How to Hire Employees in the UAE Without a Local Entity

Hiring employees in the UAE without establishing a local entity is a common scenario for international companies entering the market. If a foreign company wishes to employ staff legally without opening its own company in the UAE, it can achieve this through a properly licensed UAE employment structure. One practical way to accomplish this is by using an Employer of Record (EOR).

An EOR works by becoming the employee's legal local employer and sponsoring them. The EOR manages the employment relationship, including the employment contract, work permit, immigration, payroll, WPS, statutory requirements, and ongoing administration. The client company retains control over the employee's work, including their role, responsibilities, projects, performance, working arrangements, and day-to-day activities.

Masdar EOR specializes in providing compliant mainland employment solutions in the UAE, allowing employees to work remotely, from client offices, or at third-party project sites. For industries such as oil and gas, additional security or site passes may be necessary. The onboarding process for employees through an EOR structure involves obtaining the necessary documents, securing a work authorization, and managing various compliance requirements, such as work permits, immigration, medical fitness processing, Emirates ID registration, mandatory health insurance, statutory registrations, payroll administration, wage protection system compliance, end-of-service benefit administration, pension administration, contract renewals, and employee offboarding.

Wage Protection System (WPS) is a crucial aspect of UAE payroll compliance. It is a government-controlled salary monitoring system that ensures employees receive the salary registered under their employment contract. Local employers, like Masdar EOR, process salaries through approved UAE payroll channels in local currency, using the employee's registered employment details.

In the case of an EOR employee, the overseas client must manage the compliant UAE payroll process rather than transferring salary directly to the employee.