The UAE has so many strengths as a place to work and play, it's easy for companies to lose sight of the complexities involved in hiring and maintaining talent in the country.
With its economic dynamism, expatriate-friendly environment and superior quality of life, it's no surprise the United Arab Emirates (UAE) plays a central role in the strategies of companies sourcing and deploying international talent in the Middle East. Over the past two decades the country has quickly emerged as the region's leading business hub, with steady enhancements to infrastructure, policies and international connectivity helping foster a large, diverse and vibrant labour market.
The UAE's strengths as a place to work and play are so evident that they sometimes cause companies to lose sight of the complexities involved in hiring and maintaining talent here. Though the market is in many respects admirably international and transparent, it is also home to unique human resources-related regulations and practices that, if not managed carefully, can create serious consequences for the employer. Here are a few examples that highlight the importance of working with local experts.
The process to secure working visas for expatriate professionals in the UAE can be more difficult and time-consuming than many companies expect, in part because of the number of different authorities involved, from immigration to the health authorities (medical tests) and the police department (CID background checks) – a minimum of six to seven separate entities in total.
While overarching laws are generally consistent nationwide, each of the UAE's seven emirates and 40 free zones have their own rules and regulations, meaning visa and labour requirements may vary from place to place - even within the same emirate. On top of this, many other factors, such as employee nationality and place of birth, age and level of education have an impact. This can lead to visa processing times varying between one week to several months.
Unwritten employment practices
Companies are sometimes surprised to find out that some standard practices are not explicitly referenced in labour laws or employment contracts. It is fairly common for example for local courts to consider a company handbook or country policy in a dispute case, meaning these documents can have legal ramifications. And corporate practices such as the granting of a certain benefit to the majority of (but not all) employees in a company, can become the basis for claims and negative court decisions if they are not applied consistently throughout the organisation. Typical examples include the provision of an annual flight ticket home or a certain number of paid holidays.
Payroll and penalties
The lack of company and individual taxes in the UAE simplifies the payroll process in many ways – but again there are discrepancies depending on the jurisdiction. Companies onshore and in certain free zones have to pay salaries through the Wage Protection System, an online mechanism that allows labour authorities to monitor corporate and employee bank accounts for payroll and visa discrepancies. Real or perceived delays or irregularities can carry heavy penalties, including high fines for the company and even possible jail time for local managers, who may be held personally liable.
A changing playing field
In line with the country's development trajectory, UAE authorities have overall shown continued determination to ease and enhance procedures for employing foreign talent. But improvements in one area are often accompanied by new or updated regulation in another, leaving companies struggling to keep up with a constant onslaught of change. New rules are sometimes introduced with little warning, and the exact manner in which they will be applied in practice is not always clear. For instance, the sudden introduction in 2017 of penalties for the late filing of financial audit reports also led to the suspension of government services, severely impacting visa processing.
Another example was the introduction of a good conduct certificate as a requirement for the visa process in early 2018. This led to many delays, as a number of countries were unable to issue such certificates within a reasonable timeframe, and the requirement was subsequently abandoned a few weeks later.
None of these issues are a serious challenge to the UAE's attractiveness as a destination for business or top talent. When the rules are followed and events proceed according to plan, hiring and payroll processes are typically smooth.
But given the complexity of processes, cultural differences and the potential costs of even relatively minor oversights, companies should consider engaging the services of an informed partner on the ground who is able to support the implementation and maintenance of their local HR and payroll frameworks, and alert them to rules, discrepancies or regulatory changes that may not be readily apparent to the external observer. These services could even extend to the editing of employee contracts, handbooks and country policies to ensure they are in line with local norms and practices.
This provider should also be able to represent the company in interactions with local authorities, and to bring reliable local expertise to services like payroll or the execution of an optimised visa process, proactively driving it through different stages of bureaucracy.
Beyond that, the right partner can also contribute to the 'soft' factors that help global executives transition seamlessly into a local role, by making recommendations to the company on the competitiveness of relocation packages or how to introduce new arrivals to the complexities of the local housing market.
This kind of support frees the company to focus on its core business in the UAE and the broader region, rather than a complex web of administrative procedures – and drives the retention and success of top-tier talent in a compelling and competitive marketplace.
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