What is an Employer of Record (EOR) in the UAE?

An Employer of Record (EOR) in the UAE is a third-party company that legally employs your team members on your behalf. While you manage the day-to-day work of your hires, the EOR handles the legal, tax, HR, and compliance responsibilities of being their official employer.

Think of it as hiring in the UAE without the paperwork or needing to set up a local entity.

How does an EOR help you hire without a local entity in the UAE?

Establishing a legal entity in the UAE can take months and comes with a hefty administrative and financial burden. An EOR eliminates this need entirely. It acts as the legal employer, allowing you to hire and pay full-time employees in the UAE quickly and compliantly without having to open a branch or subsidiary.

This means you can test the market, build local teams, and move fast all while staying 100% compliant with UAE labor laws.

What are the benefits of using an EOR in the UAE?

Some of the key benefits include:

• Speed to hire: Onboard employees in days, not months.
• No entity setup: Avoid the legal and operational cost of establishing a UAE company.
• Compliance peace of mind: Local labor laws, visa requirements, and payroll regulations are handled for you.
• Talent access: Instantly tap into the UAE talent market without red tape.
• Focus on growth: Spend less time on admin and more time scaling your business.

What is the legal role of an EOR in the UAE labor system?

In the eyes of the UAE government, the EOR is the official employer of record. It holds the employment contract, sponsors the visa (if needed), pays the salary through local payroll, and ensures end-of-service benefits and compliance are properly managed.

However, you retain full control over the employee's day-to-day responsibilities, KPIs, and performance.

Can a foreign company legally hire employees in the UAE using an EOR?

Yes, this is exactly what EORs are designed for. If your company is based outside the UAE and doesn’t have a legal presence there, an EOR provides a fully legal pathway to hire full-time employees.

It’s a popular option for international companies looking to expand into the UAE market without investing in costly infrastructure.

How much does it cost to use an EOR in the UAE?

EOR pricing in the UAE usually includes:

• A flat monthly fee per employee (covering admin, payroll, legal, etc.)
• Statutory costs (gratuity, insurance, end-of-service benefits)
• Optional extras like visa sponsorship, health insurance, or housing allowance

Costs vary depending on seniority, benefits, and visa needs, but most providers charge between $500–$1,000/month per employee, in addition to gross salary. RemotePass, in contrast, charges $349 per employee.

How fast can I onboard employees in the UAE through an EOR?

Typically, you can onboard a UAE-based employee through an EOR in as little as 1–2 weeks. If the employee needs a work visa, the process may take 3–5 weeks, depending on documentation and government processing times.

Compared to the months it takes to open a local entity, EOR is significantly faster.

What taxes and contributions are handled by the EOR?

In the UAE, there is no personal income tax. However, EORs manage several key statutory components:

• End-of-service gratuity (mandatory for full-time employees)
• Work permits & visa fees (if applicable)
• Health insurance (required in many Emirates)
• GOSI contributions (if hiring GCC nationals)

Your EOR ensures all government obligations are covered without requiring your intervention.

Can EORs in UAE support visa sponsorship?

Yes, many EOR providers in the UAE offer full visa sponsorship services, including:

• Employment visa processing
• Emirates ID and medical testing
• Dependents’ visas if needed
• Visa renewals and cancellations

This is especially important for hiring expats in the UAE, where local sponsorship is mandatory. At RemotePass, we offer visa sponsorship services, starting at $549 per employee. 

What employment contracts are used under an EOR in UAE?

Employees under an EOR sign a locally compliant labor contract with the EOR entity. This contract outlines:

• Salary
• Work location
• Probation period
• End-of-service benefits
• Paid leave entitlements
• Notice periods and termination clauses

You, as the client, may also sign a secondary agreement outlining work expectations and confidentiality with the employee but the EOR is the official employer under UAE law.

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What is an Employer of Record (EOR) in Saudi Arabia?

An Employer of Record (EOR) in Saudi Arabia is a third-party organization that becomes the legal employer of your workforce, handling employment contracts, payroll, benefits, and government compliance on your behalf.

It allows companies, especially those based outside the Kingdom, to legally hire and manage employees in Saudi Arabia without setting up a local branch or subsidiary.

How does EOR work under Saudi labor law?

Saudi labor law requires all employment to be formally registered under a locally licensed entity, with strict rules around contracts, Saudization quotas, and expat sponsorships. An EOR navigates this for you.

The EOR legally employs your talent, ensures employment contracts are compliant with local law, sponsors work visas for expats, manages payroll in accordance with the Wage Protection System (WPS), and ensures proper benefits like GOSI contributions and paid leave.

You still retain full control over your team’s daily responsibilities and performance.

Who uses EOR services in Saudi Arabia?

EOR services are ideal for:

• Foreign companies entering Saudi Arabia without setting up an entity
• Startups or SMEs exploring the market before making a long-term investment
• Enterprises running project-based or temporary operations
• Companies hiring remote employees or sales reps in the Kingdom
• Organizations needing fast market entry to secure talent or contracts

It’s a flexible model used across sectors like tech, oil & gas, construction, consulting, and fintech.

Can companies outside KSA hire employees inside KSA using EOR?

Yes. EORs are purpose-built to help foreign companies compliantly hire in Saudi Arabia. The EOR acts as the legal employer of your Saudi-based team while you manage their output.

This approach eliminates the need for local incorporation, commercial registration, or navigating complex regulatory processes.

What is the difference between an EOR and a labor supplier in Saudi Arabia?

Great question and a crucial distinction.

• EOR: Provides full-time, dedicated employees under your management. The worker is legally employed by the EOR but integrated into your team.
• Labor Supplier: Often used for temporary or outsourced roles, where labor is managed by the supplier, not you. This model is more transactional and doesn’t offer the same control or cultural alignment.

An EOR is the better choice if you want compliant, long-term employees embedded in your operations.

What compliance risks do you avoid by using an EOR in Saudi Arabia?

Saudi Arabia enforces some of the most rigorous labor and immigration regulations in the region. Failing to meet these standards can result in serious fines, delays, or even bans on doing business.

An EOR acts as your compliance shield, helping you avoid issues related to:

• Worker misclassification (contractor vs. employee)
• Visa and sponsorship violations
• GOSI (social insurance) contribution errors
• Non-compliance with the Wage Protection System (WPS)
• Failure to meet Saudization (Nitaqat) quotas for local hires

With an EOR, every hire is fully compliant from day one. You eliminate legal risk, protect your business reputation, and gain peace of mind knowing that labor, payroll, and immigration obligations are expertly managed behind the scenes.

How does remote hiring in Saudi Arabia work through an EOR?

If you're hiring remote or hybrid employees in Saudi Arabia, an EOR handles the legal side:

• Drafting compliant contracts
• Registering employees in the labor system
• Paying salaries through local payroll
• Managing benefits and taxes
• Handling disputes or offboarding, if needed

You focus on building the team; the EOR takes care of the logistics, whether the employee is in Riyadh, Jeddah, or working from home.

What is Saudization and how does EOR impact compliance?

Saudization, or the Nitaqat program, is a government policy that requires companies to employ a minimum percentage of Saudi nationals, depending on industry and company size.

An EOR helps you remain compliant by:

• Advising on your Saudization quota
• Ensuring Saudi nationals are correctly classified
• Managing reporting to the Ministry of Human Resources and Social Development (MHRSD)

If you’re hiring expats, your EOR ensures their employment doesn't jeopardize your Saudization compliance.

Are expat visas managed through EOR providers?

Yes. One of the key benefits of using an EOR in Saudi Arabia is full visa sponsorship support. EOR providers:

• Act as the employee’s official visa sponsor
• Handle Iqama issuance, renewals, and transfers
• Facilitate medical checks and fingerprinting
• Comply with GOSI and WPS

This is particularly valuable for companies hiring expats, where visa and immigration requirements can be complex and time-sensitive.

How much does EOR cost in Saudi Arabia?

EOR pricing in Saudi Arabia generally includes:

• A monthly management fee per employee
• Visa and Iqama costs
• GOSI contributions (usually 12% for expats, 22%+ for Saudi nationals)
• Optional extras (health insurance, end-of-service benefits, housing allowance)

On average, total EOR fees range from $600–$1,200/month per employee, depending on the complexity of the hire and required services. 

Meanwhile, RemotePass’ EOR costs $349 per employee.  For many businesses, this is far more cost-effective than setting up a local entity and hiring internal HR, legal, and payroll teams.

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EOR vs. Setting Up a Company in UAE: Which is better?

It depends on your goals. If you're testing the market, hiring just a few employees, or want to avoid the costs and bureaucracy of local incorporation, EOR is the better option. It’s faster, leaner, and ensures full compliance without legal headaches.

On the other hand, if you're planning a long-term physical presence, need to issue invoices locally, or require full operational control (like opening a retail store or warehouse), setting up a company makes more sense.

What’s the difference between PEO and EOR in the Gulf?

While often used interchangeably, PEO and EOR aren't the same, especially in the UAE and Saudi Arabia.

• A PEO (Professional Employer Organization) shares legal responsibilities with your company. However, this model doesn’t work in countries like the UAE and KSA unless you already have a legal entity there.
• An EOR (Employer of Record) becomes the full legal employer, making it ideal for companies without a local entity.

In short: If you're operating in the Gulf without a physical presence, EOR is the only compliant option.

When should I use EOR instead of starting a branch?

Use an EOR when:

• You want to enter the market quickly
• You're hiring fewer than 10 employees
• You’re exploring proof of concept or short-term contracts
• You lack the time, budget, or need to deal with local business registration
• You need to hire remote employees or regional reps

Starting a branch or subsidiary is better suited for companies with larger teams, physical operations, or long-term investment plans.

Can I switch from EOR to my own legal entity later?

Absolutely. One of the biggest benefits of using an EOR is flexibility. It’s common to start with an EOR, build your team, and later migrate employees to your own legal entity once you're ready.

A good EOR provider will support this transition by:

• Coordinating offboarding and re-hiring processes
• Transferring visas and contracts
• Maintaining compliance throughout

It’s a scalable model and isideal for growing businesses that want to test before they commit.

How to choose between EOR services in UAE vs. Saudi Arabia?

Choosing where to start depends on your market goals:

You might start in the UAE for faster execution or regional HQ access, while Saudi Arabia offers massive scale and long-term economic potential. An EOR helps you explore both without locking you into either.

What is the payroll process like under an EOR?

With an EOR, payroll becomes one less thing to worry about. Your EOR provider handles:

• Monthly salary disbursement in local currency
• Payslips and statutory deductions (like GOSI in Saudi Arabia or gratuity in the UAE)
• Tax filings (where applicable)
• Compliance with systems like the Wage Protection System (WPS)

You send a single consolidated invoice to the EOR, covering salaries, benefits, and service fees, and they take care of the rest. It’s clean, compliant, and hassle-free.

What benefits can be offered through an EOR?

EORs can offer a wide range of competitive, locally compliant benefits, helping you attract and retain top talent without having to build infrastructure.

Typical benefits include:

• Health insurance (mandatory in most Emirates and in Saudi)
• Annual paid leave
• End-of-service benefits or gratuity
• Sick leave, maternity/paternity leave
• Housing or transport allowances (optional)
• Remote work stipends or learning budgets (flexible add-ons)

Your EOR can help you benchmark local benefits packages so you remain competitive with regional employers.

Are there any restrictions on who I can hire via EOR?

Generally, EORs can support:

• Local nationals (UAE nationals, Saudi nationals)
• Expat professionals requiring visa sponsorship
• Remote workers based in-country

However, some limitations may apply depending on:

• Visa eligibility (e.g., age, nationality, profession)
• Employment quotas (like Saudization targets)
• Whether the role is part-time, freelance, or full-time (EORs usually support full-time employment only)

A quality EOR provider will conduct an eligibility check before onboarding.

How are disputes handled if I use an EOR?

Disputes, whether related to termination, misconduct, or employee grievances, are legally managed by the EOR, since they are the official employer.

However, you’ll be involved in every step. The typical process includes:

• Internal resolution discussions involving you and the EOR
• Documentation and compliance with local labor laws
• Formal termination (if necessary), including end-of-service settlements

Using an EOR ensures that any dispute is handled by the book, protecting you from labor court issues or legal exposure.

What due diligence should I do before selecting an EOR provider?

Choosing the right EOR partner is crucial. Here’s what to look for:

• Local legal presence in UAE/KSA (not operating via third parties)
• Experience in your industry and region
• Transparent pricing with no hidden fees
• Visa and payroll expertise
• Employee benefits offerings
• Client references or case studies
• Tech-enabled platform for onboarding, payroll tracking, and compliance

Remember: your EOR is the legal employer of your people. Choose a partner that will protect your reputation, ensure compliance, and create a positive employee experience.

Want to hire in the UAE or Saudi Arabia without opening a legal entity? 

Book a free consultation with Remotepassor visit our landing pages for EOR UAE and EOR Saudi Arabia to get started.

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