- Overview:United Arab Emirates (UAE)
- Global HR Compliance
- Global PEO and Payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. Employee: Which Is Better?
Global Employer of Record (EOR) in the UAE
Global Employment Services
Global Expansion and Global Employment Challenges
When expanding your business operations to new countries, there are many important issues to consider to ensure compliance and avoid any potential problems on the global expansion journey.
These can include global HR administration issues such as securing business visas and permits, drafting employment contracts that comply with labor and tax laws across multiple jurisdictions, data privacy and intellectual property rights, global payroll and accounting considerations, and local statutory requirements.
There may also be a need to comply with various regulatory requirements relating to currency controls, foreign employment restrictions, and employee classification. Additionally, multi-jurisdictional tax considerations, risks, and liabilities should be taken into account, along with complex tax filing requirements and potential litigation risks.
Finally, being aware of the different languages, time zones, customs, and cultures you may encounter in these new markets is also essential. Doing the necessary homework on these issues in advance can help avoid any potential problems down the road.
Suppose you want to expand your business to the United Arab Emirates and employ a local workforce. In that case, Acumen International can help you legally onboard and payroll your employees without having to establish a local business entity. Our Global Employer of Record (EOR) talent engagement model is a simple and compliant way for businesses to start operations in the UAE.
Hiring and paying employees in the UAE can be challenging if you don’t know the country’s HR regulations. You’ll need to stay up-to-date on the constantly changing labor laws, which can cost you time, money, and resources. Plus, you must be careful to avoid risks like unintentional noncompliance and breaking the law.
With Acumen International as a global employment organization and your trusted partner, you can outsource the complicated task of hiring UAE talent to our global employment experts team. Acumen’s UAE Employer of Record provides an alternative global employment solution for safely hiring the UAE’s top talent easily, quickly, and cost-effectively.
What Is an Employer of Record?
An Employer of Record (EOR) is a business that employs workers on behalf of another company. The EOR arrangement is often used when an organization wants to hire employees in a foreign country. An Employer of Record can be used as an alternative to setting up a branch or company in the jurisdiction of employees. This can save time and money by avoiding having to go through the process of setting up a separate legal entity.
The Employer of Record is a global employment solution that helps companies expand their reach beyond their borders and compliantly hire the best talent from anywhere in the world. With Acumen’s Global Employer of Record solution, thousands of businesses have access to legal, financial, and cultural expertise to onboard, pay, and manage employees and contractors in 190 countries. Acumen is dedicated to helping companies succeed on a global stage and create a workforce that reflects the diversity of their customers and markets.
Benefits of Employer of Record in the UAE
- Global employment management centralization. Maximized control. Minimized risk
- A Global Employer of Record facilitates quick talent deployment and provides access to various employee benefits solutions to attract and retain your global talent.
- Eliminating and mitigating certain employment-related risks, including non-compliance and employee misclassification, through the shared responsibility and co-employment arrangement
- Scalable technology and infrastructure provided via the global EOR relationship
- Reduced and stable global employment management-related cost
- A global Employer of Record can facilitate risk-free, quick, and easy market entry by acting as your local legal entity, helping you to avoid the cost and time associated with incorporating into 190 countries
- A global Employer of Record allows you to make your global expansion 100% compliant and secure by keeping track and adhering to all local laws and regulations
- A global Employer of Record helps you remain agile and scales up or down in your selected foreign markets according to your business needs.
- A global Employer of Record facilitates global employment consistency and HR compliance.
- A global Employer of Record facilitates your business transition (acquisitions, mergers, close-downs).
- A global Employer of Record assumes full responsibility and liability for employing your global workforce on your behalf.
- A global Employer of Record ensures strict and legal adherence to UAE HR protocols.
- EOR’s global employment services can be delivered within a few hours to several days, even under the most challenging circumstances.
Permanent Establishment Risk: Addressing the Concerns with a Global Employer of Record
You may think you can get away with conducting business overseas without registering a legal entity, but you would be wrong. You might need to register your business even if you’re only sending an employee on a temporary assignment or establishing a small promotional office. Failing to do so can result in serious consequences.
Different countries have different laws regarding taxes, and a multinational company must take all of these into account when conducting business. The tax authorities of a particular country can determine which elements of the company’s economic activity take place in a particular country and how much profit is attributable to them. This can be a complex process, but ensuring that the company complies with all applicable laws is essential.
Flying Under the Radar of Local Tax Authorities
An organization’s physical presence in a country over a sustained period can trigger a taxable presence, or a “permanent establishment” (PE), in that country. This may occur if the organization generates revenue directly from activities in that country or if the organization’s activities contribute to the revenue of a group entity in that country.
As an organization operating overseas, it is crucial to be cautious of triggering a Permanent Establishment (PE) under local laws, as this can expose your company to unexpected tax liabilities, fines, and reputational damage. Failure to properly register a PE can have severe consequences for your business, so it is essential to understand the requirements of each country in which you operate.
Although the Organisation of Economic Co-operation and Development’s (OECD) base erosion and profit shifting (BEPS) project has had many far-reaching outcomes, one of the most significant is the modification of the definition of a permanent establishment. This change has important implications for businesses operating in multiple jurisdictions, as it may affect their tax liability.
The OECD is using Action 7 of BEPS to tackle common tax-avoidance strategies used by multinational corporations to avoid paying taxes in the countries where they do business. The organization is trying to stop companies from sidestepping local tax authorities by establishing related distributors rather than agencies or commissionaires.
As businesses look to expand into new markets, they must be aware of their tax liability in each country where they have a customer base. They must also be aware of the compliance obligations in each country where they sell their products. Suppose you are selling digitally and don’t already have this in-house expertise or don’t work with a global PEO & EOR partner. In that case, you need to start thinking about how to address this challenge immediately.
As it turns out, the trigger of a taxable presence in another country is not just an abstract challenge but a real non-compliance risk. Business in another country can come with hidden risks – like inadvertently triggering a taxable presence.
Acumen International has experience dealing with this problem – we were approached by a client who had unwittingly violated PE laws abroad. Two of the company’s employees were placed in one of the EU countries, working from home. However, since they weren’t generating much revenue directly in that country, the company decided to do their payroll registration instead of registering a complete corporate legal entity.
At Acumen International, we focus on satisfying the long-term employment needs of our clients with comprehensive global employment solutions that include onboarding, payroll, and employee benefits provision.
Partnering with Acumen relieves you of the need to focus on HR, so you can devote your time and attention to growing your business abroad. Let us handle your employment needs for hiring, onboarding, compensating, and terminating your global workforce in full compliance with related tax and legal requirements.
Global EOR (Employer of Record) Services: Save Up to 75 % of Employee Management Cost
|Average Cost & Time||Our Solution *|
|Time to Market||10+ weeks||72 hours|
|Legal Advisors Fees||$ 10 000 +||………….|
|Official Employment & Benefits||$ 20 000 +||………….|
|Incorporation & Liquidation Costs||$ 11 000 +||………….|
|Bank Account Setup||$ 2 000 +||………….|
|Maintenance costs, in-house staff to manage the foreign entity, payroll, and administration.||$ 25 000+||………….|
|The approximate total cost of new market entry**||$ 74 000 +||$ 15 000|
* Per one Employee
** Costs vary from country to country
Top 15 Reasons to Choose Acumen Global Employer of Record
1. Single Global Service Agreement
A global PEO can cover all your international projects within a single contract and add new employees and services as you expand your global workforce in new countries.
2. No Required Minimums
We accept projects of any length, with any number of employees.
3. Flexible Pricing
At Acumen, we adjust your pricing based on the project employee number, whether you need to scale up or down.
4. End-to-end Global Employment Solution
We manage all your global services, including employment, recruitment, immigration, legal and global HR consulting, saving you valuable time. And Acumen International covers the cost and saves you the effort of finding and selecting local employment-related service providers.
5. Avoid Lawsuits
If you don’t want to get sued, you should become a Global Employer of Record. Doing so limits your vulnerability to lawsuits by ensuring compliance procedures are followed, taxes are paid correctly, and payroll is appropriately managed.
6. Reduced Expenses
A global employer of record (EOR) will bundle the cost of payroll, benefits, and workers’ compensation onto one payroll. The EOR will also handle tax filing on your behalf. This means that you only pay one set fee per month for all services, which can save you time and money by preventing multiple invoices from being mailed to you.
7. No Entity Required
Employer of Record allows companies to expand internationally without setting up a legal entity in their target market. This makes it easier and less expensive for companies to do business in multiple countries risk-free. There’s no need to spend months or tens of thousands of dollars setting up a local entity in each target country. Avoid the hassle and leverage a Global Employer of Record instead.
8. Access to Global Talent Pool
The world is your oyster when it comes to talent acquisition. There is no limit to where your talent can take you. With the help of Global Employer of Record services, you can easily hire the best person in the world for the job, regardless of location. This way, you can create a global talent acquisition strategy to help your business thrive.
9. Rapid Remote Work Enablement
A Global Employer of Record helps to accommodate remote work by providing employees with competitive benefits and no changes to their day-to-day work life. A global EOR allows employees or contractors to move to a country of their choice, where they can legally work, without worrying about losing their job or changing their current lifestyle. Employer of Record allows you to get your organization enabled for remote work exceptionally quickly.
10. Worker Misclassification Risk Prevention
Employee misclassification? A global Employer of Record can help you avoid expensive fines and lawsuits, so you can run ahead of changing regulations globally.
If you expand your business by hiring independent contractors, be aware that their work might be too similar to what’s required of full-time employees according to local government regulations. This could put you at risk of violating employment and tax laws. To avoid penalties, consider hiring a global EOR (Employer of Record) company to manage your contractors in compliance with all applicable regulations.
Our team of HR professionals and legal experts will help you stay compliant, no matter where your employees or contractors are from.
11. Test New Markets Without Risk
A Global Employer of Record can help test the new markets without risk and unnecessary cost. Leveraging a global EOR arrangement gives companies the confidence to pursue growth opportunities internationally, knowing they can quickly exit any market if needed.
12. Global Hiring Continues Unimpeded by Regulatory Changes
If you use an Employer of Record, regulation changes will not necessarily affect your ability to hire talent globally. No matter what changes come about – such as Brexit, the U.S. H-1B visa program, or the UK’s IR-35 rules – you can protect your company by leveraging an Employer of Record service. This way, your employees can live where they are legally allowed to work and stay with your company.
12. Single End-to-end Global Employment Solution
Acumen International provides a convenient, all-in-one solution for expanding your business quickly and efficiently. With our solution, you can have your new employees up and running in just 72 hours. And because our solution is tailored to businesses with small or no HR and legal departments, you don’t have to worry about the hassle of managing payroll and benefits yourself.
13. 100% Compliance Ensured by EOR
A Global Employer of Record solution can help make the HR processes more effortless and less risky. An EOR can take on the responsibility of ensuring that new hires comply with local laws and regulations and handle all contracting issues. With an Employe of Record, you can hire employees with locally compliant contracts and know that your intellectual property will be protected.
14. 365/24/7 In-Country Support
The Employer of Record handles the HR and payroll for the in-country employees across all time zones in the languages of the countries you operate in.
15. Facilitated Business Transition
If you’re planning to merge with or acquire another company, you may wonder about the legalities of transferring your employees from one company to another. This is referred to as an “employee transfer,” It involves many risks, paperwork can be complicated and costly, and is often rife with errors. Think of an Employer of Record as the bridge between your companies during the transition period; it’s the legal entity that will manage all employee-related information transfers and communication before and after the merger, acquisitions, or a close-down.
How IT Companies Can Succeed in Converting Existing Contractors into Employees with a Global EOR in the United Arab Emirates
As the IT industry largely depends on unique skills and expertise, more and more IT companies are hiring talent internationally. To help you engage and reward your international IT talent with 100% compliance regardless of their location, we have designed an innovative Express Global Employment (EGE) solution.
With its help, many companies have already benefited from choosing employment or employer-employee relations versus conventional freelancing/contracting. See what they are saying.
Express Global Employment solution gives IT companies like yours a decisive advantage in the fight for top global IT talent. By offering stability and statutory benefits of official employment, you can win high-profile IT contractors/freelancers looking to change their status to employees. Companies gain maximum employee engagement and loyalty, with employees enjoying a stable workload and working on ambitious projects they might have never had as freelancers. With no need to look for new projects all the time, employed programmers stay with one company longer, leading to lower staff turnover. In addition, when using our PEO solution, you get protected from any employee-independent contractor misclassification risks and unexpected costs.
We can help you recruit international IT talent with subsequent employment in any country worldwide if you have not found the candidates yet.
Spotlight on the UAE
The United Arab Emirates is a nation-state made up of seven different emirates. It features an open economy and a relatively high standard of living.
- Location: The UAE is in Western Asia, at the eastern end of the Arabian Peninsula. It shares land borders with Oman and Saudi Arabia and maritime borders with Iran and Qatar.
- Capital: Abu Dhabi became the official capital of the UAE in the early 1990s.
- Population: As of August 2021, the population of the UAE is estimated to be 10,030,546, representing about 0.13% of the total world population.
- Labor force: According to World Bank data, the total labor force in the UAE in 2020, comprised of workers aged 15 and older, was 6,820,222.
- Official language: Arabic is the official language of the UAE, and all official business is conducted in Arabic. However, the population comprises diverse ethnic backgrounds and cultures, and many people speak English.
- Ease of Doing Business ranking: As of 2020, the UAE is ranked 16th by the World Bank for ease of doing business out of 190 countries worldwide.
- Currency: The official currency in the UAE is the UAE Dirham (AED). The Dirham is pegged to the US Dollar, making it one of the world’s most stable currencies.
- Minimum statutory salary: The UAE does not mandate a minimum wage. The only legal stipulation is that wages in the UAE must be sufficient to cover the basic living needs for employees and their families. However, high school graduates can expect to make a minimum of AED 400 per month, and college grads can expect to make at least AED 500 per month in 2021.
- Developing industries: Until recently, the UAE’s economy has largely depended on the oil and gas industry. However, economic diversification in recent years has inspired the growth of manufacturing, construction, hospitality and tourism, real estate, finance and technology.
- Main Trading partners: The UAE’s main export partners are India, Japan, China, Oman and Saudi Arabia, respectively. Import partners include China, India, USA, UK and Germany, in that order.
- Holidays: The UAE’s major holidays include New Year’s Day (January 1), Eid Al Fitr Eve and Day (celebrated in May), Day of Arafat (celebrated in July), and Eid Al Adha (also in July).
Employment Law in the UAE
The UAE has multiple regulations in place to govern business operations and protect labor rights. The lion’s share of UAE labor laws are directed at foreign nationals, who comprise a substantial percentage of the country’s workforce. The laws governing the employment of foreign nationals are extensive.
- Work permissions must be obtained from the Cabinet of Ministers, and all dealings with the Cabinet must be conducted in Arabic.
- Work permits are required for foreign nationals and are only issued when there are no local citizens to fill open positions.
- Wages must be paid at least once a month or according to the employment contract terms.
- The employer must deposit wages into banks and financial institutions designated by the UAE.
- Failure to pay wages according to their due date can result in stiff penalties for employers.
If your company plans to employ foreign nationals or ex-pats in the UAE, it is critical to adhere to the legal mandates of the Cabinet of Ministers. Since all interactions with the Cabinet must be conducted in Arabic, you will need Arabic translators to assist with communications and procedures.
To avoid the inconvenience and complexities of navigating UAE labor laws, consider partnering with Acumen International. Our EOR solution in the UAE paves the way for your business success by hiring and onboarding employees on your behalf. We take care of all the HR details, including payroll, taxes, benefits, and more, so you can focus on your business goals.
Employ your Selected Workforce with Acumen’s Employer of Record / EOR in the UAE
As an Employer of Record services provider, Acumen International cultivates the most advantageous conditions to help your business break into the UAE market. Our global employment services include legal engagement of top local talent on your behalf, compensation of your workforce with competitive wages, and provision of perks and benefits that retain them as loyal employees.
Acumen International’s EOR in the UAE helps employers and service companies who represent international clients hire and compensate local employees in the UAE. We offer professional assistance to meet our client’s global employment needs, such as:
- Global talent acquisition and retention
- Help with global expansion, so you can quickly enter new global markets without legal and HR compliance risks.
- Provision of local support for our international clients and their ex-pat employees
Legally Onboard and Payroll Employees in the UAE Global Employer Of Record
Acumen’s Global Employment Solution for engaging and payrolling your remote workforce in the UAE is designed to help international companies like yours hire and compensate your local and ex-pat workforce.
Our UAE EOR ensures that you comply with all legal and procedural requirements to minimize risks and mitigate losses.
In addition to legally onboarding local citizens, we help organize work permits, sponsor business visas for your expatriate team via our Employer of Record solution, and employ them on your behalf once legal permissions have been attained.
With Acumen, you can rest assured that all legal requirements are met for compliant hiring and compensating your local and expatriate employees in the UAE and 190 countries worldwide where we serve our international clients.
Acumen International strives to build relationships with our clients based on trust, professionalism, and long-term collaboration. We aim to help your company operate effectively and efficiently in global markets so that you can grow your business with minimal risks and obstacles.