UAE and Saudi VAT and labour-law basics for multi-country businesses

This guide is general information to help you plan. It is not tax or legal advice. Rules change, so confirm the details with a qualified adviser in each country before you act.

Indian businesses expanding into the Gulf quickly find that the region is not one market. The UAE and Saudi Arabia each have their own VAT rules, their own labour laws and their own digital systems for payroll. This guide gives you the basics for both, and explains how to run Indian and GCC companies side by side.

VAT in the UAE

The UAE introduced VAT in 2018.

Standard rate: 5%. Some supplies are zero-rated (for example most exports) and some are exempt (for example certain financial services and residential property).
Registration: mandatory once taxable supplies exceed AED 375,000 over 12 months; voluntary from AED 187,500.
Tax invoices must show prescribed details, including your Tax Registration Number (TRN), the customer’s details for B2B supplies, and the VAT amount.
Returns are filed with the Federal Tax Authority, usually quarterly.

The UAE has also introduced corporate tax, so check how it applies to your UAE company alongside VAT.

VAT in Saudi Arabia

Standard rate: 15%.
Registration: mandatory once taxable supplies exceed SAR 375,000 over 12 months; voluntary from SAR 187,500.
E-invoicing (FATOORAH): Saudi Arabia requires electronic invoices. Phase 1 covers generating compliant e-invoices; Phase 2 requires integrating your invoicing system with ZATCA’s platform, rolled out to businesses in waves. Check which wave applies to you.

Labour-law basics that shape payroll and attendance

Labour law is where most of the day-to-day differences show up, because it drives working hours, overtime, leave and end-of-service payments.

UAE

Working hours: up to 8 hours a day and 48 hours a week.
Overtime: paid at a premium on the basic wage, with a higher rate for night work.
Annual leave: 30 days a year after one year of service.
End-of-service gratuity: 21 days’ basic wage per year for the first five years and 30 days per year after that, subject to a cap.
Wage Protection System (WPS): salaries must be paid through the WPS.

Saudi Arabia

Working hours: up to 8 hours a day and 48 hours a week, reduced during Ramadan for Muslim employees.
Overtime: paid at the hourly wage plus 50% of the basic wage.
Annual leave: 21 days a year, rising to 30 days after five years of service.
End-of-service award: half a month’s wage per year for the first five years and a full month’s wage per year after that.
Wage protection: salaries are reported through the Mudad platform.

Running India and GCC companies side by side

The safest structure is to treat each country’s company as its own entity:

Separate books and tax registrations for each company: GSTIN in India, TRN in the UAE, VAT number in Saudi Arabia.
Country-specific payroll rules: working hours, overtime, leave and end-of-service calculated by each country’s law, not copied from India.
One view of the business for owners and finance, without merging the books.

How Indeza VCloud helps

Indeza VCloud runs several companies from one account and includes labour-law profiles for India, UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain, so attendance and payroll follow each country’s rules. ZKTeco attendance devices connect directly to the cloud, with no local software, wherever your teams are.

Book a demo or ask us about AED, SAR and KWD pricing.

Key takeaways

The UAE (5%) and Saudi Arabia (15%) have different VAT rates, thresholds and invoicing rules.
Saudi Arabia’s FATOORAH e-invoicing requires integration in phases; check your wave.
Labour law drives payroll: hours, overtime, leave and end-of-service differ by country.
Keep each country’s company as a separate entity, with its own payroll rules.