30 days.
  • The remaining period would be without wage.

However, if the employee’s illness is directly caused by his misconduct, s/he is not entitled to any wage during the sick leave.

Maternity/Paternity Leave in the UAE

Working women with a year of continuous service are entitled to 45 days maternity leave with full pay. (This includes the period before and after the delivery). The maternity leave is granted with half pay if the woman has not yet completed one year of service. She may then extend her maternity leave for a maximum period of 10 days without pay – this can be continuous or interrupted if caused by an illness (in this case a certified doctor’s note is required). Finally, for up to 18 months following her delivery, female employees are entitled to two daily intervals of up to 30 minutes for the purpose of nursing.

As of 31 August 2020, private sector employees in the UAE are granted five days of paternity leave, under a new order issues by the country’s President. The leave must be taken within six months of the birth of the child.

Health Insurance in the United Arab Emirates

For expats, insurance coverage for employees and their dependents is related to their salary, designation, etc. There are currently two Emirates which mandate employer-provided health insurance coverage: Abu Dhabi and Dubai. Health insurance must be provided to the employee, as well as the employee’s spouse and dependents. While not mandatory in other Emirates, it is common for employers in the UAE to provide employees with employer-sponsored health insurance.

Serviap Group provides private health insurance to our UAE employees.

UAE Supplementary Benefits

The Hajj is an annual Islamic pilgrimage to Mecca, Saudi Arabia that Muslims are expected to complete at least once in their lifetime. Under UAE Labour Law, employees may be granted a one-time pilgrimage leave of up to 30 days without pay.

Termination/Severance in the UAE

An employee who completes one year or more in continuous service is entitled to a severance (sometimes referred to as a ‘gratuity’) at the end of their service. If an employee is terminated, he or she would be entitled to gratuity pay as follows:

  • 21 days for services beyond 1 year but less than 5 years.
  • 30 days per year of service will be awarded for every year of service following the first 5 years.

If an employee under an indefinite employment contract resigns, he or she is entitled to an end of service gratuity as follows:

  • 1/3 of 21 days basic salary for between 1 and 3 years of service
  • 2/3 of 21 days basic salary for between 3 and 5 years of service
  • 21 days for service beyond 5 years

Paying Taxes in the United Arab Emirates

There are no employer taxes in the UAE, however, we recommend accruing 8.3% of the employee’s compensation as for the End of Service Benefit or Gratuity.

Why Serviap Group

Expanding your company into new, overseas markets is a huge step for overall growth and market share—which is why choosing the right partner to help ensure a compliant, streamlined expansion process remains central to an international growth strategy. Serviap Group’s International PEO solution affords a quick, compliant UAE expansion. As your Employer of Record, we handle all of your business’ risk mitigation, payroll, and compliance concerns, so you remain focused on running your company.

Whether you expand into the UAE to hire one essential employee, take advantage of a time-sensitive project, or as your first step towards a long-term presence in the Middle East, International PEO grants the flexibility and agility needed to make it happen. Our global expansion solution saves your firm up to 60% and gets you operating in-country 90% faster when compared to entity establishment.

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