Where an employee is legally employed in the UAE decides who approves their permit, which law governs their contract and whether Emiratisation quotas apply. Yet many mobility teams pick the structure first and discover the employment consequences afterwards. With the Emiratisation year-end approaching and Dubai now allowing free zone companies to trade on the mainland, the choice deserves a second look before the next assignee lands.
Who issues the permit
On the mainland, the Ministry of Human Resources and Emiratisation (MoHRE) issues work permits. The number of permits a company can obtain is tied to its establishment classification and its compliance record, including its Emiratisation standing.
In a free zone, the zone authority issues the visa and permit. Allocations are typically linked to the size of the leased office or the licence type rather than to MoHRE classification. The process can be faster, but it also means each zone has its own rules, forms and timelines.
Two zones sit apart. The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) run their own employment frameworks, with their own courts.
Which labour law applies
Mainland employment falls under Federal Decree-Law No. 33 of 2021. Most free zones follow the federal framework, but some publish their own employment regulations. DIFC and ADGM apply separate employment laws. DIFC, for example, uses a funded savings scheme for end-of-service benefits rather than the federal lump-sum gratuity.
For an HR team, this has a practical consequence. The same job title, moved from a free zone entity to a mainland one, can carry different notice, end-of-service and dispute-resolution terms. A single global template contract will not cover all three regimes.
Emiratisation: the mainland test
Emiratisation targets bind private mainland employers. Firms with 50 or more skilled employees are expected to grow Emirati participation each year, and smaller firms in targeted sectors have their own hiring requirements. MoHRE measures performance at year-end and applies financial contributions to firms that fall short.
Free zone companies are generally outside the mandatory mainland quotas at present. That position can change, and a free zone company that opens a mainland branch or operates under a mainland licence needs to confirm which regime applies to that part of its workforce. Check the current-year requirement with MoHRE and your zone authority rather than relying on past-year summaries.
What Dubai's 2025 resolution changes
Dubai Executive Council Resolution No. 11 of 2025, published in the Official Gazette on 3 March 2025, lets non-financial free zone companies conduct activities on the Dubai mainland while keeping their free zone status. Two routes exist: a branch licence, valid for one year at AED 10,000, and a temporary permit for specific activities of up to six months at AED 5,000. Both need approval from the free zone licensing authority, and the Department of Economy and Tourism oversees the licensing. Financial entities in DIFC are excluded.
The resolution widens the options for employers, but it does not remove the employment questions. Who holds the permit, where the employee is physically working and which entity pays them still determine the compliance position.
What this means for mobility teams
Run these checks before an assignment or hire is confirmed:
- Confirm the employing entity and its licence type: mainland, free zone, DIFC or ADGM
- Match the contract template to that regime, including end-of-service terms
- Check whether the entity falls under Emiratisation targets and where it stands before 31 December
- Confirm that payroll runs through the Wage Protection System where required
- Where the work will move between a free zone and the mainland, confirm which licence covers it
Companies without a UAE entity face an earlier question: whether to set one up at all. Employer of Record employment lets an organisation place talent in the UAE through a compliant local employer, with contracts, payroll and permits handled locally, while it tests the market or runs a project.
How xpath.global supports UAE employers
xpath.global manages UAE work permits, employment setup and compliance calendars as one programme, including Employer of Record employment for organisations that do not have a UAE entity. The structure is chosen against the assignment, not the other way round, so the permit route, the contract and the Emiratisation position are settled before the employee travels.
Work permits, employment setup, Emiratisation position and Employer of Record hiring in the UAE — settled before the employee travels.
Speak to our UAE mobility teamSources: KPMG UAE, Dubai Executive Council Resolution No. 11 of 2025 — March 2025; UAE Federal Decree-Law No. 33 of 2021 on labour relations. Requirements vary by zone and change; verify against MoHRE and the relevant zone authority before acting.
