Umbrella Company in U.A.E
Independent contracting in the UAE isn’t always straightforward. You’ve got immigration issues, tax difficulties, and mountains of complex admin work. Even worse, missteps can cost you serious money, or even land you in legal trouble.
Before you consider taking a contract in the UAE, you should be aware of what you’re getting into – and how you can make it simpler.
Difficulties of Contracting in U.A.E
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for the UAE.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in the UAE, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in the UAE and your home country can seem like full-time work in itself.
How Umbrella Companies Work
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in the UAE. Even better, most are experts in UAE and expat tax law, meaning they’ll also help you optimise your earnings in the UAE.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Why Use an Umbrella Company in U.A.E
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in the UAE (which means avoiding fees, fines, or even worse penalties).
How We Can Help You
There’s a huge variety of Umbrella Companies with different specialities and advantages in the UAE. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout the UAE and match contractors with the right company for them. If you’ve already secured a contract in the UAE, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
A Contractor's Guide to Taxes in U.A.E
One of the most consistently challenging aspects of contracting in the UAE is complying with the country’s tax system. As well as paying tax in the UAE, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in U.A.E
Currently, there are no taxes on income in the UAE. However, laws are constantly changing. You will need to find someone who can keep you updated and informed!
Tax Figures in U.A.E
|Currency||United Arab Emirates Dirham (AED)|
There are currently no taxes on income in the UAE.
Tax Residency in U.A.E
When do you become a tax resident in U.A.E
There is no residency for tax purposes in the UAE. However, the Ministry of Finance issues certificates to individuals who have been physically present in the UAE for at least 183 days within any 12-month period.
Does the 183 day rule apply in U.A.E
Am I taxed on my global income in U.A.E
Can you set up your own Limited Company in U.A.E
|How long does it take to set up||8-9 days|
|How much does it cost||AED6,270 + notary fees of 0.25% of the capital (capped at AED10,000) + 5% of the value of the lease agreement|
|Is it easy?||Starting a business in the UAE has its administrative challenges. The UAE has a ‘Starting a Business Rank’ of 51 out of 190 countries (Source: World Bank).|
Tax Calculator in U.A.E
If you are a contractor and want a calculation on your tax and net retention in the UAE, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in U.A.E
Contractors in the UAE are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A UAE umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in UAE taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the UAE tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in U.A.E
We work with numerous umbrella companies in the UAE, many of whom are experts in tax and immigration laws. If you have any questions about tax in the UAE, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their UAE work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in the UAE but without the overhead of directly dealing with the UAE tax authorities. Get in touch with us today for some reliable advice on tax in the UAE!
A Contractor's Guide to Work Permits in U.A.E
Immigration is one of the primary concerns for any contractor hoping to start working in the UAE. Permanent employees will find it easy to get their UAE work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The UAE work permit is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in the UAE is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
Work Permit Processing Time
Approximately 2-4 weeks
Can Work Permit be Processed in Country?
Applications for a work permit are processed in the UAE.
Work Permit Application Process
1. Collect documents
The local partner collects the following documents from the contractor:
- Copy of passport (minimum 6 months’ validity)
- Attested educational qualification certificate for senior category visa titles (not required for entry level titles)
- Passport photo with white background
- Personal details (New Hire Form)
- Salary details
2. Obtain approval from the Ministry of Labor (MoL)
Prior to entering the UAE, approval must be granted by the MoL. The local partner applies online for approval on behalf of the contractor. The MoL usually grants approval after ensuring that there are no unemployed UAE citizens who are able to perform the relevant job.
3. Work Entry Permit
The Ministry of Immigration issues a Work Entry Permit Visa (‘Pink Visa’) which allows the contractor to enter the UAE. This is valid for 60 days from the date of issue. Once the contractor enters the country using their Pink Visa, the umbrella company processes their Resident Visa.
4. Residence Visa Stamp
Once the contractor has completed their Medical Fitness Test, amongst other formalities, their passport is stamped with a Residence Visa for the Emirate in which they are working. Medical insurance is provided by the local partner and is mandatory for the issuance of a Residence Visa.
At most, the contractor will be required to travel to Abu Dhabi twice; once for their medical fitness test, and once for their driver’s licence conversion.
It takes approximately 3 weeks to receive the Residence Visa after arriving in Dubai. An Emirates ID is issued 2 weeks after visa stamping.
5. Open Bank Account
The contractor may now open a bank account for purposes of receiving employment income through the Wage Protection Scheme (WPS). Bank account details are provided to the umbrella company for payroll processing.
6. Family Visas
Once the Resident Visa has been stamped, the contractor may sponsor dependents such as a spouse and children. This requires proof of residency such as a valid tenancy contract (Tawtheeq for Abu Dhabi and EJARI for Dubai) or proof of property registration.
How Can Umbrella Companies Help You Get a Work Permit in U.A.E ?
As your permanent employer, umbrella companies are able to sponsor you for your UAE work permit provided they’re on the register of approved sponsors. Many different companies offer this service, because it makes contracting in the UAE infinitely simpler and saves you the hassle of continuous paperwork. Instead of changing your work permit every time you get a new contract, you can just work how you ordinarily would under the same permit. They protect you from the bureaucratic “rain” of legal compliance with the UAE immigration authorities. They can even deal with the UAE Embassy directly.
Through their service you may be able to use a business visa to get started quickly and then transition to a work visa in the UAE. It depends on your specific visa requirements. Be aware you may have to register for a residence permit in the UAE.