Imagine a region with over 500 million people, smack-dab in the center of global shipping lanes with a rich culture, growing economy, and loads of opportunity.
Well, you don’t have to imagine—just look to the Middle East.
The Middle East remains a compelling opportunity for international expansion, despite ongoing regional complexities. The region now hosts over 508 million people, spanning from Morocco to the Arabian Peninsula. This represents over 25% growth from nearly 400 million about a decade ago.
The Middle East encompasses major economies including Egypt, Iran, Turkey, Iraq, Saudi Arabia, and the United Arab Emirates (UAE). The region accounts for 6.3% of the world’s population while covering 4.9% of global land area. Islam remains the dominant religion, practiced by at least 90% of the population in most Middle Eastern countries.
The UAE stands out as a particularly attractive destination for global businesses. Dubai has evolved into a truly international hub where residents represent dozens of nationalities. The UAE’s diverse population includes significant communities from India, Pakistan, the Philippines, and Western countries.
Economic indicators for 2025 show strong momentum across the region. The Gulf Cooperation Council (GCC) countries—a political and economic union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—are projected to grow by 3.2% in 2025, with the UAE leading at a forecasted 4.6% growth rate. Oil production increases and continued economic diversification efforts support this optimistic outlook.
How the Middle East is changing
The business landscape has undergone significant transformation over the past decade, particularly in terms of foreign ownership and tax policies. The UAE now permits 100% foreign ownership for most mainland businesses, eliminating the previous requirement for local sponsors to own a stake. This change represents a fundamental shift in how international companies can structure their regional operations.
Corporate tax frameworks have also evolved across the region. The UAE introduced a 9% federal corporate tax on business profits exceeding AED 375,000 (approximately US$100,000) in 2024, followed by a 15% minimum tax for large multinationals in 2025. These changes align the region with global tax standards while maintaining competitive advantages.
Enhanced compliance requirements now span multiple areas, including Environmental, Social, and Governance (ESG) reporting, anti-money laundering protocols, and data protection. Companies expanding into the Middle East must navigate these evolving regulatory frameworks. The digitization of government services has streamlined many processes while requiring businesses to adapt to new digital compliance platforms.
5 considerations before doing business in the Middle East
Understanding the business landscape in the Middle East requires meticulous consideration of critical areas that differ significantly from many Western practices. These areas directly impact operational planning, employee management, and compliance requirements for international companies.
1. Working days and weekend patterns
The traditional Monday to Friday workweek common in Western countries does not apply uniformly across the Middle East. Most GCC countries, including Saudi Arabia, Kuwait, Bahrain, and Oman, observe a Friday/Saturday weekend. This aligns with Islamic traditions where Friday serves as the primary day for congregational prayers.
The UAE has adopted a hybrid workweek approach since 2022, with Friday designated as a half -day from 8 a.m. until noon, followed by a Saturday/Sunday weekend. This change reflects the country’s position as a global business hub while respecting religious observances. Major commercial centers like Dubai are increasingly implementing flexible work arrangements, including seasonal four-day workweeks for government employees during summer months.
Several countries in the region follow different patterns entirely. Turkey, Morocco, and Tunisia operate on the standard Monday-to-Friday schedule with Saturday/Sunday weekends, though they typically provide extended lunch breaks on Fridays for prayer time. Iran maintains a Saturday-to-Thursday workweek, with many businesses treating Thursday as a half-day.
For HR teams managing regional operations, these variations require careful coordination of meeting schedules, project timelines, and payroll cycles. Companies often need to adjust their global communication rhythms to accommodate the different weekend patterns across offices in the Middle East.
2. Language and documentation requirements
Arabic remains the official contract language across most Middle Eastern countries, but 2025 regulations show more flexibility for international businesses. Egypt’s Labour Law No. 14 of 2025 now requires employment contracts in four counterparts and mandates Arabic as the primary language, though foreign employees can receive dual-language versions. The Arabic version still takes legal precedence in any dispute, but the dual-language approach reduces misunderstandings during day-to-day operations.
The GCC countries have adapted their language requirements to accommodate large populations of expatriate employees. The UAE commonly accepts English-language contracts, particularly in Dubai’s international business districts, though Arabic versions may be required for certain visa and regulatory processes. Saudi Arabia’s 2025 labor law amendments require written contracts for all employees, with specific provisions for housing and transportation allowances to be explicitly outlined in the native language.
Many jurisdictions now operate with dual contract systems where companies maintain both internal English contracts and official Arabic versions filed with local authorities. When discrepancies exist between these documents, the official Arabic contract takes precedence in legal proceedings. HR teams should work with local legal counsel to ensure both versions align properly and that international employees understand the terms in their preferred language while maintaining Arabic legal compliance.
3. Paid holidays in the Middle East
Countries in the Middle East celebrate different holidays than the United States, and many of these observances are mandated paid holidays. For example, during the Islamic holy month of Ramadan, employees typically work reduced hours and cannot eat or drink during daylight hours. This restriction affects all employees, including non-practicing expatriates working in the region.
The major paid holidays in 2025 include several Islamic observances with specific dates, though these can vary since the Islamic calendar’s basis is the lunar cycle.
- Eid al-Fitr (Breaking the Fast): March 30, 2025
- Arafat Day: June 5, 2025
- Eid al-Adha (Festival of the Sacrifice): June 6–8, 2025
- Islamic New Year: June 26, 2025
- Prophet Muhammad’s Birthday: September 5, 2025
Additionally, Saudi Arabia now provides 10 to 15 days of paid Hajj leave for first-time pilgrims in the private sector, separate from regular annual leave. In the UAE, employees who work during public holidays receive either a compensatory day off or their regular wage plus 50% additional compensation. These holiday policies apply to both public and private sector employees across most Middle Eastern countries.
4. Paid time allotment for daily prayer
Employees are not required to pray during the workday, however, employers are legally required to provide time for prayer to any team member who requests it. This prayer time is considered paid break time under regional labor laws.
The five daily prayers (salat) are scheduled at specific times throughout the day based on the sun’s position. Many workplaces in the Middle East accommodate prayer by providing dedicated rooms and flexible break schedules. According to Pew Research Center data, approximately 60% of Muslims in Middle Eastern countries report performing all five daily prayers, though workplace participation varies by individual preference.
Modern office buildings in major business hubs like Dubai, Riyadh, and Cairo typically include prayer facilities as standard amenities. Companies operating in the region should factor these prayer breaks into daily scheduling and project planning to ensure smooth operations.
5. Salary allocation requirements in the Middle East
Employers in the Middle East must provide comprehensive benefit packages that typically include housing, transportation, and health insurance allowances. These benefits are often structured as salary allocations rather than separate payments, with housing allowances varying significantly by location.
The 2025 compensation landscape shows continued upward pressure on salaries, with the UAE projected to see 4% salary increases and Saudi Arabia around 2–3% growth. Health insurance remains a cornerstone benefit, with most employers providing comprehensive coverage that extends to dependents. Transportation allowances have become standard due to limited public transit options, while annual airfare allowances for expatriate employees continue as expected benefits.
Recent UAE labor law amendments, effective in 2025, require employers to continue salary payments for up to two months during dispute resolution processes. Companies are increasingly focusing on pay equity and internal benchmarking to ensure fair compensation across different nationalities and genders. The trend toward financial wellness programs has grown, with employers offering staff discounts, banking partnerships, and financial planning services to help employees manage living costs effectively.
Ready to expand in the Middle East?
The Middle East is full of opportunity, but going in unprepared is a recipe for disaster. Complex regulations coupled with harsh penalties means the stakes are high.
Pebl (previously Velocity Global) helps expanding companies handle the intricate details of employment in the Middle East, from contract translations to regional-specific benefits packages. As a global Employer of Record (EOR), our local teams are experts in exactly the kind of details that can trip up businesses new to the region. With coverage across 185+ countries and dedicated support for immigration, visa processing, and workforce mobility, we simplify the complexity of expansion in the Middle East. Contact us to learn more.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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