The growing flow of immigrants led to an increasing number of employment agencies in Dubai and the government responded by enabling the Licensing and Regulation of Private Employment Agencies Law in 2011, also known as MR 1283, issued by the Ministry of Labor.
Recruitment agencies in Dubai have the role of placing workforce in permanent job positions within companies and have the same role as the Employment Business program in Dubai, namely to employ workers, help them obtain work permits and outsource them for temporary positions within companies. The MR1283comes as a completion of the launching of Dubai Outsourcing Zone (DOZ), in 2007, that allowed foreign outsourcing companies to establish in Dubai.
Both local and foreign investors can open employment agencies in Dubai, with the mention that foreign entrepreneurs must first obtain a residence permit for entering the country. Also, a local partner is required when establishing a recruitment agency in Dubai.
Below, our company formation specialists in Dubai explain the requirements related to opening a staffing agency in this emirate or in one of its free zones. We specialize in offering company registration solutions to foreign investors interested in doing business in various industries in Dubai.
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Choosing the entity for an employment agency in Dubai
Before starting a recruitment company in Dubai, an investor will first need to verify the conditions for setting up such business and one of the most important steps is to choose a business form that will best represent the activities of the company. For this purpose, the limited liability company is the most suitable for recruitment companies established onshore and in free zones.
The Dubai limited liability company will require the following:
- at least 2 shareholders if it is set up in Dubai mainland and at least 1 shareholder if established in a free zone;
- a local partner will be required if the company is set up in Dubai mainland or free zone;
- the share capital of a free zone company will depend on the conditions imposed by the authority in the respective free zone;
- the documents which need to be prepared are the Articles of Association, no matter the place of incorporation.
It must be noted that in the case of recruitment agencies established in Dubai free zones, their activities are limited to that specific free zone. Our company registration consultants in Dubai are at your disposal with business formation services in mainland and free zones. We can also advise and assist with the documents to be prepared for starting an employment company.
Types of recruitment licenses in Dubai
There are two types of recruitment licenses which can be obtained by employment agencies in Dubai. These are the brokerage license and the temporary recruitment license. The brokerage license must be obtained by companies completing activities related to the mediation or employment relations between UAE and foreign nationals and UAE and foreign companies. In other words, a brokerage license will allow the employment agency to:
- receive applications from foreign and UAE nationals looking for employment;
- receiving requests from companies seeking to hire employees from the UAE or outside it;
- create a database of available jobs and post new jobs as they appear;
- keep information on employers and candidates and match them based on their requirements.
On the other hand, the temporary employment license will allow the recruitment agency to be the employer which outsources workforce to a UAE company. This means that the staffing agency is entitled to recruit and hire workers from the UAE or outside the country for specific conditions. In this case, the Dubai recruitment agency will act as a sponsor for foreign employees.
Conditions for obtaining a recruitment license in Dubai
Opening a recruitment agency in Dubai implies fulfilling a few conditions no matter the nationality of the applicant. First of all, the person applying for the recruitment license must have a clean criminal record. The company must have a registered address in Dubai which must be clearly displayed at its head office. It should also be noted that the office where the staffing agency will provide its services is subject to specific requirements.
Then, a brokerage license fee of 50,000 AED or a temporary recruitment license fee of 100,000 AED must be paid. Also, a bank guarantee must be deposited. The value in the case of a brokerage license is 300,000 AED, respectively 1,000,000 AED in the care of a temporary recruitment license. It should be noted that the special license for completing recruitment activities can be obtained by one of the shareholders of the company. However, the shareholder must be a UAE national.
There are also other conditions for employment agencies in Dubai, among which the requirement of appointing a manager who must also fulfill certain conditions, among which being registered with the Ministry of Labor in Dubai. The agencies must have sufficient employees to complete the recruitment activities.
The licensing of a Dubai recruitment agency
In order to open a company in Dubai, that will operate as a recruitment agency, a commercial license is required. The license must allow the company to conduct mediation activities between employer and employee. The license of a Dubai employment agency must be renewed yearly. One of the specifications of the MR 1283 is that only UAE nationals are authorized to open a recruitment company in Dubai and its manager must also be a UAE national. The new law also states that Dubai employment agencies must notify the Ministry about any changes made within the company.
Foreign investors are also allowed to open recruitment agencies within Dubai’s free zones and in the International Financial Centre (DIFC).
Documents required to open an employment agency in Dubai
No matter the type of services the company will supply, the following documents will be filed with the Ministry of Human Resources and Emiratization in order to obtain the special license:
- copies after a valid passport (s) of the company’s shareholder (s);
- copy after the applicant’s family book;
- copy after the ID card for nationals;
- a statement of good conduct;
- copy after the trade name application with the Trade Register;
- the shareholders’ written statements on the opening of the company;
- a blueprint of the employment agency’s location.
The protection of workers in Dubai
In order to align with European countries that are famous for setting the trend on recruitment agencies, the Dubai MR1283 is very strict about the protection of workers appealing to an employment business or a recruitment agency to find a job.
Apart from the guarantee deposited, employment businesses are also required to deposit 2,000 Dirhams for every employee brought in Dubai. For transparency purposes, the law on Licensing and Regulation of Private Employment Agencies states that employment businesses will be held accountable for the obligations a company has towards the worker. Also, employment business and recruitment agencies are required to hire qualified personnel and have an experienced manager.
The Labor Ministry has also set limitations for the fees that Dubai recruitment agencies are allowed to request from possible clients. Employment agencies in Dubai have the obligation to clearly state the terms and conditions of the contract and the duties of the employee. Recruitment agencies in Dubai must also keep records of their employees from the last three years.
The video below shows the main steps to open a staffing company in Dubai:
You can rely on our local specialists in company incorporation in Dubai for complete information about the requirements related to starting a recruitment company in this emirate. We can also guide you in opening a company in other prolific industries in Dubai. You can contact our company formation agents in Dubai, if you need details about the Licensing and Regulation of Private Employment Agencies, but also if you want to set up a company.