- January 1, 2024
- Posted by: IMRAN RASHID PATHAN
- Category: Blog
A Comprehensive Guide to Acquiring a Manpower Supply License in the UAE
The United Arab Emirates (UAE) is renowned for its dynamic business environment and economic prosperity, drawing entrepreneurs worldwide. With a robust economy, prime geographical position, and favorable policies for investors, it’s a prime locale for establishing diverse business ventures. A notable area of growth is the manpower supply industry. This article delves into the intricacies of securing a manpower supply license in the UAE.
Exploring the Manpower Supply Sector in the UAE
The UAE’s swift growth has fueled a high demand for both skilled and unskilled labor in sectors like construction, hospitality, healthcare, and others. This surge has given rise to a flourishing manpower supply industry, serving as a vital link between companies and their workforce requirements.
To operate a manpower supply enterprise legally in the UAE, it’s essential to acquire a specific license. This authorization enables business owners to hire, manage, and provide workers to other businesses, effectively addressing the labor shortage in the region.
Terms and Conditions for Manpower Supply License in UAE
- Eligibility and Ownership: a. Applicants must be Emirati nationals if they are natural persons, or all partners in a company seeking the permit must be Emirati nationals. b. No applicant or partner in the legal entity can have a criminal record involving moral turpitude, dishonesty, human trafficking, or any crimes specified in the labor law unless they have been rehabilitated (if their conviction resulted in imprisonment) or one year has passed since the ruling if it was a fine.
- Financial Guarantees:
To engage in mediation activities, a bank guarantee of a minimum of 300,000 Dirhams is required during the permit’s validity period. For temporary employment activities, the guarantee must be at least 1,000,000 Dirhams and must renew automatically. The Ministry can use this guarantee to settle any liabilities resulting from the Agency’s non-compliance with its legal obligations or related regulations.
- Business Location:
The Agency must possess a dedicated headquarters with a registered address solely for conducting its business activities. This location must meet the criteria specified in the relevant instructions and executive procedures.
- Ownership Changes:
Before making any changes to its ownership structure, including additions or withdrawals of partners, the Agency must seek written consent from the Ministry.
- Staffing Requirements:
The Agency must maintain an adequate number of administrators and supervisors with relevant experience in their respective fields.
- Management and Signatory Requirements:
Both the Agency’s manager and the authorized signatory for legal matters must be Emirati nationals holding university degrees and having appropriate experience in the relevant field.
Upon the initial approval of the license, the Agency is responsible for paying the legally mandated fees for the requested activity.
- Non-Ownership of Defaulting Establishments:
Applicants are not permitted to own or be partners in establishments that repeatedly fail to pay employees’ wages, operate fictitious businesses, or commit significant violations of housing requirements.
- Pledge for Temporary Employment Agency:
If applying for a license to operate as a temporary employment Agency, the applicant must submit a written pledge to:
- Ensure compliance with all regulations related to employee rights, including wage payments and housing
- Pay a 2,000 dirham insurance fee for every recruited employee.
- Maintain a minimum of twenty employees working for third parties at any given time, with durations of employment not exceeding those specified by the Ministry.
- License Suspension and Revocation: a. The Ministry reserves the right to temporarily suspend or revoke an Agency’s license for a maximum of one year in various scenarios, including: – Failure to meet any of the initial licensing conditions. – Submission of false documents or information during the licensing process. – Violation of the relevant laws, regulations, or instructions. – Involvement in acts related to forced labor or human trafficking. – Failure to renew the license as per the instructions.
- Revocation of the license can only occur after providing the Agency with a prior warning and a specified period to rectify the violation.
- Prohibited Actions: a. The Agency is strictly prohibited from: – Employing or recruiting child laborers in violation of applicable laws. – Collecting commissions or fees from workers, whether directly or indirectly. – Engaging in business with an employer facing group labor disputes or suspension of their establishment. – Collaborating with unlicensed persons or agencies for labor recruitment, both inside and outside the country. – Employing its workers at another Agency, regardless of the latter’s activity.
- Branch Offices: – The Agency has the option to establish branch offices within the same Emirate or in any other Emirate after obtaining a new permit from the Ministry.
Essential Steps for Acquiring a Manpower Supply License in UAE
- Choosing a Location and Legal Form:
Selecting an appropriate emirate within the UAE to establish the manpower supply business is crucial, as each emirate has distinct regulations. Deciding on the legal structure of the company, such as a sole proprietorship or limited liability company (LLC), is important as it impacts liability, ownership, and operational aspects. Business Planning and Naming:
- Craft a detailed business plan that highlights your business activities, objectives, and financial forecasts. This plan is often a prerequisite in the licensing procedure. Pick a distinctive and fitting trade name that aligns with the UAE’s regulatory guidelines. Requirement for Local Sponsorship:
In many cases, foreign entrepreneurs require a local sponsor or partner for setting up their business in the UAE. This could be an individual or a corporate entity, contingent upon the legal structure of the business. Resources like Virtue Corporate Services, Dubai offers comprehensive information on this aspect. Registration and Licensing Process:
- Register the business with the Department of Economic Development (DED) or other relevant authorities in the selected emirate, including submission of necessary documents and fee payment. Apply specifically for a manpower supply license, as there are different licenses for various types of business activities. Adherence to Compliance and Documentation:
Ensure compliance with UAE labor laws, including fair employment contracts, minimum wage standards, and adequate worker accommodations. Maintain updated and accessible records, such as employee details, visas, and permits. Facilitating Visa and Immigration:
- Assist the recruited workforce with visa and immigration processes, including securing work
A manpower supply license in the UAE serves as a vital tool in regulating the supply of labor across various industries. By clearly defining the terms and conditions of such licenses, both manpower supply agencies and their clients can ensure that their operations are conducted within the bounds of the law, contributing to a fair and ethical labor market in the UAE. All parties need to understand and respect these terms and conditions to foster a transparent and harmonious working relationship.