In the United Arab Emirates (UAE), government plans to accelerate economic diversification and increase foreign direct investment (FDI) are driving demand for workers with specialised skills.
We the UAE 2031, for example, sets a national ambition to raise gross domestic product (GDP) to AED 3 trillion. In Dubai, the Economic Agenda D33 aims to double the emirate’s economy by 2033 and reinforce its standing as a global business hub. Growth in a wide range of sectors, from logistics to technology and innovation, is therefore anticipated. Given this, recruitment agencies are becoming increasingly important to employers looking to fill roles efficiently.
In this article, we discuss the following:
- Why the UAE?
- What activities can a recruitment firm conduct in the UAE?
- Mainland vs free zone: what each setup allows
- Step-by-step guide to setting up a recruitment company in the UAE
- Cost of starting a recruitment company in the UAE
- HR consultancy firms
- Compliance and regulatory considerations
- How we can help you start a recruitment firm in the UAE
- Frequently asked questions
Why the UAE?
With the required documents, the incorporation process in the UAE can be relatively quick, helped by a streamlined licensing system that makes it easier to establish a company without prolonged delay. In many cases, the UAE allows 100% foreign ownership, particularly in free zones, giving you greater control over how you structure your recruitment firm.
These are some of the advantages of starting a business in the UAE. You may view our Hawksford Expert Q&A for a look at some of the latest business opportunities attracting companies to the UAE.
What activities can a recruitment firm conduct in the UAE?
In the UAE, your recruitment firm can play one of two roles.
| Model | Also called | What your firm does | Who employs the worker |
|---|---|---|---|
| Brokerage firm | Executive search or recruitment consultancy firm | Introduce talent and act as an intermediary between employers and candidates. If a placement is made, the brokerage firm earns a success-based fee. |
The client company employs the worker directly. |
| Temporary recruitment firm | Manpower supply firm | Hire workers under the recruitment firm and assign them to client companies. Given this, there will be a wider set of responsibilities to manage |
The firm is the employer. |
Businesses conducting recruitment or manpower supply activities in the UAE should assess whether they fall within the scope of Designated Non-Financial Businesses and Professions (DNFBPs) under the UAE’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation. Where applicable, firms may be required to implement customer due diligence (CDD), ongoing monitoring, and sanctions screening controls in line with Federal Decree-Law No. 20 of 2018 and its implementing regulations.
Mainland vs free zone: what each setup allows
Where you choose to set up in the UAE also determines what your recruitment firm is authorised to do. In many cases, a free zone setup is used for executive search or recruitment consultancy. This is preferred by firms that intend to only screen candidates for the hiring company.
Free zones such as Dubai Multi Commodities Centre (DMCC), Meydan Free Zone, International Free Zone Authority (IFZA), Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) can accommodate this model.
If you’re operating in a UAE free zone, your ability to provide services to mainland UAE clients may be restricted or subject to additional structuring (e.g. use of locally licensed counterparties or service agreements). The exact position depends on the free zone authority, licence activity and how services are delivered in practice. Working directly with mainland UAE companies may require a mainland setup or additional permits.
A mainland setup is generally more suitable if you intend to apply for a temporary recruitment or manpower supply licence. Under this model, your business is taking on the responsibilities as the employer. That usually includes payroll, sponsorship and wider labour-law compliance. For that reason, mainland temporary recruitment companies tend to face closer regulatory scrutiny.
Step-by-step guide to setting up a recruitment company in the UAE
Take note final approval from the Ministry of Human Resources and Emiratisation (MOHRE) is required for mainland brokerage and temporary recruitment activities in the UAE. MOHRE approvals, however, may not be needed for recruitment firms in free zones such as the IFZA and DIFC. This, however, should be checked against your specific business activity.
Here’s an example of the steps involved:
1. Choosing your business activity
Start by deciding on your business activity as this will determine the type of licence and approvals required. As mentioned above, recruitment businesses in the UAE are typically categorised as either brokerage or temporary recruitment.
2. Reserving your trade name
Once the activity is clear, the next step is reserving your trade name and registering the activity with the relevant authority, whether that is the emirate’s Department of Economic Development or a free zone authority.
3. Preparing documents
At the same time, you will need to prepare a detailed business plan, identification documents for shareholders, ultimate beneficial owners (UBOs) and other supporting compliance materials (including source of funds/wealth information where required). A clearly identifiable business address will also be required for licensing and regulatory approval, so office space should be secured at this stage.
4. Applying for the MOHRE licence (for mainland companies)
You may then apply for the MOHRE licence, which is a mandatory step for mainland brokerage and temporary recruitment activities. Application is via the MOHRE’s system, and you must verify that the documents submitted are accurate.
A bank guarantee may also be expected. This is on a case-by-case basis and will depend on factors such as the jurisdiction selected, the exact business activity and the type of clients your firm intends to serve. Based on these details, our specialist team can consult with the relevant authorities to confirm your position.
5. Finalising licence and corporate bank account opening
If successful, the licence will be issued after the payment of fees and submission of any bank guarantees. Your company can then proceed with opening a corporate bank account, hiring staff and commencing business activities.
Applicants should also ensure compliance with UAE labour regulations, including worker protection requirements, prohibition on charging recruitment fees to employees, and adherence to Wage Protection System (WPS) obligations where applicable.
Cost of starting a recruitment company in the UAE
As of 2026, the following fees apply for a mainland recruitment firm:
| Activity | Government application fee | Bank guarantee |
|---|---|---|
| Brokerage | AED 25,000 | AED 300,000 |
| Temporary employment | AED 50,000 | AED 1,000,000 |
| Both activities combined | AED 75,000 | Higher amounts may apply |
Note: This does not include standard setup costs for incorporation, office space and visas.
HR consultancy firms
If you opt instead for a HR consultancy licence, you may provide services such as workforce planning, organisational design and improving employee performance. This can involve helping companies analyse workplace challenges and recommending solutions through reports, advisory work and structured programmes. MOHRE approvals and bank guarantee requirements generally do not apply.
Under this licence, however, you are not permitted to conduct recruitment activities. This includes introducing candidates, charging placement fees, sponsoring employees and supplying manpower. Certain activities such as conducting field surveys or questionnaires may also require prior approval from the relevant authority.
Free zones including the DMCC, Meydan Free Zone, IFZA, ADGM and DIFC support this setup. Take note that the flexi-desk arrangement is typically not permitted for this activity in free zones such as the DIFC, so you will need to arrange for a dedicated office space.
Firms should take care to ensure that their actual activities do not exceed the scope of their licensed activity. Conducting recruitment activities under a consultancy licence without appropriate approvals may result in regulatory breaches and penalties.
Compliance and regulatory considerations
Operating a recruitment firm in the UAE requires ongoing compliance with multiple regulatory frameworks, depending on the business model and jurisdiction of operation. Key considerations include:
- Labour law compliance, including worker protection and employer obligations
- Adherence to the MOHRE’s licensing conditions (for mainland entities)
- Ensuring activities align strictly with the licensed business activity
- Implementation of appropriate AML/CFT controls where applicable
- Sanctions screening and monitoring of clients and counterparties
- Data protection and confidentiality of candidate information
Failure to comply with these requirements may result in financial penalties, licence suspension or reputational damage.
How we can help you start a recruitment firm in the UAE
If you’re looking to incorporate a recruitment agency in the UAE, we can help you assess whether a mainland or free zone setup is more suitable, explain where MOHRE approvals may be needed and assist you with the documentation and licensing process.
Our expert team can also provide guidance on the areas that often determine the incorporation timeline in the UAE, such as office requirements, authority approvals and compliance considerations. For more information, please get in touch with us.
Frequently asked questions
Which government department handles recruitment agency licensing in Dubai?
In Dubai, mainland recruitment agency activities are regulated by the Ministry of Human Resources and Emiratisation (MOHRE). The commercial licence is linked to the relevant economic authority, but MOHRE approval is what authorises the business to conduct regulated brokerage or temporary recruitment activities.
In a free zone, the free zone authority issues the business licence.
What are the legal requirements to start a recruitment firm in UAE?
The legal requirements depend on the type of staffing activity. At a minimum, you will need to incorporate a legal entity, obtain the appropriate business licence and secure office space.
For mainland brokerage and temporary recruitment activities, approval from MOHRE is required, along with meeting specific conditions such as bank guarantees. If you intend to sponsor employees and deploy them to clients, you must also comply with labour laws relating to visas, payroll and worker protection.
What are the common pitfalls when starting a HR consultancy firm in the UAE?
Some companies may presume that a HR consultancy licence also covers recruitment, which is not the case. If your business starts introducing candidates for a fee or hiring and assigning workers to clients, you may fall within MOHRE regulation for mainland activities and require a different licence and approval structure. For free zone entities, an extra activity will need to be added to your licence.
What is the difference between a "brokerage" and a "temporary recruitment" licence?
A brokerage licence would allow you to introduce candidates to employers without becoming a party to the employment relationship, while a temporary recruitment licence would permit you to employ workers yourself and place them with clients.
Under the brokerage model, you act as an intermediary. Under the temporary recruitment model, your company becomes the employer. Our experts can assist you if you’re unsure which model better fits your business.
Should I set up in the mainland or a free zone?
That comes down to what you actually want your business to do. Free zones may work well if you are planning to run a consultancy-led model. If you, however, intend to supply manpower services, you will usually be looking at a mainland setup. You can explore this further with our team.
Is a physical office mandatory?
In most cases, yes. You will typically need a clearly identifiable business address as part of the licensing process.
Can I recruit workers from outside the UAE?
Yes, but only where your licensed activity and approvals allow it. The licence structure determines whether you may simply mediate introductions or whether you may also employ, sponsor and supply workers. You will also need to comply with UAE labour rules and any applicable source-country recruitment rules. Additional compliance requirements may apply in the worker’s home jurisdiction, including licensing, ethical recruitment standards and anti-trafficking regulations. Businesses should ensure cross-border compliance before commencing such activities.
What should recruitment agencies know about the UAE’s Emiratisation targets?
As of 2026, private sector companies with 50 or more employees are required to increase Emiratisation in skilled roles by 2% each year, with a 1% increase every six months. Separately, certain companies in selected sectors with 20 to 49 employees were required to hire one Emirati in 2024 and a second in 2025, while retaining existing Emirati employees.
Has the minimum salary for Emirati employees changed?
Yes. As of 1 January 2026, the minimum salary for Emiratis in the private sector has been increased to AED 6,000 per month. This applies to all new, renewed and amended work permits, with employers required to align existing salaries by 30 June 2026, after which penalties may apply for non-compliance.
Can I recover recruitment costs from workers?
No. UAE employers and recruitment agencies must bear the cost of hiring themselves. Under the UAE labour law, these costs must not be passed on to workers, whether directly or indirectly. This is strictly enforced to protect workers and prevent abusive practices, particularly in cross-border recruitment.
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