What Is an Employer of Record (EOR)? UAE and Saudi Guide
EOR guide · Updated November 2026
An Employer of Record lets you hire staff in a country without your own company there. This guide explains how an EOR works in the UAE and Saudi Arabia. It also compares EOR with a PEO, your own entity and contractors, and covers costs.
Short answer: an Employer of Record (EOR) is a company that legally employs a person for you. It handles the contract, visa, payroll and compliance. You choose the person and direct their work.
What Is an Employer of Record?
An Employer of Record (EOR) is a company that becomes the legal employer of a person who works for you. The EOR signs the employment contract, sponsors the visa and runs payroll.
You choose the person, set their goals and manage their work. The EOR carries the legal duties of an employer in that country.
What an EOR handles
- Employment contract: issued under local labour law and registered with the authorities.
- Visa and work permit: sponsored under the EOR’s licence, plus medical tests and ID cards.
- Payroll: monthly salary, deductions and payslips, paid through approved channels.
- Benefits: mandatory health insurance, leave and end-of-service benefits.
- Compliance: labour law, data records, renewals and final settlements.
What stays with you
- Choosing and interviewing the person.
- Daily tasks, priorities and performance reviews.
- Access to your systems, tools and data.
- The decision to extend or end the engagement.
How an EOR Works in the UAE
In the UAE, a worker needs a work permit from the Ministry of Human Resources and Emiratisation (MOHRE) and a residence visa. Both are issued to a licensed employer.
An EOR uses its own trade licence and establishment card to sponsor the employee. This lets you hire in Dubai, Abu Dhabi or another emirate without setting up a company.
- You select the candidate and agree the salary.
- The EOR issues an offer and a MOHRE contract.
- The EOR applies for the work permit, entry permit, medical test, Emirates ID and residence visa.
- The employee starts work under your direction.
- The EOR pays salary through the Wage Protection System (WPS) each month.
- At the end of the contract, the EOR pays final dues, including gratuity.
End-of-service gratuity still applies to expat employees under an EOR. Estimate it with our UAE gratuity calculator.
How an EOR Works in Saudi Arabia
In Saudi Arabia, the EOR employs the person through its own commercial registration. It handles the main government platforms on your behalf.
- Qiwa: work permits and documented employment contracts.
- Iqama: the residence permit for non-Saudi employees, renewed by the employer.
- GOSI: social insurance registration and monthly contributions.
- Payroll: salary payments that match the registered contract.
Saudi employees hired through an EOR count towards the EOR’s Nitaqat rate, not yours. Read our Saudization guide before you plan Saudi hires.
The end-of-service award also applies. Use the Saudi end of service calculator to budget for it.
EOR vs PEO vs Your Own Entity vs Contractors
Each option gives you a person in the country. They differ in who employs the person and how much you must set up.
| Employer of Record | PEO | Your own entity | Independent contractor | |
|---|---|---|---|---|
| Legal employer | The EOR | Shared with you | Your company | Nobody; a service contract |
| Need your own local entity? | No | Yes | Yes | No |
| Visa sponsor | The EOR | Your entity | Your entity | The person, if eligible |
| Set-up effort | Low | Medium | High | Low |
| Compliance risk for you | Low | Shared | Full | Misclassification risk |
| Best for | First hires or testing a market | Companies with an entity that want HR support | Large, long-term teams | Short, defined tasks |
The term PEO is sometimes used for EOR services in the Gulf. Ask any provider who the legal employer will be.
When an EOR Makes Sense
- You want to hire in the UAE or Saudi Arabia before setting up a company.
- You need one to ten people in the country and want to avoid running a local entity.
- Your entity has no visa quota left for new hires.
- You need a person on site for a client project with a fixed end date.
- You are testing a new market and want to keep your options open.
When another model fits better
If the work can be done remotely, remote staff augmentation costs less. The engineer works Gulf hours from India or Pakistan for USD 225 a month on top of salary.
If you already have an entity and want a permanent employee, direct hire may suit you better.
EOR Costs in the UAE and Saudi Arabia
EOR pricing has two parts: the provider’s fee and the employment costs.
| Cost | What it covers | With Staffenza |
|---|---|---|
| EOR fee | Contracts, payroll, HR administration and compliance | AED 899 per employee per month |
| Salary | The gross salary you agree with the employee | Paid at cost |
| Government costs | Work permit, visa, medical test, Emirates ID or Iqama | Billed at actual cost |
| Insurance | Mandatory health insurance | Billed at actual cost |
| End of service | UAE gratuity or the Saudi end-of-service award | Accrued as the law requires |
Compare EOR with remote staffing and direct hire in our hiring cost calculator.
How to Choose an EOR Provider
- Confirm the provider holds its own licence in the country, and the right activity to supply staff.
- Ask for every fee in writing, including government costs and insurance.
- Check how salaries are paid and how payslips are shared.
- Confirm who owns intellectual property and how confidentiality is handled.
- Ask how the provider handles renewals, visa cancellations and final settlements.
- Check whether the provider can also recruit, so you have one partner for the full hire.
Staffenza offers EOR in the UAE and Saudi Arabia, with city pages for Dubai, Abu Dhabi and Riyadh. Email [email protected] for a written quote.
Related Guides and Tools
Employer of Record FAQs
What is an Employer of Record?
An Employer of Record (EOR) is a company that legally employs staff on your behalf. It handles contracts, visas, payroll and compliance, while you direct the daily work.
How does an EOR work in the UAE?
The EOR sponsors the employee’s work permit and residence visa under its own licence. It pays salary through the Wage Protection System and manages insurance, leave and gratuity. You manage the work.
Can I use an EOR in Saudi Arabia?
Yes. An EOR can employ staff in Saudi Arabia and handle the Iqama, Qiwa contract, GOSI registration and payroll. Check that the provider is licensed to supply workers to other companies.
What is the difference between an EOR and a PEO?
An EOR is the sole legal employer, so you do not need your own entity. A PEO shares employment with a company that already has its own entity in the country.
What is the difference between EOR and payroll outsourcing?
A payroll provider only processes salaries for staff you already employ. An EOR becomes the legal employer and takes on visas, contracts and compliance as well.
Why does an EOR cost more than payroll?
An EOR carries employer obligations, including visa sponsorship and labour law compliance. Payroll processing covers only the salary run.
How much does an EOR cost with Staffenza?
Staffenza charges AED 899 per employee per month, plus government costs at actual cost. Government costs include work permits, visas, medical tests and ID cards.
Who owns the employee’s work under an EOR?
Your EOR contract should assign intellectual property and work product to your company. Confirm this in writing before the employee starts.