In 2025, UAE work legislation changes are poised to reshape employment conditions for both local professionals and international employees coming to the Emirates. These reforms matter to expats drawn by the UAE’s vibrant business hubs, as well as foreign companies seeking to remain compliant while hiring regionally.

This article highlights the major UAE employment law updates 2025, including adjustments to visa regulations, leave policies, worker classification, and remote work provisions. We’ll also look at how Employer of Record (EOR) services can simplify the transition—whether you’re a company expanding into the UAE or a professional relocating to pursue new opportunities.

Key legislative changes in 2025

Below are the most significant updates expected in 2025, based on government announcements and draft legislation in the Emirates. While particular rules remain unchanged, these revisions may notably impact hiring strategies, payroll operations, and daily work life.

Minimum wage

The United Arab Emirates (UAE) does not enforce a federal minimum wage in the same way many other countries do. Historically, each employment contract has been governed by Ministerial Decrees and Labor Laws, allowing employers and workers to negotiate salaries based on qualifications, experience, and market demand.

According to the Ministry of Human Resources and Emiratisation (MOHRE), there is no single statutory baseline pay rate that applies across all sectors and skill levels. Instead, the government relies on market forces and contractual agreements to determine compensation.

Although Federal Decree-Law No. 33 of 2021 (which came into effect in early 2022) introduced modernised employment frameworks, it did not establish a uniform minimum wage. Instead, it outlined enhanced protections related to working hours, overtime, and end-of-service benefits. This approach gives employers and employees room to negotiate salaries on a case-by-case basis, often influenced by the industry or the employee’s skill tier. The MOHRE’s guidelines (mohre.gov.ae) emphasise that transparent employment contracts must specify wages and benefits, ensuring clarity and legal enforceability.

Revised visa regulations

Most expats in the UAE hold work permits tied to their employers, but 2025 may see further liberalisation of these rules, giving employees more flexibility to switch jobs or sponsor family members. New visa categories could streamline the process for skilled professionals, particularly in tech or finance sectors.

1. Long-term visas: Proposed expansions to “Golden Visas” or similar programmes might lower eligibility thresholds, attracting mid-career specialists.
2. Work permit mobility: Additional clarifications may simplify the process of changing employers within the Emirates, reducing bureaucratic hurdles.

Taxation regulations

Below is a general overview of tax regulations in the UAE for 2025, focusing on potential updates for both companies and expats. Please note that while some changes have been officially introduced, others remain speculative and may evolve as Ministry of Finance (MOF) policies develop.

For companies

The UAE recently introduced a 9% federal corporate tax on business profits, effective from June 2023 (Federal Decree-Law No. 47 of 2022). By 2025, policymakers may refine certain aspects to ensure the system remains competitive while meeting fiscal goals. Potential discussions include:

• Free zone clarifications: Current incentives allow qualifying Free Zone entities to maintain a 0% rate if they meet substance requirements and transact primarily outside the UAE. By 2025, additional conditions or reporting obligations might be introduced to reinforce transparency.
• Exemptions and thresholds: Companies with profits below a specific limit (e.g., AED 375,000) are exempt from corporate tax, but authorities may revisit these thresholds to account for inflation or sector-specific needs.
• Transfer pricing rules: The government is gradually aligning with international standards under OECD guidelines, which could result in more detailed documentation and disclosure requirements for intercompany transactions.

For current and upcoming updates, the Ministry of Finance’s official portal and Federal Tax Authority (FTA) are the best primary sources.

For expats

A hallmark of the UAE has long been its absence of personal income tax on employment earnings. While this continues to be the case, there are a few areas expats should keep in mind as 2025 approaches:

The new corporate tax laws may affect your entity’s profits if you’re an expat running a small business or holding shares in a UAE-based company. Although individuals’ salaries remain untaxed, dividends or other distributions could fall under corporate tax rules, depending on how your business is structured.

The UAE imposes a 5% VAT on most goods and services, introduced in 2018. While there’s no official announcement of a rate increase for 2025, expats running businesses or offering freelance services should remain vigilant, as amendments could affect registration thresholds or compliance obligations. Monitor the Federal Tax Authority’s website for detailed VAT updates. Authorities have historically reiterated that there’s no plan for personal income tax on individual salaries, but economic conditions can evolve.

In all cases, seeking professional advice from tax consultants or leveraging Employer of Record (EOR) services can lighten the administrative load.

Leave policies

The UAE already mandates paid leave forms, including annual and maternity leave (up to 60 days, partially paid). By 2025, the government is considering modest increments to parental entitlements, aiming to strengthen its appeal to international talent.

Workers could see an extra 5–10 days of paid leave introduced for parents, reflecting the UAE’s commitment to a supportive family environment. These enhancements follow broader trends in the region to retain qualified professionals who value work-life balance.

Worker classification and gig economy

As the gig economy grows—particularly around delivery, rideshare, and freelance tech roles—the UAE is refining definitions of employee vs. contractor. 2025 may bring more rigorous classification rules, ensuring that workers performing employee-like tasks receive proper benefits and protections.

• Heavier penalties: Companies misclassifying workers as “independent contractors” may face fines or forced back payments to social security schemes.
• Contract clarity: Updated labor guidelines could require more explicit language around job scope, pay rates, and duration.

Remote and hybrid work provisions

Although the UAE is known for its on-site corporate culture, remote and hybrid models have gained traction in sectors like finance, tech, and consulting. From 2025, the Ministry of Human Resources and Emiratisation may introduce clearer rules on equipment reimbursements, data protection, and off-hour availability.

• Employer obligations: Companies might be asked to partially compensate employees for internet fees or ensure secure IT infrastructure for remote tasks.
• Work-life boundaries: Draft discussions suggest penalising employers who contact staff outside designated hours, especially in full-time telework setups.

Payroll adjustments and local compliance

With varied free zones and mainland regulations, the UAE is already involved in handling different sets of rules. 2025 could see standardization efforts—particularly around payroll processing and end-of-service benefits—that unify the system across Emirates.

Updates might clarify how remote or project-based workers accumulate gratuity entitlements, ensuring fair calculation at contract completion.

Expect additional data points or electronic filing mandates for monthly salary statements and social security (if applicable).

Implications for employees and expats relocating to the UAE

Extended parental leave and refined gig rules can open more stable, appealing job opportunities for expatriates. Meanwhile, potential changes to visa regulations could simplify transferring between employers, reducing the bureaucratic friction often faced by professionals.

However, abiding by updated laws—such as more rigorous worker classification or new telework guidelines—demands staying current on official announcements. Expats might also need to re-evaluate financial planning if the government adjusts end-of-service or other compensation structures.

Implications for employers

Foreign companies aiming to hire locally or manage remote UAE-based staff must adapt quickly to these 2025 updates. Stricter definitions around freelance work could invalidate old contract templates, exposing firms to legal or financial risks. Altered leave entitlements may require new HR policies or payroll software adjustments.

Visa reforms, while beneficial to talent mobility, could alter recruitment pipelines by letting employees switch roles more easily. Overall, a proactive approach—investing in local legal advice or structured EOR solutions—helps companies avoid compliance pitfalls.

Employer of record (EOR) services as a solution

Growing your business in the UAE could be challenging, but really rewarding. Staying on top of UAE work legislation changes 2025 can be complex, especially if you’re an overseas business or an individual unfamiliar with Emirati labor laws. Employer of Record (EOR) services offer a direct path to maintaining compliance without running a local legal entity.

For companies

• Legal compliance: By monitoring changes to employee classification, parental leave, and remote work guidelines, EORs reduce the risk of non-compliance.
• Onboarding: An EOR simplifies drafting employment contracts, ensuring alignment with local visa laws and labor regulations.
• Payroll management: EORs handle wage calculations and reporting, updating salaries for any new minimums or allowances.

For employees and expats

• Simplified relocation: EORs manage administrative details like work permits, reducing delays in starting your new role.
• Accurate tax and benefit management: Although personal income tax isn’t generally levied in the UAE, certain free zone or sector-specific charges may apply; an EOR ensures correct deductions or fee payments.
• Focus on career: With legal and payroll complexities handled, you can integrate smoothly into the UAE’s dynamic professional environment.

Looking ahead: preparing for 2025

From updated parental leave to robust gig economy rules and potential remote work mandates, the UAE work legislation changes 2025 underscore the need for businesses and expats to stay informed. Acting early—whether by reviewing contract templates or revisiting HR policies—helps avoid fines, delays, and reputational damage.

An Employer of Record in the UAE stands ready to guide both companies and individuals through these evolving requirements. If you have questions about upcoming legislation or need support aligning with updated laws, contact EOR for hands-on assistance. By adapting proactively, you’ll enter 2025 well-prepared to thrive in one of the world’s most vibrant economic hubs.

Disclaimer: This article offers general information and does not serve as legal advice. For specifics, consult official government resources, such as the Ministry of Human Resources and Emiratisation (MOHRE), or seek guidance from a legal professional familiar with UAE employment law.