Table of Contents
Frequently Asked Questions
What is the On Demand Labour Supply licence and what activity code does it cover
The On Demand Labour Supply licence operates under Activity Code 7820.97 and authorises businesses to supply temporary workers to third-party clients on a short-term or project basis. It is a regulated commercial activity in Dubai, distinct from permanent recruitment, executive search, or PRO services.
The core business model involves deploying operational labour to clients — such as construction firms, hospitality operators, logistics providers, and event organisers — while retaining the workers on your own payroll or under your visa sponsorship. You act as the employer of record, not the client.
Which regulatory bodies oversee this licence in Dubai
Two authorities are primarily involved. The Dubai Department of Economy and Tourism (DED) issues the commercial licence for mainland operations, while Meydan Free Zone is an alternative for free zone setups. Both routes are valid entry points depending on your intended client base and operational structure.
At the federal level, the Ministry of Human Resources and Emiratisation (MOHRE) governs all labour supply activity. MOHRE registration is mandatory before any workers can legally be deployed, regardless of whether your licence is mainland or free zone.
Why is MOHRE registration so critical for labour supply businesses
MOHRE registration is a federal legal requirement that must be completed before any labour supply activity commences. Operating without it — even with a valid commercial licence — creates serious legal exposure that can be difficult to reverse.
Registration establishes your entity as a licensed labour supplier and is the foundation for all downstream compliance, including visa quota allocation, Wage Protection System (WPS) reporting, and worker contracting. All deployed workers must be properly contracted and registered under MOHRE regulations before they set foot on any client site.
What is the Wage Protection System and how does it apply to temporary labour suppliers
The Wage Protection System (WPS) is a MOHRE-mandated payroll reporting framework that requires all employee salaries to be paid through approved channels and reported to MOHRE on a defined schedule. Compliance is described as non-negotiable for holders of the On Demand Labour Supply licence.
Failure to comply with WPS obligations results in licence suspension and restrictions on new visa issuance — both of which would directly halt your ability to deploy workers and serve clients. Building WPS-compliant payroll infrastructure from day one is therefore a core operational requirement, not an afterthought.
How does VAT apply to an On Demand Labour Supply business in Dubai
VAT at 5% applies to the service fee component of invoices issued to clients. This is governed by the Federal Tax Authority (FTA), and registration with the FTA becomes mandatory once annual turnover exceeds AED 375,000.
Proper invoicing structure is essential: invoices should clearly separate the service margin from the labour cost passthrough to ensure clean and defensible VAT reporting. Mixing these figures can create complications during FTA audits or reconciliation.
How are visa quotas determined for a labour supply company in Dubai
Visa quota allocation is tied directly to two factors: your office space and your paid-up capital. Both must be structured with your intended deployment scale in mind from the outset, as undersizing either can constrain how many workers you are permitted to sponsor.
Workers must hold valid UAE residency visas either under your entity or transferred through approved mechanisms. Since the labour supply model requires you to act as employer of record, visa administration is a core ongoing operational function rather than a one-time setup task.
Do Emiratisation quotas under the Nafis programme apply to labour supply businesses
Emiratisation quotas under the Nafis programme may apply depending on your business headcount and classification. These thresholds are subject to periodic revision by MOHRE, so operators are advised to verify current requirements directly with MOHRE rather than relying on fixed figures.
Understanding your Emiratisation obligations early is important because non-compliance can affect your ability to hire and deploy expatriate workers, which is central to the temporary labour supply business model.
What should client contracts include for a temporary labour supply arrangement
Client contracts for temporary labour supply arrangements should clearly define scope, duration, liability, and worker classification. This level of specificity is important to avoid any joint-employer disputes, where a client might be deemed to share employer responsibilities for the deployed workers.
Since the licence holder retains the employer of record status, contracts must reinforce that distinction. Well-drafted agreements also protect both parties in the event of worker incidents, early termination, or changes in project scope — all common occurrences in construction, events, and logistics environments.
On Demand Labors Supply (Temporary Employment) License in Dubai
Dubai's construction boom, events sector, and logistics expansion have created sustained demand for flexible, compliant temporary workforce solutions — and the On Demand Labour Supply licence (Activity Code 7820.97) is the regulated entry point for operators looking to serve that market.
This guide covers what the licence covers, who it suits, the regulatory framework, and how to set it up efficiently in Dubai — whether mainland or free zone.
Key Stats at a Glance
| Activity Code | 7820.97 |
| Activity Name | On Demand Labors Supply (Temporary Employment) |
| Regulatory Body | Ministry of Human Resources and Emiratisation (MOHRE) |
| Licence Authority | Dubai Department of Economy and Tourism (DED) or Meydan Free Zone |
| Market Outlook | UAE staffing and recruitment market on consistent growth trajectory, driven by infrastructure, hospitality, and logistics (IMARC Group) |
| MOHRE Registration | Mandatory before deploying any workers |
| VAT Applicable | 5% on service fees — Federal Tax Authority |
| WPS Compliance | Non-negotiable; all salaries must be reported to MOHRE |
What This Licence Covers and Who It's For
Activity 7820.97 authorises the supply of temporary workers to third-party businesses on a short-term or project basis. This is distinct from permanent recruitment, executive search, or PRO services — the business model here is operational labour deployment.
Core client segments include construction firms, hospitality operators, logistics providers, event organisers, and light manufacturing facilities. The commercial logic is straightforward: charge the client a daily or weekly rate per worker, pay the worker a contracted rate below that, and manage all compliance obligations in between.
The critical distinction is that workers remain on your payroll or under your visa sponsorship — not the client's. You are the employer of record. That creates both the value proposition and the compliance obligation. All deployed workers must be properly contracted and registered under MOHRE regulations before they set foot on any client site.
This is not a light-touch intermediary model. It requires active workforce management, visa administration, and payroll infrastructure from day one.
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Explore Over 2,500+Regulatory Framework and Compliance Obligations
MOHRE registration is the first and most critical step. No labour supply activity can legally commence without the company being enrolled as a licensed labour supplier with MOHRE. This is a federal requirement that applies regardless of whether you are operating from a mainland or free zone licence.
Workers must hold valid UAE residency visas either under your entity or transferred through approved mechanisms. Visa quota allocation is tied to your office space and paid-up capital — both of which need to be structured with deployment scale in mind from the outset.
The Wage Protection System (WPS) is non-negotiable. All salaries must be paid through WPS-approved channels and reported to MOHRE on schedule. Failure to comply results in licence suspension and restrictions on new visa issuance.
VAT at 5% applies to the service fee component of your invoices. If annual turnover exceeds AED 375,000, registration with the Federal Tax Authority is mandatory. Proper invoicing — separating the service margin from the labour cost passthrough — is essential for clean VAT reporting.
Emiratisation quotas under the Nafis programme may apply depending on headcount and business classification. Verify current thresholds directly with MOHRE, as these are subject to periodic revision. Client contracts should clearly define scope, duration, liability, and worker classification to avoid any joint-employer disputes.
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The setup process follows a defined sequence. Deviating from it — particularly by deploying workers before MOHRE registration is confirmed — creates legal exposure that is difficult to unwind.
- Step 1 — Choose your jurisdiction: DED mainland gives the broadest client access across Dubai, including government contracts. Meydan Free Zone offers a cost-efficient, fast-track setup with 100% foreign ownership, suited to a private-sector client base.
- Step 2 — Reserve your trade name and confirm Activity Code 7820.97 is approved for your chosen jurisdiction via DED eServices.
- Step 3 — Submit incorporation documents: passport copies, No Objection Certificate if applicable, Memorandum of Association, and a lease agreement (Ejari for mainland).
- Step 4 — Obtain initial approval from DED or your free zone authority, then register with MOHRE as a labour supply company.
- Step 5 — Open a corporate bank account. UAE banks require MOHRE registration and a physical office address before activating an account. Plan for 2–4 weeks for this process alone.
- Step 6 — Register for VAT with the Federal Tax Authority if turnover meets or is expected to meet the threshold.
- Step 7 — Begin visa quota allocation through MOHRE. Quota size is determined by office space and paid-up capital, so size both appropriately against your projected deployment numbers.
Timeline: Free zone setup typically completes in 2–4 weeks. DED mainland with all approvals runs 3–6 weeks depending on documentation and MOHRE processing.
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Calculate NowMainland vs Free Zone: Key Differences
A DED mainland licence is required if you intend to supply labour to UAE government contracts or work with clients who specifically mandate a mainland-licensed supplier. It also allows you to operate from any commercial location in Dubai without restriction.
Meydan Free Zone offers 100% foreign ownership, lower setup and renewal costs, and a faster incorporation process — making it the practical choice for operators targeting the private sector.
Both routes require MOHRE registration and full compliance with federal labour law. The jurisdiction does not create any exemption from WPS, visa obligations, or Emiratisation requirements.
Commercial Considerations and Market Opportunity
The demand side of this business is structurally supported. Dubai's infrastructure pipeline — including Expo legacy projects, the Dubai Urban Master Plan 2040, and sustained hospitality expansion — maintains a consistent requirement for flexible, project-based labour. Invest in Dubai data reflects ongoing capital deployment across these sectors.
Margins are thin but scalable. Operators running 50–200 deployed workers can build a viable, recurring-revenue business — particularly where client relationships are sticky and worker retention is managed well. The differentiator in this market is not price; it is compliance reliability. Clients pay a premium to suppliers who handle WPS, visa renewals, and MOHRE reporting cleanly and without incident.
Sector focus matters from the outset. Specialising in hospitality, construction, or logistics allows targeted client acquisition, a more manageable worker pool, and faster referral growth within a defined network. Generalist labour supply at small scale is harder to monetise efficiently.
According to IMARC Group, the UAE staffing market is on a consistent growth trajectory, underpinned by project-based hiring cycles across both public and private sectors. The opportunity is real — the execution requirements are equally real.
Conclusion
The On Demand Labour Supply licence (Activity Code 7820.97) is a commercially sound, well-defined activity in Dubai — provided the operator enters with a clear compliance structure, MOHRE registration in place, and a realistic understanding of WPS and visa obligations. The market demand is real and durable. The margin is in execution quality, not just worker volume.
If you are ready to set up your temporary employment business in Dubai, speak with our team to confirm the right jurisdiction, cost structure, and compliance pathway for your specific model.
References
- Ministry of Human Resources and Emiratisation (MOHRE) (mohre.gov.ae)
- IMARC Group (imarcgroup.com)
- Federal Tax Authority (tax.gov.ae)
- DED eServices (eservices.dubaided.gov.ae)
- Invest in Dubai (investindubai.gov.ae)
