Recruitment Agency, Brokerage Agency, Employment Agency, Manpower Agencies, Temp Employment Agencies, Labour Supply Agencies, HR Consultancy – we’ve heard it all! So what’s the difference between all of these entities? What are the regulatory implications of having these activities? We are here to break it all down for you, to help you make the correct decision when looking at your business models and your preferred jurisdiction of operation.
Recruitment Agency and a Brokerage Agency are essentially the same – This activity allows the agency to mediate between employees and employers and to negotiate contractual and employment conditions on their behalf. This activity includes collecting and keeping databases. The databases that are maintained can include data about workers, available job opportunities, employment applications and any relevant information regarding the employee or employer.
Manpower Agencies and Labour Supply Agencies serve the same purpose. They essentially hire full-time employees, under their sponsorship and second them to third-party companies. This is often used for restaurants and hotels were the management and payroll of the staff are maintained by the manpower or labour supply agency.
Temp Employment Agencies – Like a Manpower agency and Labour Supply agency, these types of companies hire full-time employees under their sponsorship and second them to a third party for a temporary basis for short-term contracts. The sponsorship of the employees and the payroll remains with the agencies.
If you have an onshore license, these activities are regulated by the Ministry of Labour. These activities are limited to Local Emirati Nationals, meaning they must own the company 100%. The additional approvals from the Ministry of Labour do come at a cost, additional approvals for issuing a brokerage agency license/recruitment agency license is AED 50,000. An additional bank guarantee of AED 300,000 is required to be kept with the MOL for the lifetime of the license. Additional approvals for issuing a temporary recruitment agency license is AED 100,000. An additional bank guarantee of AED 1,000,000 is also required to be kept at MOL for the lifetime of the license.
If you are looking for a more flexible option, then a Free Zone Jurisdiction may be more suitable. Check out the blog Executive Search for an alternative option.
Are you looking at exploring your options? Contact one of our consultants today for a free consultation.