How will the UAE residency scheme affect recruitment agencies?

UAE residency scheme recruitment

5th December 2019

As one of the richest countries in the world, the UAE is a contracting hotspot. In fact, in last year’s HSBC Expat Explorer survey, the country was ranked as the fourth best place to work in the world, and was praised for its financial incentives, with 95% of expats receiving benefits as part of their employment package.

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 looks set to continue to grow. As a result of this, the country is trying to bring in as much overseas resources as possible, launching a permanent residency scheme for expatriates in May 2019. Currently, 2,500 of those offered residency have accepted.

With rising numbers of contractors flocking to the destination, any recruiters placing workers in the Gulf state will need to be aware of the tax and compliance situation in the country. Here’s what recruitment agencies need to know about the UAE residency scheme.

UAE residency scheme: a high-quality recruitment drive?

The UAE residency scheme, referred to as a Gold card visa, has been offered to over 6,800 individuals, with 2,500 foreign nationals currently taking up the offer, as revealed by Sheikh Mohammed bin Rashid Al Maktoum last month.

The scheme is something of a high-quality recruitment drive, with individuals making up this list including skilled workers, such as scientists, researchers and investors. “We celebrate the first batch of scientists, researchers and doctors who were granted permanent residence in the UAE. We welcome them.” Sheikh Mohammed said on Twitter.

The UAE initially launched the residency scheme in May. The initial recipients include expats who have made overall investments of over £21 million in the destination. Indian businessman M.A Yussufali, the chairman and director of Lulu Group, became the first expat in the UAE to receive gold card residency in June.

Gold card holders are granted a 10-year residency visa covering them and their families without the need for a sponsor, which can automatically be renewed provided all the conditions are met. They can freely move in and out of the country and can obtain residence for a senior employee, advisor or manager.

The legal bit

However, while the UAE residency scheme may influence recruitment agencies to place contractors in the gulf state, it’s important that you are aware of the tax situation. When we look at the legalities of contracting in the UAE, there are a few things to be aware of:

Contractors will need a visa, with different options available: A visit visa can be obtained to travel to the UAE for one to three months to attend meetings or conferences. However, this isn’t 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.

Contractors will also need a 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. Drinking is only permitted in licensed locations and drunk public behaviour can result in punishment, including jail time. It’s also important to ensure your contractors are considerate of religious activity. The month of Ramadan, for example, will see changes to professional and personal behaviours.

Recruitment agencies need to be aware

While the UAE residency scheme has made the country an even more attractive location for contractors, recruitment firms will need to bear in mind that tax across the globe is getting increasingly complex. With the introduction of the Criminal Finances Act 2017, any recruitment agency could be held fully liable for the actions of a contractor. In order to avoid any potential negative consequences, it is advisable to employ the services of an expert contractor management service.

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