Social security compliance

When working remotely abroad, your employees may become subject to the social security scheme of the destination country, which means you, as an employer, would need to pay social security premiums accordingly. UAE has entered into numerous social security treaties with various countries to prevent the payment of double social security premiums or non-insurance.

To ensure your employees remain compliant with these treaties, they must possess a valid Certificate of Coverage (CoC) obtained from the relevant local authorities. For WorkFlex users, the CoC is issued automatically after a trip request is submitted. Discover our solution for efficient social security risk mitigation here.

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Tax compliance

UAE has signed bilateral tax treaties with numerous countries that specify the steps to take to avoid double taxation, available here. These treaties generally follow international standards and provide guidelines for various types of income, including employment income.

Despite the existence of many tax treaties, the issue of Permanent Establishment remains a significant compliance concern for employers with employees temporarily working in the UAE, whether for a workation or a business trip. If a traveling employee is deemed to constitute a Permanent Establishment in the destination country, the employer may be required to register the company locally, allocate profits to the local business (branch), and file corporate taxes, leading to substantial administrative burdens.

To avoid this scenario, here are some key strategies:

If your employees are traveling for a workation, they should refrain from negotiating or signing sales contracts during the trip. Additionally, they should avoid visiting clients or any office, including the employer's local office in the destination country. Following these guidelines will help mitigate the important compliance risk for the employer related to permanent establishment.

If your employees travel for business, it may be impossible to refrain from the activities above. In this case, please make sure to inform your (tax) compliance department of this matter. If you and your organization are a WorkFlex user, this topic is covered through the WorkFlex platform.

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Overriding local employment provisions

Employees traveling to UAE are expected to comply with some basic local employment provisions that may be qualified as overriding, such as minimum salary standards. See the recent information on minimum wage in UAE here.

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When traveling to the United Arab Emirates for work—whether for a short business trip or an extended workation—it's essential to have comprehensive health insurance coverage to ensure access to medical care.

For business trips, the employer typically arranges the employee's travel health insurance. However, for workations, these responsibilities can be less clear. WorkFlex takes care of travel health insurance for trips worldwide to ensure there are no costly consequences for either the employee or the employer if accidents occur while working abroad.

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For travelers using WorkFlex‍

If you’re traveling with WorkFlex, comprehensive health insurance is automatically included if your employer has activated this feature. For more details, please refer to your trip request on the WorkFlex platform.

For other travelers

Ensure you have travel health insurance with worldwide coverage, whether for a workation or business trip, so that you can receive adequate medical treatment in case of an emergency.

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