UAE Country Guide 2022

UAE

The UAE is a constitutional federation of seven Emirates, situated on the Asian continent, with a warm climate and a rapidly expanding infrastructure in technology, economics and construction. There are more than 200 nationalities living and working there, and it boasts a literacy rate of close to 95%.

And while their  social security system may not yet be up to par with other countries, the UAE has some of the highest pay thanks to its tax-free salaries.

  • Capital: Abu Dhabi
  • Spoken Languages: Arabic, English
  • Currency: Dirham (AED)
  • Minimum monthly wage: N/A

Entry Visa

An Employment Entry Visa (Pink Visa) is obtained by the employer via the Ministry of Labour (MOL), provided they get approval for a visa quota. The MOL must also approve the job contract, to make sure that the position could not be filled by a UAE national. 

Upon entry to the UAE, the prospective employee has 60 days to obtain a residence visa and work permit.

Work Permit / Residence Permit

Individuals must apply for a bio-metric Emirates ID, and go through medical screening. After this step, the residence permit can be obtained by providing the aforementioned documents along with their passport and copy of the hiring company’s commercial license. The employee must then fill in a work permit application form and provide the employment contract in order  to get the work permit and start their employment.

A residence visa is valid for 1-3 years and has the possibility of renewal.

Social Security Registration

There are no social security contributions for foreign nationals working in the UAE.

Working Hours

The maximum allowed working hours are 8 hours a day/ 48 hours a week since the standard working week is 6 days. During the month of Ramadan, the working hours are reduced by 2 hours a day.

Public Holidays

  • 01 January (New Year)
  • Eid Al Fitr (5 days, usually in May)
  • Arafah Day (Not s standard date)
  • Eid Al Adha (3 days, starts the day after Arafah)
  • Islamic New Year (Not a standard date)
  • 8 October (Birthday of Prophet Mohammed)
  • 01 December (Commemoration Day)
  • 02-03 December (UAE National Day)

Vacation Allowance

Employees are entitled to 30 days of annual leave after they have completed one year of service. If a year has not yet passed, the allowance is 2 days per month after 6 months. If the employee does not use  all of their annual leave, they may carry it forward to the next year, or receive monetary compensation.

Sick Leave

Employees are entitled to 45 days of paid sick leave per year.

Maternity / Paternity leave

  • Maternity: Up to 60 days after the 6th month of pregnancy.
  • Paternity: 5 days within 6 months after the day of birth.
  • Bereavement: 5 days in case of death of a spouse. 3 days in case of death of a close family member.

Termination & Severance

Limited-term contracts

If the employer terminates the contract, the employee is entitled to the following severance pay:

Period of continuous employmentAmount
< 1 Year0
1-5 Years21 day’s basic pay per year worked
> 5 Years30 day’s basic pay per year worked

Unlimited contracts

Upon termination of the contract from either side, the employee is entitled to the following severance pay:

Period of continuous employmentAmount
< 1 Year0
1-3 Years1/3 of 21 day’s basic pay per year worked
1-3 Years2/3 of 21 day’s basic pay per year worked
> 5 years21 day’s basic pay per year worked

Notice Period

The minimum notice periods is 30 days, and the maximum is 90 days. This applies to both employer and employee.

Social Security

There are no social security contributions for foreign nationals working in the UAE.

Pension

Foreign employees in the UAE are not entitled to any pension benefits.

Taxation

There is no personal income tax in the UAE.

Health Insurance

Foreign nationals employed in Abu Dhabi and Dubai are required to have health insurance. This is paid fully by the employer, and in the case of Abu Dhabi must also cover the employee’s spouse and up to 3 children.

Cost of Living

The cost of living in the UAE can be quite expensive, especially in cities such as Dubai or Abu Dhabi, with most of the expense going towards accommodation. The estimated monthly cost for a single person is around AED 10,000, with AED 6,500 going to rent.


How We Can Help

We provide a full set of services in UAE allowing corporate clients, recruitment agencies and professional contractors to operate in an optimal manner while ensuring that all local employment obligations are taken care of.

Access Financial offers the following solution in UAE:

  • Payroll Outsourcing
  • Employer of Record (EOR) Solution
  • Work Permits

If you would like to discuss how Access Financial can help in UAE, please contact us.

Disclaimer

WE HAVE PREPARED THIS AS A GUIDE ONLY; IT DOES NOT FORM PART OF AN OFFER. PLEASE REQUEST ILLUSTRATIONS BASED ON YOUR SPECIFIC CASE FROM ONE OF OUR SOLUTION MANAGERS.