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The Ultimate Guide To
Employment in United Arab Emirates

Employing in United Arab Emirates: What You Need to Know

UAE employment law appears complex and confusing when looking from an outside view although in some ways there are many similarities to other countries. Both UAE nationals and foreign workers are subject to UAE employment law, with some exemptions for certain categories. For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in UAE.

Key Factors to Consider When Employing in United Arab Emirates

There are several key areas to be aware of within UAE’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the UAE laws and rules for both UAE employees as well as foreign nationals.

According to Article 3 of the Federal Law No. 8 of 1980 Regulating Labour Relations, the Law applies to all staff and employees working in the UAE, whether UAE nationals or expatriates. However, there are certain categories of individuals who are exempted from the Law as listed below:

1. Staff and workers employed by the federal government, government departments of the member emirates, the

2. Municipalities, public bodies, federal and local public institutions and those staff and workers employed in federal and local governmental projects.

3. Members of the armed forces, police and security units.

4. Domestic servants.

5. Agricultural workers and persons engaged in grazing (this exemption does not include persons who are employed in corporations which process agricultural products and/or those who are permanently engaged in the operation or repair of machines required for agriculture).

A partner in a business is not considered an employee and is therefore not required to obtain a labour card from the UAE. For immigration purposes therefore, a foreign partner will be sponsored by the entity he is a partner in, as an investor rather than as an employee and will deal with the immigration authorities directly rather than through the Labour Office, provided that his name is on the business entity’s license and subject to a minimum investment requirement in the entity. However, if the partner holds an employee position additional to his partner status, he will be considered as an employee for the work he is doing in the company.

On the other hand, employees working on a commission basis are considered as employees even if they are partners in the entity they are working for.

The official body covering employment law in the UAE appears to be the Ministry of Labour.

The following information should be considered as a broad and general guideline, and as always, legal advice is recommended should you require further help.

Using Shield GEO EOR Services: How We Can Help You

Companies entering UAE can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities. A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in UAE makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.

The company that is expanding into UAE contracts with the GEO to employ and payroll their staff on their behalf. The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll. This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.

A GEO EOR Solution vs DIY Employment in United Arab Emirates

Companies entering UAE must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or UAE Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a UAE entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated Branch Office or Company ready to run payroll and will include the cost of registered capital. The Shield GEO Solution is already properly incorporated in UAE, it has an active payroll and it is setup to sponsor work permits. This greatly reduces deployment times. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in UAE. Companies expanding into UAE can contract with Shield GEO to employ and payroll their staff on their behalf in UAE. Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Using Shield GEO Employer of Record Services in United Arab Emirates

Payroll

Payroll United Arab Emirates
Management Fee for Employer of Record Services / Monthly Payroll Costs

Contact us for a quote

Notes

There is no payroll tax or income tax in UAE. Employers and Employees Social Security only applies to local workers.

Currency ?

Emirate Dirham (AED)

Tax Amount
Grossed income Tax Rate (%)
0-∞ 0
Tax Returns Supplied

Not required

Corporate Tax Requirements

N/A

Employers Social Security and statutory contributions

0% for foreigners

12.5% pension contributions for local staff

Employees Social Security and statutory contributions

0% for foreigners

5% pension contributions for local staff

Insurance requirements

Private medical Insurance is recommended.

Can supply private health care

Can assist in securing private Health Insurance.

Can assist opening bank accounts

Yes

Work Permits

Work Permits
Can Sponsor Work Permit

Yes, Shield GEO is able to sponsor foreign workers on Work Visas which allow them to work in the UAE. As the employer of record, Shield GEO handles all of the formalities and employment requirements in the UAE. The client maintains responsibility for day to day employee management.

Work Permit cost

USD 3,500

Work Permit processing time

2-4 weeks dependent on nationality

Work Permit process

Shield GEO’s local entity initially makes an application for ‘quota approval’. Once approved our local UAE entity then applies for the Employment Entry Visa through the UAE immigration authorities in the UAE. Once the Employment Visa is approved the candidate can enter the UAE and on arrival our UAE entity will arrange for the compulsory Medical & Biometrics Tests. 24 hours later the Medical Results will be available and the Work Visa will be processed and stamped into the employees’ passport. At this point the employee is legally permitted to commence work in the UAE.

The Emirati ID card application is then lodged and generally takes 2-4 weeks to be issued.

Documentation required: attested Degree/Diploma/Professional Certificates, copy of the personal page of their passport and a passport photo.

Can Work Permit be processed in country

Depends on the nationality we would recommend the process is completed prior to arrival in the UAE.

Switch Business Visa to Work Permit?

No but some nationalities can switch from a Visa on arrival to a Work Permit without leaving the Emirates.

Can Spouse work on dependent visa?

No a Spouse would need to secure their own Work authorisation but if in the UAE on a Spousal Visa they can switch to a Work Permit without leaving the country

Business Visas

Business Visas
Can do Business Visa

Yes

Business Visa Cost

USD $450

Business Visa processing time

5-10 days Consulate Dependent

Payroll and Tax in United Arab Emirates

There are specific rules for payroll and taxation in the UAE, depending upon whether your company employs foreign nationals or locals. Generally speaking UAE has very little in the way of corporate tax concerns as there is no individual income tax for employees, no social security for expats, no payroll tax, no statutory pension contributions for expats and no withholding tax.

Your Payroll Options in United Arab Emirates

Information Explanation
Remote Payroll ?

A remote payroll in UAE is where a foreign company, i.e. a non-resident company, payrolls a resident employee in UAE.   One option for a non-resident company is to payroll its employees (local and foreign) in UAE is to use a fully outsourced service like a GEO, which will employ and payroll the staff on their behalf.

Local Payroll Administration ?

In some cases, a company will register their business in UAE under one of the forms available, (Representative Office, Branch Office or Limited Liability Company) but prefer to have another company administer its payroll.  This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. However, the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll ?

Larger companies with a commitment to UAE may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a UAE payroll, and can fulfill all tax, withholding, and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with UAE employment laws.

Fully Outsourced Payroll & Employment ?

Companies can outsource the employment and payroll of their staff in UAE to a GEO, like Shield GEO. This is possible for both foreign workers and UAE nationals. This is the easiest, fastest and safest way to payroll staff in UAE.

Shield GEO manages all aspects of payroll for workers in UAE, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Setting up payroll in United Arab Emirates

Information Explanation
National Currency ?

Emirate Dirham (AED)

Tax Figures

Information Explanation
Corporate Income Tax ?

There is no corporate income tax in UAE except for certain industries (branches of foriegn banks and companies engaged in Oil and Gas)

Income Tax Rate ?
Grossed income Tax Rate (%)
0-∞ 0
Payroll Tax ?

N/A

Sales Tax ?

N/A

Withholding Tax ?

N/A

United Arab Emirates Immigration and Work Permits

Foreign workers are required to have the proper visas and work permits in the UAE, as established by immigration laws. Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the UAE market. If you have yet to complete the incorporation process you can use an outsourced management company or GEO Employer of Record to sponsor the employee for the necessary permits.

Your Options

Have your own company?

A properly registered company can sponsor work permits for foreign nationals in the United Arab Emirates. Once the company has gone through the necessary steps to register and incorporate in UAE then it can apply to be a sponsor.

It is possible for companies registered in the Free Zones and mainland to sponsor, but a mainland company must have a local sponsor holding 51% of the company. This can be done though an agent, however that will cost approximately AED 50,000.

If the company is registered in a Free Zone it has a quota restriction on visas based on the size of their office space in the relevant Free Zone. Generally a company is allowed to sponsor 1 foreign staff member for each 12.5 square metres of office space that is leased. Given the premium that companies pay to rent office space in the Free Zones this is a significant consideration. Annual rents in the Free Zone are approx AED 1600-2600 per square metre which is roughly double mainland rental prices.

To register for sponsorship involves the following additional steps after the company is incorporated:

  • Show an office rental agreement
  • Apply for a Trade License. Note that the activities granted in the Trade License will influence which job titles and experience levels the Ministry allows the company to sponsor.
  • Register with Ministry of Labor. Note the company may be required to arrange a bank guarantee prior to applying for an employment entry visa.
  • Register with the Department of Residency and Naturalisation
  • In the mainland this will take approximately 3 months and cost around AED 20,000 (plus AED 50,000 to the local sponsor). In a Free Zone it will take 3-6 months and cost around AED 15,000 (plus the premium on office rental).

At this point the company will be entitled to sponsor employees, but will still need to follow the sponsorship steps outlined below per employee. Note that all forms are required in Arabic so it is recommended to use a local immigration specialist.

The steps required are as follows:

  • The employee and employer supplies their documentation.
  • Company makes an application to the Department of Labor for ‘quota approval’.
  • Company applies for the Employment Entry visa.
  • Employment Entry visa is approved and supplied to employee.
  • Employee travels to UAE.
  • Employee has compulsory Medical & Biometrics Tests.
  • Test results come in 24 hours and the Work Visa is processed and stamped into the employees’ passport.
  • Employee is legally permitted to commence work in the UAE.
  • The Emirati ID card application is lodged and generally takes 2-4 weeks to be issued.

Documentation required (Employer):

  • Office rental Agreement
  • Copy of Business registration certificate
  • Trade License
  • Immigration card
  • Letter of guarantee
  • 3 copies signed employment contract in Arabic

Documentation required (Employee):

  • Authenticated (notarised) Educational and Professional Certificates
  • Scanned copy of the personal page of the employees passport
  • Passport photo.
  • Authenticated (notarised) birth and marriage certificates for any dependents

 

Use the Shield GEO solution?

Shield GEO can process work permits in 2-4 weeks depending on the nationality of the employee.

Cost : USD 3,500 (approx AED 12,850)

The steps required are as follows:

  • Company engages with Shield GEO.
  • The employee supplies their documentation.
  • Shield GEO makes an application for ‘quota approval’.
  • Shield GEO applies for the Employment Entry visa.
  • Employment Entry visa is approved and employee travels to UAE.
  • The Entry visa is lodged at Dubai airport for the employee to pickup on arrival (72 hours notice required).
  • Shield GEO arranges compulsory Medical & Biometrics Tests.
  • Test results come in 24 hours and the Work Visa is processed and stamped into the employees’ passport.
  • Employee is legally permitted to commence work in the UAE.
  • The Emirati ID card application is then lodged and generally takes 2-4 weeks to be issued.

 

Documentation required (Employee):

  • Authenticated (notarised) Educational and Professional Certificates
  • Scanned copy of the personal page of the employees passport
  • Passport photo.
  • Authenticated (notarised) birth and marriage certificates for any dependents.

Types of visas in United Arab Emirates

Category Description of Visa
Employment Visa

This is the Emirati equivalent to a work permit. It can be obtained prior, or after entry to the UAE. All employment visas are issued by the Ministry of Labor. The employment permit must be acccompanied by a residence permit, however the employee has 60 days to obtain their residence permit after entering UAE.
There are restrictions on people over 65 and for certain nationalities.

Business Visa / Multiple Entry Visit Visa

The applicant will need to show a relationship with a reputable local company or demonstrate they are a frequent visitor to the UAE. The Visa costs AED 1000 and is valid for 6 months. Each stay is maximum 30 days in duration. The multiple entry visa is allocated in country after the applicant has entered on a normal visit visa.

Residence Permit

A residence permit is issued in two forms, either with or without employment. Residence permits are valid for up to 3 years. They can be cancelled if the holder is absent for more than 6 months.

Entry Service Permit

This visa can be sponsored by a UAE company and will allow the holder to enter the United Arab Emirates for up to 14 days. This visa is non-renewable and designed for urgent activities carried our by workers such as sales managers, auditors, managers, etc.

Tourist Visa (Visa on Arrival)

If your country of nationality appears on the list below, no advance visa arrangements are required to visit the UAE as a tourist. Simply disembark your flight at Dubai International Airport and proceed to Immigration, where your passport will be stamped with a 30-day visit visa free of charge. This can be extended for an additional 30 days at an additional charge (approx AED 500 at last report).
Andorra
Australia
Austria
Belgium
Brunei
Bulgaria
Canada
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hong Kong
Hungary
Iceland
Ireland
Italy
Japan
Latvia
Liechtenstein
Lithuania
Luxembourg
Malaysia
Malta
Monaco
Netherlands
New Zealand
Norway Poland
Portugal
Romania
San Marino
Singapore
Slovakia
Slovenia
South Korea
Spain
Sweden
Switzerland
United Kingdom
United States of America
Vatican City

Setting up a company in United Arab Emirates

When setting up a company you may want to consider these factors:

  1. Business factors

    • The industry and type of business
    • Nationality of the headquarters/individual(s) and
    • Presence of existing trade agreements or relationships
  2. Location

    Location will be another factor, since the UAE has different requirements depending on where the company is incorporated. Incorporating on the mainland requires a local sponsor to own 51% of the company on paper. This can be done through an agent or local sponsor service but is expensive (approx AED 50,000)

    The Free zone has reduced requirements on foreign ownership but has some limitations such as; the company must take offices within that Free zone; the company may only conduct business within the Free zone; it must have an appropriate level of minimum capital and it may only perform the activities on its trade license.

  3. Regional language

    Arabic is the national language of the United Arab Emirates. The Gulf dialect of Arabic is spoken natively by the Emirati people. As a British colony until 1971 and a hub for commerce, English is the primary lingua franca (trade language) in the UAE. As such, knowledge of English is a requirement when applying for most local jobs. Other widely used languages are Persian, Nepali, Bengali, Hindi-Urdu, Balochi, Pashto, Tagalog and Malayalam. Additionally, most world languages are represented by a mainly expatriate population drawn from a wide mix of nationalities.

  4. Types of visa in United Arab Emirates

    There are different types of work visas for the UAE, depending on the duration of the employment contract. In order to obtain a work permit for Dubai, expats need a residency visa, which allows them to remain in the emirate for up to three years.

Your Options

This article provides a general guideline on entering UAE for business purposes. In particular it looks at setting up a foreign company.

The late Sheikh Zayed, ruler of Abu Dhabi and the first President of the UAE, oversaw the development of the Emirates and steered oil revenues into healthcare, education and infrastructure. The UAE’s economy is the most diversified in the Gulf Cooperation Council, with its most populous city, Dubai in particular developing into a global hub for tourism, retail, and finance.

Nevertheless, the UAE’s oil reserves are the seventh-largest in the world, while its natural gas reserves are the world’s seventeenth-largest, and the country remains extremely reliant on petroleum and natural gas; more than 85% of the economy was based on the oil exports in 2009,while oil exports accounted for 77% of the state budget in 2011.

Limited Liability Company = LLC

PLC

This entity is defined as an association with a maximum of 50 partners and a minimum of two. Each partner’s liability is limited to the extent of its share participation in the capital of the company.

LLCs are no longer required to meet the minimum capital requirements of AED 300,000 (in Dubai) or AED 150,000 (in Abu Dhabi and the other Emirates). Instead, a new test of “sufficient capital” is judged by the Department of Economic Development of the relevant Emirate (including consideration of the size and planned activities of the company).  Foreign companies wishing to establish an LLC in the UAE should seek guidance on the current practice of the relevant Emirate regarding minimum share capital.

Registration Process for Limited Liability Company

Reserve a company name and Apply for registration at the Department of Economic Development (DED)

A name availability check, reservation, and payment can be done online at the website of DED.

To submit a registration application, the entrepreneur must first obtain preliminary approvals from the Licensing Section of the Dubai Department of Economic Development (DED) on its business activities, trade name, and identity of partners.

Agency: Department of Economic Development

Cost: AED 110 for initial approval + AED 210 for name reservation

Time: 1 day

Notarize the company’s Memorandum of Association at Department of Economic Development

The applicant notarizes the standard Memorandum of Association (MOA) at the Department of Economic Development (DED). Notarization takes no more than 1 day. A common practice is for the entrepreneur’s lawyer to obtain a preliminary approval from the notary beforehand, so that the client can arrive at a specified time and have the documents notarized immediately.            

Agency: Notary

Time: 1 day

Cost: Maximum notary fee is AED 10,000, plus 0.25% of the capital (for 3 copies of the Memorandum of Association), and AED 5 per each additional copy.

File company documents with the Department for Economic Development (DED); Obtain trade license and Register for membership at the Dubai Chamber of Commerce and Industry (DCCI)

To obtain the Trade License and Commercial Registration Certificate, the LLC must submit the following original documents to the Commercial Registry at the DED Trade License and Commercial Registration Department. These documents can also be submitted online due to the ongoing efforts by DED to render electronic registration available and convenient.

  • The prescribed application form, signed by the company manager(s) or their legal representative(s).
  • The memorandum of association (an original and a copy).
  • A letter issued by the DED, attesting to the company name approval.
  • The original letter of company approval, issued by the DED Committee of Limited Liability Companies.
  • Passport copy of each partner.

If Commercial Registry officials deem the documentation to be in order, the company name will be entered into the Commercial Register. The DED then forwards the following documents to the Federal Ministry of Economy to arrange for publication:

  • Notarized memorandum of association (copy).
  • The application for entry of the company name in the Commercial Register (copy).
  • Extract of the entry of the company name in the Commercial Register.

Publication takes several months, however, this time frame is not important because the authorities will accept a copy of the Ministry’s receipt of publication fee payment. After the publication, the Ministry of Economy issues its approval letter.

Before the newly formed company can begin operations, it must apply to the DED for a trade license. After the notary public at the Commercial Registry notarizes the memorandum of association, a license application form is completed in Arabic, signed by the authorized company signatory and filed with the DED in duplicate. The DED files one copy and forwards the other to the UAE Federal Ministry of Economy.

The trade license application must be filed with the applicable fee and the following documents:

  • The prescribed form for setting out the proposed company name in Arabic and English.
  • The original lease for the company’s office premises.
  • The prescribed form for obtaining the Dubai Municipality Building Department’s clearance on the suitability of the office premises.

All business activities fall into three categories of licenses:

(1) Commercial licenses, covering all kinds of trading activity;

(2) Professional licenses, covering professions, services, craftsmen, and artisans; and

(3) Industrial licenses, establishing industrial or manufacturing activity.

Upon the conclusion of this procedure, the DED issues the original Trade License and Commercial Registration certificates. Upon presentation of the receipts showing payment of the Ministry publication fee and the Chamber of Commerce membership fee, the DED will issue the original trade license and certificate of commercial registration for the limited liability company and the DCCI membership.

Alternatively, the online license application is available whereby the applicant submits the filled-in form, completes online payment and instantly receives the license certificate that can then be printed out.

Recently, DED has launched electronic memorandum of association and “120-day” hassle-free trade license initiatives. These reforms aim towards the transition towards online registration, making it easier to start a business.

Agency: Department for Economic Development

Time: 3 days

Cost: 5% of the value of the lease agreement + AED 1,000-3,000 waste fees + AED 480 for company registration + AED 350 fees for name board + AED 1,200 for Chamber of Commerce membership registration (total: the 5% plus AED 3,030-5,030

Open Bank Accounts

If a person owns or is a part of a company that is registered in Dubai then he can open a corporate bank account for it. Research indicates that setting up banking in the UAE has generally become easier over time.

There are certain conditions that you need to fulfill to be able to hold a bank account. For example, in Dubai the two most important ones are that the person should be able to provide the necessary documentation proof of their identity, the nature of their business and the kind of transactions that they wish to make with this bank account. These requirements vary for different UAE banking authorities.

Agency: Commercial Bank

Time: 1 day

Cost: N/A

Apply for the establishment card at the Ministry of Labor

Either the entrepreneur or the authorized representative of the company should go in person to apply for the “Establishment Card” at the Ministry of Labor. Provided the trade license is obtained and the fees are paid, the “Establishment Card” can be issued the same day.

Agency: Ministry of Labor

Time: 1 day

Cost: AED 2,000

Register native workers with the Ministry of Labor

According to Ministerial decree No 1215/2005, native workers must be registered with the Ministry of Labor.

The following documents are required for submission during this registration:

  • 3 copies of the employment contract
  • A copy of employer’s passport
  • A copy of the trading license
  • A proof that the worker is a UAE citizen

Agency: Ministry of Labor

Time: 1 day

Cost: no charge

Register native workers with the General Authority for Pension and Social Security

Registration requires the submission of the native workers’ updated salary certificates or labor contracts.

Agency: General Authority for Pension and Social Security

Time: 1 day (simultaneous with previous procedure)

Cost: no charge

Branch Office

The activities a branch office can perform depend upon the license issued by the respective authority (e.g the Dubai Department for Economic Development). As a rule, only activities which are at least similar to those of the parent company are approved. However, a branch office must not perform import, export and manufacturing activities. Therefore, in practice, the activities of a branch are generally limited to services and consultancy work. However, a branch office may perform import activities subject to the condition that the branch only imports goods that are manufactured by the mother company abroad.

Registration Process for Branch Office

Identify local services agent

One of the key features of a branch office and a representative office is that both are required to appoint a local services agent (LSA). The LSA must be either a UAE national or a company wholly owned by UAE nationals.

The LSA is not responsible for the branch or representative office, nor does it take part in any operations, management or ownership of the office. Technically, the role of the LSA is restricted to administrative functions such as the obtaining of licenses, permits, visas etc, in return for a fee.

The appointment of the LSA is effected through a written agreement, which must be signed by the parties before a notary public in the relevant Emirate. There is no prescribed form of agreement and it will therefore be a matter for negotiation.

Agency: Local Service Agent (LSA)

Time: depends on the LSA

Cost: depends on Negotiation

Trade Name Reservation and Initial Approval

An application must first be made to the relevant Emirate’s Department of Economic Development for a trade name reservation and initial approval of the proposed branch or representative office registration.

Agency: Department of Economic Development

Time: 1 day

Cost: AED 110 for initial approval + AED 210 for name reservation

Apply to the Ministry of Economy

Following initial approval pursuant to step b., an application must be made to the Ministry of Economy (MOE) (The UAE Commercial Companies Law, article 314).

The application form requires full details of the foreign company (including share capital, head office, overseas activities, home jurisdiction); the nature of the proposed activities (these must be consistent with activities in the home jurisdiction); and the name of the proposed general manager in the UAE. The form must be accompanied by the prescribed documents, which will include:

  • Trade name reservation certificate and initial approval
  • Corporate documents including a certificate of incorporation (or equivalent), memorandum and articles of association, a certificate of good standing (where one can be obtained in the home jurisdiction)
  • A board resolution authorizing the opening of the branch or representative office, appointing the general manager and resolving to grant a power of attorney in the general manager’s favor; and confirming that the company accepts responsibility for the liabilities of the office once established in the UAE
  • A power of attorney in favor of the general manager (authorized by the board resolution) and a copy of the general manager’s passport
  • Audited accounts of the parent for the last two years
  • A statement setting out the company’s main operations and activities – supporting its intended activities in the UAE
  • The notarized agreement with the LSA, and a copy of the LSA’s identification documents (or corporate documents if it is a corporate entity).

The MOE will then issue their own initial approval, at which point the following additional documents must be submitted in hard copy to the MOE:

  • Application form
  • Certificate of incorporation of the parent company
  • Initial approval of the MOE
  • Local bank deposit certificate.

The MOE will then approve the establishment of the branch or representative office. Business cannot commence, however, until the following further steps have been completed.

Agency: Ministry of Economy

Time: 60 minutes  (online)

Cost: AED 20,202 approx

Obtain License from the Department of Economic Development

The MOE will issue a formal approval to either the Abu Dhabi Department of Economic Development or the Dubai Department of Economic Development, as appropriate (collectively referred to as the DED here).

Once the DED has received this approval, the applicant will then need to make a further application to the DED. This requires similar items to those submitted to the MOE; in addition, the applicant will need to include the proposed office address in the UAE.

This application needs to be accompanied by:

  • The MOE approval obtained under step 3, together with approvals received from any other authorities applicable to the industry
  • A copy of the proposed lease in the UAE
  • Copies of certain of the documents submitted to the MOE under step 3
  • Undertaking from the foreign parent company
  • A letter from a UAE auditor confirming that it acts, together with a statement by the same auditor summarizing the financial statements of the company for the two years preceding the year in which the application was submitted.

The DED will then issue a commercial license to the branch or representative office, usually valid for one year and renewable annually.

Agency: Department of Economic Development

Time: 60 minutes (online)

Cost: AED 55,097 approx

Bank Accounts

A person who owns or is a part of an onshore or offshore company that is registered in the UAE then generally he can open a corporate bank account for it.

There are certain conditions that you need to fulfill to be able to hold a bank account. For example, in Dubai, the two most important ones are that the person should be able to provide the necessary documentation proof of their identity, the nature of their business and the kind of transactions that they wish to make with this bank account. These requirements vary for different UAE banking authorities. One should choose the bank that best meets your needs and offers the most convenient banking solutions for all kinds of issues

Agency: Commercial Bank

Time: 1 day

Cost: N/A

Become a member of the Chamber of Commerce and Industry

The final step is for the branch or representative office to register as a member with the Abu Dhabi Chamber of Commerce and Industry or the Dubai Chamber of Commerce and Industry, as appropriate. The procedure is largely the same. It will be necessary to complete an application, and provide copies of the commercial license and office lease agreement along with passport copies of the authorized signatories of the branch or representative office.

Agency: Chamber of Commerce and Industry

Time: 3 days also depending on the chamber where the office is based

Cost: AED 1,200 for Chamber of Commerce membership registration fee’s could be different depending on the Emirate the Branch, or Representative Office in based in.

Apply for the establishment card at the Ministry of Labor

Either the entrepreneur or the authorized representative of the company should go in person to apply for the “Establishment Card” at the Ministry of Labor. Provided the trade license is obtained and the fees are paid, the “Establishment Card” can be issued the same day.

Agency: Ministry of Labor

Time: 1 day

Cost: AED 2,000

Register native workers with the Ministry of Labor

According to Ministerial decree No 1215/2005, native workers must be registered with the Ministry of Labor.

The following documents are required for submission during this registration:

  • 3 copies of the employment contract
  • A copy of employer’s passport
  • A copy of the trading license
  • A proof that the worker is a UAE citizen

Agency: Ministry of Labor

Time: 1 day

Cost: no charge

Register native workers with the General Authority for Pension and Social Security

Registration requires the submission of the native workers’ updated salary certificates or labor contracts.

Agency: General Authority for Pension and Social Security

Time: 1 day (simultaneous with previous procedure)

Cost: no charge

Representative Office

By setting up a representative office, the parent company creates its own legal and physical presence in the market. Nonetheless the task of a representative office is restricted to mainly providing support to the parent company. It may perform the following duties:

  • Observing the market
  • Preparation of project studies
  • Marketing and promotion for the products and services of the parent company
  • Negotiation of contracts between local customers and the parent company
  • Customer advice
  • Services
  • Supervision of commercial agents
  • Training activities
  • Observation of public sector invitations to tender

Representative offices must not perform any commercial activities, import or export goods, or sign contracts on their own behalf or set up their own accounts.

Registration Process for Representative Office

Identify local services agent

One of the key features of a branch office and a representative office is that both are required to appoint a local services agent (LSA). The LSA must be either a UAE national or a company wholly owned by UAE nationals.

The LSA is not responsible for the branch or representative office, nor does it take part in any operations, management or ownership of the office. Technically, the role of the LSA is restricted to administrative functions such as the obtaining of licenses, permits, visas etc, in return for a fee.

The appointment of the LSA is effected through a written agreement, which must be signed by the parties before a notary public in the relevant Emirate. There is no prescribed form of agreement and it will therefore be a matter for negotiation.

Agency: Local Service Agent (LSA)

Time: depends on the LSA

Cost: depends on Negotiation

Trade Name Reservation and Initial Approval

An application must first be made to the relevant Emirate’s Department of Economic Development for a trade name reservation and initial approval of the proposed branch or representative office registration.

Agency: Department of Economic Development

Time: 1 day

Cost: AED 110 for initial approval + AED 210 for name reservation

Apply to the Ministry of Economy

Following initial approval pursuant to step b., an application must be made to the Ministry of Economy (MOE) (The UAE Commercial Companies Law, article 314).

The application form requires full details of the foreign company (including share capital, head office, overseas activities, home jurisdiction); the nature of the proposed activities (these must be consistent with activities in the home jurisdiction); and the name of the proposed general manager in the UAE. The form must be accompanied by the prescribed documents, which will include:

  • Trade name reservation certificate and initial approval
  • Corporate documents including a certificate of incorporation (or equivalent), memorandum and articles of association, a certificate of good standing (where one can be obtained in the home jurisdiction)
  • A board resolution authorizing the opening of the branch or representative office, appointing the general manager and resolving to grant a power of attorney in the general manager’s favor; and confirming that the company accepts responsibility for the liabilities of the office once established in the UAE
  • A power of attorney in favor of the general manager (authorized by the board resolution) and a copy of the general manager’s passport
  • Audited accounts of the parent for the last two years
  • A statement setting out the company’s main operations and activities – supporting its intended activities in the UAE
  • The notarized agreement with the LSA, and a copy of the LSA’s identification documents (or corporate documents if it is a corporate entity).

The MOE will then issue their own initial approval, at which point the following additional documents must be submitted in hard copy to the MOE:

  • Application form
  • Certificate of incorporation of the parent company
  • Initial approval of the MOE
  • Local bank deposit certificate.

The MOE will then approve the establishment of the branch or representative office. Business cannot commence, however, until the following further steps have been completed.

Agency: Ministry of Economy

Time: 60 minutes  (online)

Cost: AED 20,202 approx

Obtain License from the Department of Economic Development

The MOE will issue a formal approval to either the Abu Dhabi Department of Economic Development or the Dubai Department of Economic Development, as appropriate (collectively referred to as the DED here).

Once the DED has received this approval, the applicant will then need to make a further application to the DED. This requires similar items to those submitted to the MOE; in addition, the applicant will need to include the proposed office address in the UAE.

This application needs to be accompanied by:

  • The MOE approval obtained under step 3, together with approvals received from any other authorities applicable to the industry
  • A copy of the proposed lease in the UAE
  • Copies of certain of the documents submitted to the MOE under step 3
  • Undertaking from the foreign parent company
  • A letter from a UAE auditor confirming that it acts, together with a statement by the same auditor summarizing the financial statements of the company for the two years preceding the year in which the application was submitted.

The DED will then issue a commercial license to the branch or representative office, usually valid for one year and renewable annually.

Agency: Department of Economic Development

Time: 60 minutes (online)

Cost: AED 55,097 approx

Bank Accounts

A person who owns or is a part of an onshore or offshore company that is registered in the UAE then generally he can open a corporate bank account for it.

There are certain conditions that you need to fulfill to be able to hold a bank account. For example, in Dubai, the two most important ones are that the person should be able to provide the necessary documentation proof of their identity, the nature of their business and the kind of transactions that they wish to make with this bank account. These requirements vary for different UAE banking authorities. One should choose the bank that best meets your needs and offers the most convenient banking solutions for all kinds of issues

Agency: Commercial Bank

Time: 1 day

Cost: N/A

Become a member of the Chamber of Commerce and Industry

The final step is for the branch or representative office to register as a member with the Abu Dhabi Chamber of Commerce and Industry or the Dubai Chamber of Commerce and Industry, as appropriate. The procedure is largely the same. It will be necessary to complete an application, and provide copies of the commercial license and office lease agreement along with passport copies of the authorized signatories of the branch or representative office.

Agency: Chamber of Commerce and Industry

Time: 3 days also depending on the chamber where the office is based

Cost: AED 1,200 for Chamber of Commerce membership registration fee’s could be different depending on the Emirate the Branch, or Representative Office in based in.

Apply for the establishment card at the Ministry of Labor

Either the entrepreneur or the authorized representative of the company should go in person to apply for the “Establishment Card” at the Ministry of Labor. Provided the trade license is obtained and the fees are paid, the “Establishment Card” can be issued the same day.

Agency: Ministry of Labor

Time: 1 day

Cost: AED 2,000

Register native workers with the Ministry of Labor

According to Ministerial decree No 1215/2005, native workers must be registered with the Ministry of Labor.

The following documents are required for submission during this registration:

  • 3 copies of the employment contract
  • A copy of employer’s passport
  • A copy of the trading license
  • A proof that the worker is a UAE citizen

Agency: Ministry of Labor

Time: 1 day

Cost: no charge

Register native workers with the General Authority for Pension and Social Security

Registration requires the submission of the native workers’ updated salary certificates or labor contracts.

Agency: General Authority for Pension and Social Security

Time: 1 day (simultaneous with previous procedure)

Cost: no charge

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in UAE, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in UAE they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where

  • the company is looking to setup an office quickly
  • the company wants to work within a defined budget
  • the company wants to limit its initial commitment in UAE
  • the company needs help with tax, employment, immigration and payroll compliance in UAE

The complexity of employment regulations in UAE makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in UAE allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in UAE.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into UAE. Read more about outsourced employment through Shield GEO.

APPENDIX

UAE Business Terms

*Note Arabic is written from right-to-left

English Arabic
Articles of Incorporation التأسيس
Bank مصرف
United Arab Emirates الأمارات العربية المتحدة
Commercial Bank البنك توازي
Dubai دبي
stockholder; shareholder المساهمين . المساهم
Tax ضريبة
Wages; pay; earnings; salary الأجور؛ الدفع؛ أرباح . راتب
register تسجيل
revenue دخل
organization منظمة
Memorandum of Association مذكرة الرابطة
local services agent وكيل خدمات محلي
   
Departments  
Ministry of labor وزارة العمل
Department of Economic Development دائرة التنمية الاقتصادية
Department for Economic Development دائرة التنمية الاقتصادية
Commercial Register السجل التجاري
Federal Ministry of Economy الوزارة الاتحادية لل اقتصاد
Ministry of Economy وزارة الاقتصاد
Chamber of Commerce الغرفة التجارية
  • Tax Compliance : What is FATCA and who is affected?

Tax Compliance : What is FATCA and who is affected?

  • Tax Compliance : What is FATCA and who is affected?

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