Independent contracting in United Arab Emirates

Independent Contractor Guidelines in the UAE

Independent contracting in the UAE is not an applicable form of employment and carries significant risks. Contractors operate under commercial agreements and are responsible for their tax and regulatory obligations. They do not receive statutory benefits such as paid leave, health insurance, or end-of-service gratuity.

How independent contracting is regulated

Independent contractors in the UAE must have a valid commercial licence to operate legally. Without this, their engagement is deemed unlawful. Contractors invoice for services and handle their own tax obligations as a business.

What makes someone an employee?

In the UAE, a worker who receives an employment visa and an employment contract is automatically considered an employee.

Fixed-term contracts

All employment contracts in the UAE must be issued as fixed-term contracts, not exceeding three years, renewable for similar or shorter periods.

Penalties for Misclassification in the UAE

Misclassifying contracts (e.g. using unlimited-term arrangements or disguising employment as independent contracting) is a breach of the Labour Law.

Employers who fail to comply risk MOHRE penalties, including:

• Administrative fines
• Rejection of new work permits
• Suspension of company operations
• Exposure to employee claims for compensation

Courts may also consider a misclassified arrangement into a valid employment relationship, applying all statutory entitlements such as leave, end-of-service benefits, and notice protections, regardless of what was agreed in the contract.