Why Starting a Business in the UAE Makes Good Sense
The United Arab Emirates (UAE) has come a long way since its founding back in 1971. The UAE has been very intentional about building up its physical and technical infrastructure and has welcomed the inclusion of diverse cultures on its path towards development and growth. The Middle Eastern market has become increasingly attractive to foreign investors, and no location draws more businesses than Dubai and the rest of the UAE.
The list of reasons to start and maintain a business in the UAE is extensive. While there are some rules and guidelines that foreign-based business leaders must follow if they wish to operate in the UAE, it’s still much easier to get a business up and running here than in many other comparable locations.
Looking for some tips when it comes to launching and staffing your business venture, especially when it comes to employee visas for Dubai and the types of visas needed for the UAE? You’ve landed on the right page, and your friends at MSZ Consultancy are here to help!
How Cross-Border Employment Works in the UAE
Let’s say a foreign entity chooses to launch a new business in the UAE. This foreign entity (or overseas entity) will need to set up a corporate presence (or local entity) in the UAE. The local entity can choose to incorporate in the UAE Mainland proper, or may also elect to establish itself in one of the UAE Free Zones. But in either case, the foreign or overseas entity may wish to send some of its existing employees to work within the UAE in order to help support its new business venture.
The process of relocating employees from overseas to the UAE must be handled properly and carefully. Failure to follow the established guidelines set out under UAE Federal Law No. 8 of 1980 (known locally as the UAE Labor Law) can have several negative ramifications for the business and its leadership.
Things to Consider When It Comes to Cross-Border Employment in the UAE
The UAE has set forth some important rules and guidelines to follow in terms of employing foreign workers and types of visas for UAE employment and residency:
1. The Employment Contract
You must draft and have all parties sign an employment contract which clearly defines the legal relationship between the employee, the overseas entity, and the local entity established in the UAE. Failure to do so can result in fines, court injunctions, or worse.
2. Continuity of Employment Clarification
Another issue which must be spelled out is for whom the relocated employee now works – the overseas entity, or the local UAE entity? The overseas entity can either opt to continue its relationship with the employee, or can terminate the existing relationship and begin a new official relationship between the employee and the local UAE entity.
3. Remuneration – How Will Salaries Be Paid?
When it comes to cross-border employment in the UAE, some overseas entity employers prefer to keep the current salary payment arrangements with the employee as-is. But this isn’t always possible, as UAE employers may need to comply with Ministerial Resolution No. 788 of 2009 and pay salaries through the UAE Wages Protection System. This may require employees to deposit employee salaries into a UAE bank account in UAE currency.
4. End of Service Gratuity and Pension Stipulations
The UAE generally requires local entities to pay an end-of-service gratuity (or EOSG) to the employee at the end of employment. But if the overseas entity has offered the employee to participate in pension contributions, the UAE Labor Law does allow for local entities to opt-out from the EOSG. In many cases, the employee will benefit more from a pension than from an EOSG payment.
5. Termination of Employment Stipulations
Depending upon how employment termination is handled, an employee may be able to bring claims against both the overseas entity and the local entity regarding arbitrary dismissal and EOSG issues. UAE courts may have jurisdiction to apply UAE Labor Law to an employee and the entities in question. The employee may also be able to bring a claim in a foreign jurisdiction, as well.
6. UAE Resident Visas and Recent Updates
Any local entity will be required to comply with UAE regulations and obtain valid resident visas and work permits for relocated employees. Failure to do so can result in significant fines or even imprisonment. On a positive note, the UAE announced in 2021 that it was introducing a new residence permit for remote workers. Essentially, this enables employees from all over the world to live and work remotely from the UAE, even if their companies are based in other countries. This is just one more positive step the UAE has taken to attract even more businesses and foreign residents.
The Many Benefits of Living and Working in Dubai
There are lots of reasons why a company would want to do business in Dubai; Dubai has emerged as one of the top international business and economic centers in the world. In fact, over 80% of Dubai’s current population is comprised of people who aren’t UAE nationals! There are many good reasons for a foreign national to consider relocating and working in Dubai, too:
1. Business and entrepreneurship opportunities
Let’s start with the obvious. If you’re looking for good opportunities to work and make money, Dubai plays host to a wide range of thriving, growing industries. And in addition to working for a local company, you could also decide to set out on your own as an entrepreneur. If you can dream it, you can probably make it happen in Dubai!
2. Welcoming culture, few language barriers
Dubai has become a great blend of East and West. The cuisine is global, the shopping is amazing, and the nightlife is incredible. While it’s true that Arabic is the official language, nearly everyone speaks English as well. And with so many foreign nationals here, you’re likely to hear someone speaking in your native tongue as well.
3. Highly-regarded education and healthcare system
Families like living in the UAE for many reasons, one being the fact that the UAE education system ranks 16th in the world. The healthcare system is world-renowned as well, so you’ll have no problem getting the medical attention you need.
4. A safe place to live
The UAE is recognized as one of the safest countries in which to live. In a recent 2021 Gallup poll, the UAE came in as the second safest country in the world, ranking only behind Norway. The UAE has also been rated as the safest country in which to walk at night. In addition, the UAE also happens to be the most politically-stable Arab nation.
5. Pleasant climate
If you like plenty of warm sunshine and coastal air, then you’re going to like Dubai. Winter evening temperatures rarely drop much below 70°F, so you’ll never need anything more than a light jacket. And thanks to the sunny climate, renewable energy has a become big business in the UAE too. In fact, the UAE is expected to generate 20% of its energy from clean sources within the next three years.
6. The Dubai relocation process is easier than you think!
It’s easier to relocate and start a business in Dubai than you may realize. There are of course certain rules and guidelines to follow, but having a “friend on the inside” can help make things go much more smoothly. That’s where MSZ Consultancy is happy to come alongside! We’re located right here in Dubai, and we’re experts in local business setup, employee relocation, and business services.
MSZ Consultancy Has You Covered!
If you’re a foreign national who’s interested in relocating to the UAE for business, or are interested in starting your own business in Dubai, MSZ Consultancy can help! We’re a locally-based business consultancy headquartered in Dubai, and we can help you to navigate the entire UAE relocation and business foundation process. Got questions about types of visas for the UAE, working visas for Dubai, employee visas for Dubai, or other related issues? We’re Dubai working visa agents, and we provide a full suite of other valuable business services, too!
Why wait? Reach out to us today, and let’s get your FREE consultation scheduled. You can get the conversation started by shooting us an email at info@mszconsultancy.com, or you can just call us directly at +971 52 544 1248.
MSZ Consultancy can help make your UAE business dreams, and relocation plans a reality!
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