A Practical Guide to Using EOR Services in the United Arab Emirates
If you’re thinking about hiring in the UAE for the first time, welcome, this is a country with serious business potential. With a strong expat workforce, modern infrastructure, and tax-friendly policies, the UAE attracts all kinds of companies looking to set up teams in the Middle East.
But, and it’s a big one, hiring here comes with its own set of local laws, visa processes, and labor rules. You can’t just send someone a contract and call it a day.
That’s where using an Employer of Record (EOR) makes life easier.
An EOR takes care of all the heavy lifting: employment contracts, payroll, taxes, visa sponsorships, and local compliance. But even if your EOR is doing the backend work, it’s still smart to understand how hiring in the UAE actually works. Things like gratuity pay, offer letter formats, and working hours are not the same as in the US or Europe.
Let’s walk through the basics so you know what to expect.
Employment Law in the UAE Is Heavily Regulated, and Tied to Visas
The UAE’s labor system is very structured. Whether you’re hiring in Dubai, Abu Dhabi, or Sharjah, your employees must be registered with the Ministry of Human Resources and Emiratisation (MOHRE) or a free zone authority (like DIFC, DMCC, etc.).
Every employee needs a work visa tied to a local sponsor. If you’re hiring through an EOR, the EOR becomes that legal sponsor, handling the visa application, Emirates ID, labor card, and health insurance.
The Federal Decree-Law No. 33 of 2021 governs most employment rights. It sets rules around contracts (now all fixed-term), working hours, holidays, notice periods, and end-of-service benefits. The EOR will follow these guidelines to issue compliant employment offers.
Worker Classification: Everyone’s Either Employed or a Freelancer with a Permit
Unlike in some countries, the UAE doesn’t have as much ambiguity around contractors vs. employees. You’re either on a visa with a labor card and treated as an employee, or you’re operating under a freelance permit, which is only allowed in specific free zones.
If you want full control over someone’s working hours, duties, and place of work, they need to be hired as a formal employee, and that’s where your EOR comes in. They’ll sponsor the visa and make sure everything is compliant.
Payroll, Tax, and Gratuity
There’s no personal income tax in the UAE, which is a big win for employees. But companies still have payroll responsibilities:
- Monthly Payroll: Must be paid in local currency (AED), often through the Wages Protection System (WPS) for mainland employees.
- End-of-Service Gratuity: This is a lump-sum payment owed at the end of employment if the employee stays for more than a year. It’s calculated based on base salary and years of service.
- Health Insurance: Mandatory in most emirates. Your EOR will arrange this and include the cost in their monthly pricing.
- GOSI (for GCC nationals): If your hire is from another GCC country, like Saudi or Bahrain, contributions to the General Pension and Social Security Authority apply.
All of this is handled by the EOR, but it’s good to know what’s included in that monthly fee.
Working Hours and Time Off
The standard workweek in the UAE is Monday to Friday, with Friday now being a half-day or off entirely in many government and private sector companies.
- Working Hours: Most contracts are 40–48 hours/week. Overtime is allowed but regulated.
- Paid Annual Leave: 30 calendar days per year, available after 1 year of service.
- Public Holidays: About 13–15 days annually, including Eid, National Day, and Islamic holidays.
- Sick Leave: After 3 months of service, employees are entitled to 90 days of sick leave per year (15 days at full pay, 30 at half pay, rest unpaid).
- Maternity Leave: 60 days (45 paid, 15 half-paid); some emirates may offer slightly different terms.
An EOR will apply all these entitlements based on the correct legal framework and employee type (mainland vs free zone).
Probation Periods and Termination
Probation periods in the UAE are standard and can go up to 6 months. During this time, either party can terminate the contract with 14 days’ notice. After probation, the notice period typically moves to 30 days.
If an employee resigns or is terminated, they are entitled to:
- Final salary (including unused leave)
- End-of-service gratuity (after 1 year)
- Visa cancellation and repatriation costs (covered by the employer or EOR)
Unlike some countries, at-will termination doesn’t exist here. All exits must follow legal procedures.
Language, Culture, and Managing UAE Teams
Arabic is the official language, but English is widely used in all business settings. Most of your hires, especially in Dubai or Abu Dhabi, will speak fluent English.
A few cultural notes:
- Formality matters. People tend to use titles and polite greetings.
- Fridays are sacred for many, and work calls/emails should be avoided unless it’s an emergency.
- Respect for religion and national customs is important, especially during Ramadan.
If you’re managing a remote UAE-based hire, be clear with expectations, document everything, and keep an eye on time zones.
Onboarding Time: What to Expect
EOR onboarding in the UAE can be quick or a bit slow, depending on the visa process. Here’s what you’re looking at:
- Average Time: 5–10 business days if the employee is switching from another UAE sponsor.
- Longer if New to UAE: If your employee is moving from abroad, getting the visa, Emirates ID, and medical clearance can take 2–4 weeks.
Some EORs offer “fast-track” onboarding in free zones, where things like visas and work permits are issued quicker.
EOR vs. Setting Up a Legal Entity in the UAE
If you’re hiring one or two people, using an EOR is a no-brainer. Setting up a company here involves choosing between mainland and free zone options, getting trade licenses, finding local sponsors, it’s a long process.
But if you’re planning to scale and hire a full local team, having your own legal entity might make more sense in the long run.
| Feature | EOR (Employer of Record) | Legal Entity in UAE |
|---|---|---|
| Setup Time | 5–10 business days | 4–8 weeks |
| Cost | Low (monthly per hire) | High (license, office, PRO fees) |
| Visa Sponsorship | Handled by EOR | You handle it (or hire PRO) |
| Payroll & Compliance | Fully managed by EOR | You’re responsible |
| Contracts & Labor Filings | Done by EOR | Must be handled internally |
| Best For | Fast hiring, remote teams | Long-term expansion, local ops |
What We’ve Seen in Practice
From what we’ve seen, most companies entering the UAE for the first time go the EOR route. It’s just easier, especially when you need to sponsor a visa or don’t want to open a mainland entity yet.
Plenty of startups stay with their EOR provider long-term, while some switch to a legal setup later once their team grows. Either way, an EOR is a smart, low-risk way to start hiring in the UAE without jumping through all the legal hoops yourself.
