How to hire employees under free zone license
Free zones remain a dynamic hub of business activity in the UAE. Due to tax exemptions, low startup costs and sophisticated infrastructure, many foreign investors are keen to do business in the free zones established in major cities such as Dubai and Abu Dhabi.
However, a free zone license comes with certain conditions. When setting up a business in a UAE free zone, important factors to consider include the regulations regarding hiring under your free zone license. Unlike a company set up in the mainland license, a free zone company’s employees are sponsored by the authority managing the free zone and not the company itself. A free zone authority issues a limited number of employee visas per company, depending on the nature of their operations and type of license.
While every free zone authority has its own policies about staff sizes within its jurisdiction, company structure, and office size are the two major factors affecting the visa quota for a free zone company in the UAE.
For instance, the Dubai Multi Commodities Centre allocates employee visas based on the size of the initial office rented by a company.
- For a flexi desk set-up, a company is eligible to apply for up to three visas.
- For a serviced office, the company can apply for four to five visas,
- Whilst a physical space entitles a company to one visa for every nine square metres.
In order to expand staff, a company in DMCC has to move to a bigger office to justify an increase in its employee visa quota.
In Abu Dhabi’s media-centric free zone, twofour54, the number of visas issued also depends on the company structure and its office size.
A limited liability company or a company branch in the free zone can apply for up to 24 visas. However, the same company can choose to apply for an increase in quota when the need arises and pay a higher license fee for it.
Smaller enterprises in twofour54 have significantly fewer visa quotas.
Individual freelancers are entitled to a single visa, whilst companies set up with the support of organisations such as Emirati Entrepreneurs Association or the Khalifa Fund for Enterprise Development get two visas.
Whilst the process of applying for employee visas varies for every free zone authority, the set of documents required to be submitted are similar. The prospective employee’s:
- Educational credentials
- Medical test certificate
- Health insurance card
- Signed offer letter must be submitted to process his or her visa.
There are slight variations in the visa application process, depending on whether the prospective employee is currently based out of UAE or is already a resident. Employee visas are typically valid for two to three years and are subject to renewal.