UAE Long Term Visas – Requirements and Eligibility Update

To further boost the UAE’s position as a primary destination for both local and international investors, a new system of entry visas for investors and professionals was announced in late 2018. Doctors, among other specialists in medical, scientific, research, technical fields, as well as top students studying in the UAE and investors/entrepreneurs, will now be granted with a long-term visa for 5 or 10 years. The new law focuses on doctors, investors and other specialised professionals as the UAE strives to attract intellects to the country and provides these individuals with a unique and comprehensive value-added platform.

In March 2019, the UAE Government released more in depth information on the requirements and eligibility of long-term visas:

5 Year Visa Requirements and Eligibility (to those without sponsors):

  • Investors who have invested in a property in the UAE, the property must have a gross value of AED 5 million or above. Also, the amount invested must not be on a mortgage basis, this is for cash buyers only, and the property must be owned for a minimum of 3 years.
  • Entrepreneurs who have an existing project with a minimum capital of AED 500,000 or for those who have an accredited business incubator in the UAE approved. These individuals would be provided with a multi-entry six month visa which is renewable for a further six months while under the application. The spouse, children, a partner and three executives would be included in this long-term visa.

10 Year Visa Requirements and Eligibility (to those without sponsors):

  • Investors with public investments of at least AED 10 million. The investment can include the following:
    • A deposit of AED 10 million in an investment fund within the UAE
    • Establishing a company in the UAE with a capital of AED 10 million or above
    • Partnering with an existing UAE company or setting up a new UAE company with a share value of AED 10 million or above
    • Having a total investment of AED 10 million or above in areas mentioned above, as long as the investment (in sectors other than real estate) is not less than 60% of the total investment
  • There will be conditions regarding the eligibility of long term visas for investors, including:
    • The amount invested must not be loaned
    • The investment must be retained for a minimum of 3 years
    • There should be financial solvency of up to AED 10 million
    • Visas can be extended to include business partners, but each partner must contribute AED 10 million or above
    • The long term visa can include the spouse and children in addition to one Executive Director and one Advisor
  • Also eligible are individuals with specialised talents, including; researchers and skills in the fields of science and knowledge such as doctors, scientists, inventors, specialists and creative persons within culture and art. The visa is extended to the spouse and children. However, the applicant must have a valid employment contract within a specialised field. There are extensive conditions for this form of long term visa.

The UAE offers an unparalleled lifestyle of quality with high-class accommodation, excellent educational and health institutions, world-class shopping facilities, abundant leisure facilities and most importantly is a tax-free city. The UAE’s open environment, tolerant values, infrastructure and flexible legislation constantly attract global investment and exceptional talents to the country, and this announcement further boosts this.

PRO Partner Group can assist you with any questions or applications of long term visas. For more information, please email info@propartnergroup.com.

Limited and Unlimited UAE Employment Contracts

What contract you should use for your employees?

Limited and Unlimited UAE Employment Contracts

One of the most common HR questions raised by our clients is related to UAE employment contracts, specifically the difference between a limited and an unlimited contract. We will share with you an overview of the main differences between a limited and an unlimited contract in accordance with the UAE Federal Law No. 8 of 1980, Labour Law.

What is a limited contract?
Under the Labour Law, Article 38;

  • The duration of a limited contract may not exceed four years.
  • The contract may be renewed by mutual agreement of the employer and employee
  • Should the contract be renewed, the new term shall be deemed an extension of the original term and shall be added to the calculation of the total service period of the employee.
  • Where the contract is not renewed it automatically cancels when it expires.

What is an unlimited contract?
Under the Labour Law, Article 39; an employment contract is considered an unlimited contract if it is concluded for an undetermined term. Simply put, an unlimited employment contract is one without a defined expiry date.

Termination of a limited contract
Where an employer terminates an employee for reasons other than that stated in Article 120 of the UAE Labour Law the employer is required to compensate the employee three months of gross salary, or for the remaining contract period; whichever is less. Should the employee wish to terminate the contract for reasons other than stated in Article 121 of the UAE Labour Law the employee is liable to pay 6 weeks of gross salary to the employer or for the remaining contract period; whichever is less.

Termination of an unlimited contract
The contract may be terminated by either the employer or employee on condition that the contractual notice period is given, usually defined as 30 days. The employer may terminate an unlimited contract without notice should the employee violate Article 120 of the UAE Labour Law. The employee may terminate the contract without notice if the employer fails to fill his obligations as stated in Article 121 of the UAE Labour Law.

To conclude, limited contracts can be useful for employers for project-based work with specific timelines. However, due to the inflexibility of limited contracts for termination purposes, unlimited contracts are more commonly used in the UAE as they are deemed to be more flexible and user friendly for both the employer and the employee.

*Please note the above information serves as a guide and not as legal fact. For further information and full coverage of UAE Labour Law visit – UAE Labour Law

PRO Partner group is one of the region’s leading business formation and company support providers, we facilitate all the procedures and legalities involved in establishing and maintaining a commercial entity in the UAE, Oman and Qatar; from start to finish. For more information contact us on +971 (0)4 456 17 61, email: info@propartnergroup.com

What is the Best Choice for You? Mainland vs Freezone Company

Mainland Company:

A Limited Liability Company (LLC), defines the liabilities of the company and it is limited to its shares. This is one of the oldest and most popular structures in the international market. A Limited Liability Company can be formed by a minimum of 2 and a maximum of 50 shareholders.

To incorporate this type of entity, as per UAE law, it is mandatory to have a UAE national (corporate or individual) owning a minimum of 51% shares and the remaining 49% of shares must be allotted to the other shareholder in the company. Mainland companies benefit majorly by having access to the UAE Market.

1. Overview of Business:

A mainland registered entity is allowed to carry out its business activities throughout the UAE market, It can work with anyone inside or outside the UAE and not restricted to just working within its freezone.

2. Ownership Structure

a) A UAE National is mandatory in all mainland licenses either as a Local Partner or a National Service Agent.

b) An LLC – Out of 100% shares, 51% of shares must be held by a UAE National and only 49% of shares are allotted to the expatriate partner.

c) An NSA – whereas the business activities that fall under a professional license, 100% of its shares are allotted to the expatriate partner and a UAE National is appointed as a National Service Agent.

3. Office Space

For every mainland license, there is a minimum requirement of 140 square foot office space needed. Only once an Ejari (Dubai) or Tawtheeq (Abu Dhabi) has been presented to the Department of Economic Development, will they release the license.

4. Visas Eligibility

There is no limitation on the visa eligibility for a mainland entity, An Electronic Quota is issued to every company by the Ministry of Labor(MOL) which shows their visas eligibility and this can be increased by increasing the size of your office space. Per 80 square foot of office space gives you the allocation of 1 visa. If you also have staff who are not in the office, like sales, pro’s and drivers then you can apply for a separate quota for them and this will not affect your office space quota.

5. Governing body approvals

a) A mainland license does require standard approvals for the license. For example, Department of Economic  Development(DED), Dubai Municipality (DM), Ministry of Labor (MOL), Ministry of interiors or Immigration (MOI).

b) In some cases, there are also third party governing approvals that will be needed, depending on your business activities: Knowledge and Human Development Authority(KHDA) for all Education related activities, Dubai Health Authority(DHA)/Health Authority Abu Dhabi(HAAD) for all medical related business activities, Food Control Department of Municipality for all food-related license, Civil defense for all security-related activities, Real Estate Regulation Authority(RERA) for all real estate regulated business activities.

Freezone Company:

A freezone is a defined and isolated land or setting, with a special tax, customs and imports regime, that is different from a mainland area. The main advantage of owning a freezone company is that as an expatriate, you can own the business 100% without having to give out any of its shares.

1. Overview of Business

a) A freezone company can only conduct business inside is specific freezone or outside of the UAE. It cannot provide its services or sell its products in any UAE mainland UAE jurisdiction.

b) The restriction of local business through a distributor is mainly to differentiate the business in the local market by mainland companies and freezone entities used for import/export. A distributor that has a Mainland license can act as your local agent and charge a certain fee which is lower than the 5% duty applicable on freezone invoices, if they trade directly into the local market. In case the company chooses to use a distributor, the goods should be shipped in through the distributor itself, if not, a 5% duty fee is applicable for any goods exiting the freezone.

C) Marketing a freezone company can also be restricted as you are legally only allowed to market your company inside the freezone, may that be face-to-face or even handing someone a business card.

2. Ownership Structure

Compared to the Mainland, a freezone license is 100% owned by the expatriate. There is no need for UAE National partner/service agent.

3. Office Space

Unlike the mainland, a freezone license can be incorporated with or without a physical office. Freezone Authorities allows the license holders to use a smart/flexi office usage but this restricts you on visa allocation usage.

4. Visas Eligibility

Freezone companies are limited to a certain number of visas and this normally varies from 1-6 visa packages. If you require more than the allotted allocation, then you may be asked to rent physical space inside that freezone, this can be costly due to the limited supply but high demand of commercial space.

5. Governing body approvals

The main purpose of having a freezone establishment is for importing and exporting goods and freezone authorities usually do not need approvals from external authorities. However, any external approvals from governing bodies outside of your freezone, will not be entertained.