13th August 2019
The UAE, a land of skyscrapers, white beaches and palm shaped islands, is a famously attractive location for overseas contractors. In fact, in 2018’s HSBC expat explorer survey, the country was ranked as the fourth best place to work in the world, and was particularly renowned for its financial incentives, with 95% of expats receiving benefits as part of their employment package. Furthermore, almost 73% said their earnings prospects were better than in their home country.
Additionally, with the UAE expected to experience a skilled labour gap worth $50 billion by 2030, according to Korn Ferry Middle East, demand for talent certainly looks set to continue on an upward trajectory. With recent news emerging showing the country is putting even more effort into attracting international workers, with a new family sponsorship law for expats, it’s important recruiters are aware of how the latest developments in the country are affecting overseas contracting in the UAE.
Overseas contracting in the UAE – new laws
The new regulations will allow expats in the UAE, including overseas contractors, to sponsor their family members based on income rather than profession. The Federal Authority for Identity and Citizenship announced that expats, both men and women, can sponsor their family members if they earn a monthly salary of Dhs 4,000 or Dhs 3,000 plus accommodation provided by the employer.
Previously, a man had to earn a monthly salary of at least Dhs 4,000 or Dhs 3,000 plus accommodation to sponsor his family, while a woman had to make a minimum of Dhs 10,000 per month to bring her family to the country. Any wife wishing to sponsor their children must attach a certified written agreement from her husband. Widowed and divorced women can also sponsor their children, but they must provide a recently issued divorce or death certificate to prove custody.
There are certain additional criteria which will apply, and potential beneficiaries must provide proof of appropriate housing and health insurance for their families, as well as their registration in the national population database. They must also apply for IDs for every family member and present a marriage certificate and their children’s birth certificates translated into Arabic, along with proof of their monthly income.
The legal bit
When we look at the legalities of overseas contracting in the UAE, there are a few things for recruiters to be aware of.
Contractors will need a visa, but there are different options available. A visit visa can be obtained in order to travel to the UAE for one or three months in order to attend meetings or conferences. This isn’t, however, a work permit. If any contractors hold a visit visa and are found to be working in the nation, they could be arrested, detained, fined or even deported. If a worker is in possession of a sponsored visa, the company involved could also face extensive fines.
In order for overseas contractors to work in the UAE, they will need a work and resident permit as well as a relevant sponsor. These can be tricky to obtain and have a short shelf-life, expiring after 60 days. Permits can also have very specific requirements, such as the need to undertake a medical examination or even fly to a specific airport in order to complete immigration checks.
There are also numerous cultural considerations to be aware of. For instance, the laws surrounding alcohol and public intoxication. Drinking is only permitted in licensed locations and drunk public behaviour can result in punishment, including possible jail time. It’s also important to ensure that your contractors are considerate of religious activity. The month of Ramadan, for example, will see changes to professional and personal behaviours.
Recruiters need to be aware
While the UAE’s changes have made it an even more attractive location for overseas contracting, any firms looking to take advantage of this uptick in demand will need to bear in mind that tax across the globe is getting increasingly complex, and agencies are not exempt from risk. With the introduction of the Criminal Finances Act 2017, any recruitment agency could be held fully liable for the non-compliant actions of a contactor.
Therefore, in order to avoid any potential negative consequences, it is advisable to employ the services of an expert contractor management service that knows how to operate in the uncertain landscape of global tax and compliance. Contact us today: