The Ultimate Guide to Hiring Employees in Dubai
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The Ultimate Guide to Hiring Employees in Dubai
You’ve decided to expand your business to Dubai and are excited about the opportunities that await. As you explore hiring employees in Dubai, you'll appreciate the structured and comprehensive system that has been thoughtfully designed. The recruitment process in the UAE features a well-organised framework of regulations and procedures that ensure legal compliance while protecting both employers and employees. This article will walk you through a complete guide on hiring employees in Dubai to help you completely understand hiring in the UAE.
Cercli's global HR system is valuable for clarifying how to hire employees in Dubai. Our product streamlines processes so you can focus on finding the right talent for your business.
Understanding Dubai's Employment Landscape
Dubai's employment landscape is one of the most vibrant and fast-growing in the region, known globally for its innovation and efficiency. With a solid infrastructure, top-tier amenities, and business-friendly policies, the Emirate has established itself as a leading destination for professionals and companies worldwide.
Cultivating an Attractive and Inclusive Talent Hub in Dubai
The UAE government prioritizes a balanced and inclusive labour market across all emirates, combining world-class infrastructure, streamlined hiring processes, and strong employee welfare commitments to attract skilled professionals and support business growth nationwide.
A Smooth Process for Sponsoring Foreign Employees in Dubai
Dubai offers a structured yet efficient sponsorship process for businesses looking to hire foreign talent. It is governed by federal and local authorities. Once a company is duly established and licensed, it can sponsor foreign employees to join its workforce.
Key government entities involved include:
- Ministry of Human Resources and Emiratisation (MoHRE)
- Federal Authority for Identity, Citizenship, Customs and Port Security
- The General Directorate of Residency and Foreigners Affairs (GDRFA) in each emirate
To sponsor foreign workers, employers are invited to demonstrate:
- The position requires specialised expertise complementary to the growing pool of highly qualified Emirati professionals.
- The employee has valid residency and has lawfully entered the UAE.
- The employee possesses relevant academic or professional qualifications.
Fair, Transparent, and Multilingual Employment Contracts in the UAE
Dubai strongly emphasises contract transparency. Employers must provide a standard employment contract that is fully aligned with the UAE’s labour laws and signed by both parties. Contracts are offered in 11 languages, making them accessible and understandable for employees of all backgrounds.
Employers must register job offers with MoHRE before visa application, ensuring compliance and accountability. The UAE's progressive approach to employment integrity means that contract terms must be accurately represented, reinforcing the nation's unwavering commitment to fair and ethical employment practices.
Breaking Down the Sponsorship Process for Employers
The sponsorship process to hire foreign employees in Dubai consists of two clear phases:
Phase 1: Work Permit (Labour Card)
- An eSignature card will be issued by the MoHRE following inspection of the business premises.
- Submission of employee documents: passport copy, educational certificates, photograph, and any professional approvals (e.g., medical or educational roles).
- Submission of a bank guarantee of AED 3,000 per employee (refundable upon cancellation).
Phase 2: Residency Visa
- Coordinate with the GDRFA to issue a firm immigration card.
- Completion of medical checks, Emirates ID registration, and final visa stamping.
The UAE's efficient system allows a generous 60-day window to complete this process, after which pre-approval may need to be renewed, ensuring timely processing of employment arrangements. This ensures that businesses act responsibly and maintain timely, legal employment.
Legal Framework and Worker Welfare
The UAE’s employment laws are designed to protect both employees and employers. For example:
- Working Hours: The standard working hours for private sector employees are eight hours per day or 48 hours per week, with clear limits on daily and weekly overtime to protect employee well-being. During Ramadan, working hours are reduced by two hours daily unless the job necessitates longer hours.
- Maternity & Parental Leave: Mothers receive 60 days of paid maternity leave, while male and female employees are entitled to 5 days of paid parental leave.
- Annual Leave: Employees earn 30 days of paid annual leave after one year of service.
- Overtime Compensation: Day and night or holiday overtime is compensated at a premium of 25% and 50% respectively, showcasing a fair wage policy.
- Termination & Severance: Legal protections ensure fair notice periods (30–90 days) and commensurate severance pay depending on tenure.
These laws reflect the UAE’s commitment to fostering a high standard of labour relations in line with global best practices.
Emiratisation is Mandatory and Enforced
The UAE government is actively pushing for more Emiratis in the private workforce through its Emiratisation initiative.
- Companies with 20-49 employees in select sectors must hire at least two Emiratis by the end of 2025.
- Larger companies (50+ employees) must meet a two per cent annual Emirati workforce growth target.
- All Emirati employees must be registered on Nafis, enrolled in the pension and retirement system, and paid through the Wage Protection System (WPS).
Balancing Penalties and Incentives in Emiratisation
To ensure the success of this visionary national initiative, the UAE has implemented a comprehensive accountability framework. From January 2026, organisations not meeting their 2025 Emiratisation targets may be subject to financial contributions of AED 108,000 per position.
A High-Tech, High-Performance Economy
As Dubai continues its strategic shift toward a knowledge-based economy, demand for skilled workers in sectors like fintech, green energy, healthcare, logistics, and artificial intelligence is booming. The city offers:
- Cutting-edge digital infrastructure
- Free zones tailored to industries
- A tax-friendly environment
This fosters an ecosystem abundant in employment opportunities and long-term career development.
A Gateway to Global Talent
The UAE’s forward-looking policies, including introducing golden visas, freelance permits, and remote work visas, demonstrate Dubai’s commitment to flexibility, innovation, and talent retention. These initiatives ensure that Dubai remains a top destination for jobs and long-term professional growth.
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How To Hire Employees In Dubai
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Before recruiting staff, your business must be fully established and hold a valid trade licence. This involves:
- Choosing the appropriate legal structure (mainland or free zone)
- Securing commercial premises
- Registering your business with the relevant authorities
Only licensed companies are authorised to sponsor and employ workers in the UAE.
Obtain an eSignature Card
Once your business is operational, you must apply for an eSignature card from the Ministry of Human Resources and Emiratisation (MoHRE). This digital card authenticates your company’s official signatory and is a prerequisite for all employment-related applications. The MoHRE may inspect your business premises before issuing the card to ensure compliance with UAE labour standards.
Apply for Pre-Approval Work Permits
You can apply for pre-approval work permits for the individuals you wish to hire. These permits are also processed through MoHRE. The following documents are required for each applicant:
- Copy of the company’s valid trade licence
- eSignature card issued by the MoHRE
- Copy of the employee's passport (valid for at least six months)
- Recent colour photograph of the employee with a white background
- Verified academic or professional qualification (if required)
- Additional approvals from regulatory bodies for certain professions, such as doctors, nurses, teachers, or pharmacists
This stage verifies the worker’s qualifications and the employer’s eligibility to sponsor foreign talent.
Determine the Employee Quota
A strategically designed workforce planning system overseen by the MoHRE optimises the distribution of foreign talent your company can sponsor. Factors influencing your quota include:
- The size and type of your business
- The nature of your operations and workforce demands
- The floor area of your commercial premises
- Your company’s legal structure
This system ensures a balanced labour market and encourages the employment of local talent wherever possible. Employers can request a quota review if their operational needs change.
Fulfil Key Terms and Conditions
To ensure the hiring process proceeds without disruption, the following conditions must be met:
- The prospective employee must not have a valid work permit with another company.
- The employee must be at least 18 years of age.
- The job title must align with your company’s licensed activity.
- The business licence must be valid and unrestricted of violations.
A fully refundable bank guarantee of AED 3,000 per sponsored employee provides financial security within the system—this deposit is returned upon completion of employment and proper cancellation of the labour card. Meeting these criteria ensures regulatory compliance and streamlines the visa process.
Complete the Sponsorship Process
Once the pre-approval work permit is granted, employers have 60 days to complete the following procedures:
- Arrange the employee’s medical fitness test.
- Apply for the employee’s Emirates ID via the Federal Authority for Identity and Citizenship.
- Obtain the labour card number from MoHRE
These steps must be completed within the permit’s validity window. To maintain the system's efficiency, completing these steps within the validity window is essential; otherwise, a fresh application may be required.
Finalise the Residency Visa
The final step is approaching the General Directorate of Residency and Foreigners Affairs (GDRFA) in Dubai to request a firm immigration card. This enables your business to open an official file with the immigration authorities. Once this is completed:
- The employee’s residency visa will be stamped in their passport.
- The employee will officially be under your company’s sponsorship.
- This residency visa allows the employee to live and work in Dubai for their employment contract legally.
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Payroll and Taxes Requirements for Hiring in Dubai
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The UAE does not impose personal income tax on individuals, meaning there is no federal income tax on individuals, providing a tax-efficient environment for employees. Employees are not required to register for tax purposes or file income tax returns; employers are not obligated to withhold income tax from employee salaries.
Navigating Corporate Tax Exemptions and Sector-Specific Rules
While corporate tax is now applicable to certain businesses under the UAE Corporate Tax Law (effective from 2023), this typically does not impact employee payroll, except for specific sectors such as oil and gas or foreign banking, where Emirate-level taxation may apply.
Social Security Contributions: Applicable Exclusively to UAE Nationals
Social security obligations in Dubai only apply when employing UAE nationals, not expatriates. These contributions are directed to the General Pension and Social Security Authority (GPSSA).
Standard Contribution Rates for UAE Nationals
- Employer: 12.5% of the employee’s gross monthly salary
- Employee: 5% (deducted from salary)
- Government: 2.5% (additional contribution for private sector Emirati employees)
Key Notes
- These contributions must be submitted monthly through the UAE Funds Transfer System (UAEFTS).
- Payments are due before the 15th of the following month.
- A daily late fee of 0.1% is applied to any overdue amounts.
New Employees (Post-October 31, 2023)** – Federal Law No. 57 of 2023
A revised contribution scheme applies to UAE nationals who joined the workforce after 31 October 2023:
- Employer: 15%
- Employee: 11%
- Government: 2.5% of the employer’s share (if the salary is under AED 20,000)
This law enhances social protection for younger Emiratis, particularly within the private sector.
Pensions and End of Service Benefits
While expatriate employees are not covered under the UAE's social security system, they are entitled to an End-of-Service Gratuity (EOSG), an essential statutory obligation for employers.
Gratuity Entitlement
Employees who complete at least one year of continuous service are entitled to this severance payment. The calculation is based solely on the employee’s basic salary, excluding allowances.
Calculation under a Limited-Term Contract
- First 5 years: 21 days’ basic salary for each year
- Beyond 5 years: 30 days’ basic salary per additional year
- Cap: The total gratuity cannot exceed two years’ gross salary
Deductions and Forfeiture
Any unpaid leave can be deducted from the gratuity. Gratuity entitlements may be withheld by Article 44 of the UAE Labour Law in cases of dismissal for cause (as defined in Article 44 of the UAE Labour Law).
Pro-Rata Rule
Employees who leave after completing more than one year but under five years of service receive a prorated gratuity based on their time served.
Payment Deadline
Employers are required to settle the gratuity within 14 days of the employee's last working day. Failure to do so may result in legal consequences or labour complaints.
General Payroll Practices
Although there is no income tax, employers must manage payroll professionally and in line with UAE labour laws. This includes:
- Issuing monthly salary payments via the Wage Protection System (WPS), a secure platform regulated by MoHRE.
- Maintaining accurate employee records, including payslips, contracts, leave balances, and salary adjustments.
- Factoring in mandatory benefits such as overtime payments, leave payouts, and end-of-service gratuities.
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Compliance Risks When Hiring Talent In The UAE
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1. Ensure Proper Worker Classification
For optimal compliance with the UAE's progressive labour framework, understanding the distinction between employees and independent contractors is essential. The UAE distinguishes sharply between full-time employees, who are protected under the UAE Labour Law, and self-employed contractors, who are not.
Risk Exposure
Misclassified contractors may later be recognised as employees by the authorities or courts. Employers may be liable for retroactive salary payments, penalties, and potential legal claims, unpaid social security contributions, and even legal claims for benefits such as end-of-service gratuity.
Best Practice
Only hire contractors with clearly defined scopes and payment terms for short-term, project-based work. Use localised contracts that reflect the true nature of the working relationship.
2. Optimise Payroll Contribution Accuracy
Social security contributions are only required for UAE nationals, but mistakes in calculating or submitting these payments can create serious compliance risks.
What to Watch
The standard contribution split is 12.5% by the employer and 5% by the employee, with the government contributing 2.5%. New Emiratis joining the workforce after October 31, 2023, are subject to updated rates under Federal Law No. 57 of 2023, which raises employer obligations to 15%.
Consequences of Non-Compliance
Fines and penalties, including 0.1% of the unpaid daily contribution, may negatively impact your employer's reputation and compliance record. Employee dissatisfaction or loss of benefits can also damage your brand.
3. Strategic Planning for Permanent Establishment Considerations
Establishing a physical or sustained operational presence in the UAE mainland may result in a Permanent Establishment (PE) classification, subjecting your company to corporate tax and regulatory obligations.
- Risk Indicators: Hiring employees from an office or residence in the UAE and engaging in profit-generating activity from a UAE location without proper licensing.
- How to Mitigate: Consider setting up in a Free Zone or engaging a local Employer of Record (EOR) to handle compliance while avoiding direct tax exposure. Regularly review your team's operations to assess PE risk.
4. Understand the Differences in Employment Laws Between Free Zones and the Mainland
The UAE is divided into mainland and free zones, and employment regulations can differ substantially.
Key Risk Factors
Each free zone authority enforces employment laws, which may differ from the Federal Labour Law. Contract templates, visa sponsorship procedures, and dispute resolution mechanisms may be zone-specific.
Tip: Always consult the specific Free Zone Authority (FZA) before onboarding employees or contractors in a particular jurisdiction.
5. Immigration and Work Permits in the UAE
Foreign nationals must obtain proper work permits and residency visas before beginning employment in the UAE. Employers are responsible for sponsoring and processing these applications through MoHRE and the General Directorate of Residency and Foreigners Affairs (GDRFA).
Non-Compliance Risks
Employment of individuals without valid work permits may result in significant regulatory penalties, blacklisting, or even business suspension. Employees without proper documentation may be deported or barred from future entry.
Related Reading
- How To Calculate Salary Per Day In UAE
- Unpaid Leave UAE
- Leave Salary Calculation In UAE
- HR Duties And Responsibilities In UAE
- How To Calculate Public Holiday Pay In UAE
Book a Demo to Speak with Our Team about Our Global HR System
Transform your HR operations with Cercli, the only platform built specifically for MENA businesses that unifies workforce management needs in one powerful system. Manage your entire team, whether local or distributed across 160+ countries, with our comprehensive solution that handles:
- Multi-currency payroll
- Leave management
- Onboarding
- Compliance documentation tailored to the unique requirements of the MENA region.
Book a demo with our team today to learn more!
