How to Hire Employees in the UAE Without a Local Entity
How can a foreign company hire employees in the UAE without setting up its own local entity?
This is a common situation for international companies entering the UAE.
You may want to hire one employee, build a small team, mobilise people for a project, or simply test the UAE market before committing to establishing your own company.
The question is:
How do you employ those people legally if you don’t have a UAE entity that can sponsor and employ them?
I’m Prosenjit Biswas, Head of Marketing at Masdar EOR, and in this video, I’ll explain how companies can hire employees compliantly in the UAE without establishing their own local entity.
Let’s start with the short answer.
Yes, a foreign company can employ people in the UAE without immediately opening its own company.
However, those employees need to be employed through an appropriately licensed UAE employment structure.
One of the most practical ways of doing this is through an Employer of Record, or EOR.
How does EOR work in the UAE?
Under an EOR arrangement, a properly licensed UAE company becomes the employee’s legal local employer and sponsorship vehicle.
The EOR manages the formal employment relationship, including the UAE employment contract, work permit, immigration, payroll, WPS, statutory requirements and ongoing employment administration.
The client company continues to manage the employee’s actual work: their role, responsibilities, projects, performance, working arrangements and day-to-day activities.
In simple terms:
You manage the work.
The EOR manages the legal employment framework.
But there is an important UAE-specific point that international companies should understand.
EOR in the UAE is not simply about having any UAE company.
For employees working across the mainland, the employment structure should operate under the appropriate mainland manpower/labour-on-demand licensing framework.
This is particularly important where employees will work at client sites, project locations, industrial facilities or other third-party premises.
Free-zone employment structures are different and can carry restrictions on where and how employees may legally be deployed. A free-zone company should not automatically be treated as equivalent to a properly licensed mainland manpower solution.
At Masdar EOR, our UAE solution is structured specifically for compliant mainland employment and workforce deployment.
This enables us to support employees working remotely, from client offices and across third-party project sites, subject of course to any site-specific access requirements.
For specialised industries such as oil and gas, additional security or site passes may also be required. Masdar supports projects within this environment, including ADNOC-related workforce requirements and applicable site-access processes.
Who can be employed?
Through an appropriate EOR structure, companies can employ UAE nationals, GCC nationals and expatriate employees.
The onboarding requirements differ depending on the employee’s nationality and existing residency status.
A UAE national does not require a residence visa, but the appropriate employment registration, work permit and UAE pension requirements still apply.
Emiratisation requirements sit with the UAE employing entity.
GCC nationals generally do not require UAE residence sponsorship, although appropriate employment registration and applicable GCC pension or social-insurance requirements must still be managed.
For most non-GCC expatriates, the process involves a UAE work permit and residence sponsorship.
Depending on the candidate’s circumstances, this can include immigration processing, medical fitness testing, Emirates ID registration, health insurance and other statutory enrolments.
Some employees may already hold UAE residency through a spouse or family member, or hold Golden Residency.
In those cases, it may not be necessary to issue a new residence visa, but the employee still requires the appropriate work permit before legally commencing employment.
And this is important:
A tourist, visit or business visa does not provide the right to work in the UAE.
The appropriate employment authorisation must be obtained before the employee starts working – normally once the required work permit has been issued.
Certain skilled or regulated professions may also require qualification attestation, professional registration or additional government approvals.
What does the EOR manage?
The EOR effectively provides the local employment infrastructure that the foreign company does not have.
This can include:
- Local employment contracts
- Work permits and immigration
- Medical fitness processing
- Emirates ID
- Mandatory health insurance
- Statutory registrations and enrolments
- Payroll administration
- Wage Protection System – or WPS – compliance
- End-of-service benefit administration
- Pension administration where applicable
- Contract renewals
- Employee offboarding and visa cancellation
Masdar acts as the legal employer and compliance vehicle, while the client remains responsible for managing the employee’s day-to-day work, performance, leave and operational activities.
What exactly is WPS?
WPS – the Wage Protection System – is an important part of UAE payroll compliance.
It is essentially a government-controlled salary monitoring system designed to ensure employees receive the salary registered under their employment contract.
For employees falling within WPS requirements, the local employing entity processes salary through approved UAE payroll channels, in local currency, against the employee’s registered employment details.
This creates a direct link between the employee’s legal employer, employment contract and salary payment.
For an EOR employee, this is therefore not simply a matter of the overseas client transferring salary directly to the employee.
The local employer must manage the compliant UAE payroll process.
How long does UAE onboarding take?
For candidates already inside the UAE, the process is generally relatively straightforward once we have the required documentation.
For a standard in-country case, the initial work authorisation can typically be obtained in approximately 10 working days, allowing the employee to commence work once the required work permit is in place.
The complete immigration process – including residence procedures, medical, Emirates ID and related formalities – typically takes around 20 working days.
For candidates coming from overseas, more time should be allowed.
The variable is often not the UAE processing itself, but how quickly the candidate can prepare the required documentation in their home country.
Depending on nationality and job category, this may include qualification attestation, notarisation, police clearance, medical testing and other supporting documents.
Candidates relocating with dependants may also need attested marriage and birth certificates and additional family documentation.
So for overseas mobilisation, it is important to start document preparation early.
What should you budget for?
The total cost of employing someone through an EOR is more than simply salary plus a management fee.
Depending on the employee, it may include:
- Salary and contractual allowances
- Work permit and immigration fees
- Medical and Emirates ID costs
- Health insurance
- End-of-service benefit accrual
- EOR management fees
- Pension contributions for UAE or applicable GCC nationals
For expatriates employed under skilled job categories, Emiratisation-related costs may also apply at the employing-entity level.
This is because the UAE’s Emiratisation framework creates national workforce obligations for employers operating within applicable skilled employment categories.
Masdar currently does not apply the same Emiratisation cost allocation to low-skilled roles.
Certain projects can also require additional costs for security clearances, oil-and-gas passes or specialised site access.
A good EOR provider should therefore give you a clear line-by-line cost breakdown before onboarding begins, rather than presenting one headline number and introducing additional costs later.
Direct EOR versus partner-based EOR
This is another area international companies should understand.
You may see global EOR companies advertising that they operate in 100, 150 or even 180 countries.
That does not necessarily mean the company that you are contracting with is the company actually employing your worker in the UAE.
Even where an international provider has incorporated its own UAE company, that company may not hold the specific licensing required to deploy employees under a manpower outsourcing model.
As a result, another locally licensed company may ultimately sit behind the arrangement.
This does not automatically make the solution non-compliant, but it creates another layer between the client, the EOR provider and the employee.
At Masdar EOR, we specialise specifically in the GCC and operate through direct local mainland employment solutions.
That means we understand not only UAE employment and immigration, but the practical requirements of deploying people into client workplaces and projects throughout the region.
What should you ask an EOR provider?
Before selecting a provider, don’t simply ask:
“Do you provide EOR in the UAE?”
Ask how the employment is actually structured.
Does the local employing entity hold the appropriate mainland manpower or labour-on-demand licensing?
Can employees legally be deployed to the location where they will actually work?
Can the provider support both office-based employees and project/site-based personnel?
Can they support skilled and lower-skilled categories?
How are Emiratisation obligations managed?
How is WPS payroll handled?
Can they support specialist project requirements such as oil-and-gas or security access?
And importantly:
Who actually carries the employment responsibility in-country when something goes wrong?
Those questions tell you much more about an EOR solution than simply asking whether a provider has “an entity in the UAE.”
When might you need your own UAE entity?
EOR works particularly well when you want to hire employees without immediately building your own employment infrastructure.
But if your organisation intends to establish a substantial permanent operation, conduct activities requiring its own commercial licence, or contract locally for regulated activities, establishing your own UAE entity may eventually become appropriate.
EOR can therefore work as a long-term employment solution, a project-based solution, or as a bridge while your own UAE operation is being established.
The key takeaway
You do not necessarily need to establish your own UAE company before hiring employees in the UAE.
You do, however, need the correct local employment structure.
That means:
The right licence.
The right work authorisation.
Compliant local payroll and WPS.
And a provider that understands how employment actually works on the ground in the UAE.
At Masdar EOR, we provide direct employment and workforce solutions across the UAE and all six GCC countries.
I’m Prosenjit Biswas, Head of Marketing at Masdar EOR.
Subscribe for more practical guidance on employment, visas, payroll and workforce compliance across the UAE and wider GCC.
A few positioning changes I deliberately made
I removed the contractor/freelancer discussion almost completely. I agree with you: mentioning it prominently inadvertently advertises an alternative to the service the video is trying to sell, and it overstates how relevant that model is to normal UAE workforce deployment.
I also made “having a UAE entity is not the same as having the right UAE licence” a central message. That’s commercially much stronger for Masdar. It gives viewers something useful they probably didn’t know and immediately differentiates you from global aggregators.
I would also not include GDRFA, ICP, DIFC and ADGM explanations in this video. They’re accurate terminology, but they clutter what should be a commercial explainer. Those would make good standalone videos: “Mainland vs Free Zone EOR in the UAE” and “Why having a UAE entity doesn’t necessarily mean an EOR provider can legally outsource workers.”
One small correction to your dictated point: I would avoid saying only the sponsoring entity can ever pay salary into a UAE account as an absolute legal statement. The stronger and safer marketing wording is what I’ve used above: the legal employer is responsible for ensuring WPS-compliant salary processing through the required approved channels. That gets your operational point across without creating an unnecessarily broad legal claim.
Also published on Medium.
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