A guide to placing contractors in the UAE
Michelle Reilly, CEO of 6CATS
With its futuristic skyscrapers, palm shaped islands, white beaches, warm weather and many cultural experiences, the UAE is certainly a place that will be top of the wish list for many travellers. But beyond the personal interest in the area, the country is certainly a promising place for business.
According to a recent survey from the United Nations Council for Trade and Development (UNCTAD), the nation has the 13th Most Promising Home Economy for Investment in 2017-19. Its economy is also expected to grow 3.9% this year due to a predicted influx in the tourism and travel fields as well as an inflow of foreign direct investment (FDI).
Change is also afoot in the UAE as the government continues to enforce its claim as a leading global business hub. While the nation has a reputation for its tax-free status, the New Year saw authorities introduce a 5% VAT on most goods and services. This move comes at a time when the government is seeking to diversify its economy, create a more stable business environment and improve opportunities for start-ups and SMEs.
It perhaps comes as no surprise to hear that one of the country’s leading sectors is oil. While this industry has suffered in recent years, a partial recovery in prices helped the country’s economic expectations for this year. And while the UAE is implementing plans to reduce its reliance on crude oil production, it will remain a key sector for some time yet.
The construction and infrastructure fields look set to see real growth in the coming months. As part of the plans to diversify its economy, the UAE government is investing heavily in infrastructure projects, with new VAT revenues being used to fund such developments. And with the World Expo in Dubai just two years away, construction of planned buildings is now well underway. However, with the next stages of the development set to begin later this year – including the ‘self-builds’ from participating countries – demand for construction professionals will remain high.
As part of the UAE Vision 2021, authorities have committed to creating a ‘world-class healthcare system’, exploiting developments in technology to achieve this. However, in order to accomplish the goals set out in this agenda, the country is in need of both tech and healthcare expertise, skills which are in short supply and high demand worldwide.
Clearly there’s a lot of potential in the UAE at the moment, however the nation has been plagued by on-going skills shortages for some time now which could hinder these plans. In fact, reports last year suggested that nearly seven in ten firms were struggling to source the skills they need. While these shortages are widespread, a dearth of talent is being particularly noted in the digital arena.
This mis-match between supply and demand will certainly put pressure on hiring plans which, according to a survey by KPMG, look set to be significant in the future. Around 56% of CEOs in the area are planning to recruit new talent in the next three years, but with the prevalent skills shortages it’s perhaps safe to suggest many will need to look to the world of contractors to fill demand.
What recruiters need to know
Clearly opportunities for recruitment firms are rife in the nation, however, when placing contractors in the country, recruiters need to be aware of a number of things. Life in the UAE is very different to many European locations. Perhaps the most well-known variance is the consumption of alcohol, which can be bought only from permitted licensed locations. Drinking alcohol in the UAE (except Sharjah which is a dry state) is allowed at any bar or restaurant owning a license, and there are plenty of them. However, it is an offense to be intoxicated in public and expats will be punished if found guilty. There will also be religious considerations to factor in, particularly during the month of Ramadan.
In terms of work permits and taxes in the country, again it is very different in comparison to much of Europe. Visit visas are available at a cost for western nationals for either one or three months. However, while these allow the holder to attend meeting or conferences, it is not permission to work. If the individual is found to be working in the country on a visit visa, they could be arrested, detained, fined and possibly deported. If a firm has sponsored the individual’s visa, they will also face a fine of up to USD 14,000.
Any non-nationals taking up employment in the country will need a work and residence permit and relevant sponsor labour card. The process to obtain these can be quite complex and once granted, the permit only lasts 60 days, so partnering with experts & Ministry of Labour licensed organizations in UAE is certainly recommended. Recruiters will need to be aware of small nuances in permit requirements such as the need to fly in to a specific airport for immigration checks, medical examinations at authorized centres, and mandatory Emirates ID application following entry into the country. In addition to this, employees require Public Relations Support at various stages from their sponsor like authorization letters/no objection certificates to apply for a driving license, liquor permit, and business visas for foreign travel etc.
Clearly the UAE is a place of many opportunities and one that recruiters should keep an eye on. But with strict employment laws in place, seeking expert advice ahead of making a placement really is a must.
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