The first hire changes a company. Until then, the founder is the business. After it, the company is an employer, with a visa to sponsor, a contract to register, salaries to route through a regulated system, and a set of obligations that continue for as long as that person works for you.
None of this is difficult, but it is precise. The UAE's employment framework is built on Federal Decree-Law No. 33 of 2021, and most first-hire mistakes are small ones: an unregistered contract, a salary paid in cash, a probation clause that does not match the law. Each is easy to avoid if you know the rule before you make the offer.
This guide covers what the company needs in place before hiring, how work permits differ between the mainland and free zones, the contract and probation rules, paying salaries, gratuity, insurance, and who Emiratisation targets apply to. Rules are as published in September 2026.
Before you hire: the establishment card and visa allocation
A company cannot sponsor anyone until it has an immigration file. In Dubai this is the establishment card issued by GDRFA, which records the company's licence details, partners and authorised signatories and is renewed every year. Free zone companies hold one too, usually arranged through the free zone.
Next is capacity. A mainland company registers with the Ministry of Human Resources and Emiratisation (MOHRE), and Khaleej Times reports that its employee quota depends on the company's legal structure, the area of its premises and its operational needs. In a free zone, the free zone authority sets the company's visa allocation under its own rules. In both cases, the job title you give the employee must fit the activities on your licence, so check the licence before you write the offer.
Mainland or free zone: who issues the permit
On the mainland, Article 6 of the Labour Law is direct: no one may be employed without a work permit from MOHRE. For a worker coming from overseas, MOHRE's process runs in a clear order.
- Job offer. A formal offer setting out the terms, in Arabic and English and, where needed, a language the worker understands.
- Work permit. The company applies to MOHRE for a new work permit; the ministry reviews the file and approves it.
- Entry permit. The immigration authority issues an entry permit so the worker can enter the UAE.
- Medical and Emirates ID. After arrival, the worker completes a medical test and applies for an Emirates ID.
- Contract and residence. The employment contract is registered with MOHRE and the residence is issued.
In a free zone, the free zone authority issues the employment visa and work permit instead of MOHRE. Most free zones apply their own employment regulations alongside the federal Labour Law, which covers the private sector as a whole, while the DIFC and ADGM have their own employment laws. If your company sits in one of those two financial free zones, the rules below differ.
The contract and probation
Every employment contract in the UAE private sector is now a fixed-term contract. The original 2021 law capped the term at three years; an amendment in 2022, Federal Decree-Law No. 14 of 2022, removed the cap, so the parties can agree any fixed term and renew it. Renewals count as continuous service, and if both sides simply carry on after the term ends, the contract is treated as extended on the same terms.
Probation is set by Article 9. It can last up to six months, can only be used once with the same employer, and counts towards length of service.
| Rule | What the law says | Article |
|---|---|---|
| Contract term | Fixed term, renewable by agreement, no maximum length | Article 8, as amended in 2022 |
| Probation | Up to six months, once per employer | Article 9 |
| Employer ends probation | At least 14 days' written notice | Article 9(1) |
| Employee moves to another UAE employer in probation | At least one month's written notice | Article 9(3) |
| Employee leaves the UAE in probation | At least 14 days' written notice | Article 9(4) |
| End-of-service gratuity | 21 days' basic wage a year for the first five years, 30 days a year after that, capped at two years' wage | Article 51 |
| Final settlement | Wages and entitlements paid within 14 days of the contract ending | Article 53 |
Paying salaries: the Wage Protection System and gratuity
The Labour Law requires wages to be paid on their due dates under the rules the ministry approves. In practice this means the Wage Protection System (WPS), an electronic system that moves salaries through approved banks, financial institutions and exchange houses so the ministry can see that people are paid. MOHRE's guidance treats a wage as due from the first day of the following month and the employer as late if it is not paid within 15 days of that date. Late payers receive alerts, and MOHRE suspends services to non-compliant establishments from the seventeenth day. MOHRE upgraded the system in December 2025 with direct integration with banks through the Central Bank.
WPS applies to establishments registered with MOHRE. Free zones differ: some have integrated with WPS and some have not, so ask your free zone which payroll rules apply to you.
Gratuity is the other obligation to plan for. A full-time foreign employee who completes a year of continuous service earns end-of-service benefit based on the last basic wage: 21 days for each of the first five years and 30 days for each year after that, with part-years counted pro rata and the total capped at two years' wage. Since 2023 employers may also join a voluntary alternative end-of-service savings scheme, open to free zone companies too, in which contributions are invested in approved funds instead.
Insurance: unemployment and health
The Involuntary Loss of Employment scheme (ILOE) has applied since 1 January 2023. It is mandatory for private-sector and federal government employees, and in 2023 the ministry confirmed it is optional for free zone employees. It does not cover investors who own the companies they work in, domestic workers, temporary contracts, under-18s or retirees who draw a pension and join a new employer. After 12 months of subscription, it pays 60 percent of average basic salary for up to three months per claim. Enrolment is the employee's responsibility, although employers may register staff on their behalf.
Health insurance is the employer's cost. In Dubai and Abu Dhabi, employers must provide and fund cover and cannot pass the cost to the employee. Since 1 January 2025, the basic health insurance scheme has extended the obligation to private-sector employees in Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah, and a policy is required before a residence permit is issued or renewed.
Emiratisation: who the targets apply to
Emiratisation targets do not apply to a company hiring its first employee. They are set by MOHRE for private-sector companies above a certain size.
- 50 or more employees. Companies must grow the share of Emiratis in skilled roles by 2 percent a year. For 2026, MOHRE set 30 June as the deadline for the first 1 percent, with a further 1 percent due by the end of the year.
- 20 to 49 employees in 14 sectors. Companies in sectors including information and communications, finance, real estate, professional services, education, healthcare, construction, wholesale and retail, transport and hospitality had to hire one Emirati in 2024 and another in 2025.
The targets apply to establishments registered with MOHRE, which in practice means mainland companies. Free zone companies are generally outside them for now. If you plan to grow past 20 staff on the mainland, build Emirati hiring into the plan early.
Your first employee is also your first compliance file. Get the permit, the contract and the payroll right once, and every hire after it becomes routine.
How And Again Advisory helps
And Again Advisory coordinates the immigration side of hiring as part of our activation and ongoing support stages: the establishment card, visa allocation, work permits through MOHRE or your free zone, entry permits, medicals and Emirates ID. We keep renewal dates on one calendar so a lapsed card does not stop a visa.
We do not draft bespoke employment contracts, give legal advice or run payroll. For a contract dispute or an unusual clause, speak to a lawyer, and for payroll use a WPS-registered bank or exchange house. What we can do is make sure the pieces are in the right order and nothing is missed. See our first-year compliance checklist for the rest of the calendar, and our cost estimator for visa costs, with government fees passed through at cost.
Final thought: hire once, properly
The first hire is where a company learns its habits. Founders who register the contract, route salaries through the right channel and keep insurance current rarely have trouble later. Founders who improvise on the first hire tend to repeat it on the fifth.
If you are about to make your first offer and want the visa and permit side coordinated, get in touch.
