UAE PEO & Employer of Record (EOR): MOHRE Staff Leasing License Guide 2026

Updated August 2026.

Understanding PEO vs EOR: Definitions and UAE Legal Framework

A Professional Employer Organisation (PEO) enters a co-employment relationship with the client company: both the PEO and the client share employer obligations — the PEO handles payroll, benefits, and compliance, while the client directs the worker’s day-to-day activities. In contrast, an Employer of Record (EOR) is the sole legal employer: the worker is on the EOR’s payroll and visa, and the client has no formal employment relationship. The EOR contracts with the client to provide workforce services.

In UAE, both models are operationalised under MOHRE’s Manpower Supply or Staff Leasing license framework, governed by Ministry Decision 279/2021 on Organising the Activities of Private Agencies for the Supply of Manpower. This decision updated and replaced earlier ministerial directives on manpower supply and introduced stronger anti-abuse provisions particularly around visa trading (a practice where agencies sponsor workers but sell their visa status to unofficial employers).

The EOR model has grown rapidly in UAE since 2021 because it enables foreign companies to hire UAE-based talent without establishing their own UAE legal entity — a critical path for tech companies, startups, and international NGOs that want a UAE presence without the 3–6 month entity setup timeline.

MOHRE Staff Leasing License: Requirements Under Ministry Decision 279/2021

The Staff Leasing/Manpower Supply license is a category of MOHRE’s Private Employment Agency classification. Key requirements:

• DED Trade License with “Manpower Supply” or “Labour Supply” as the primary business activity (DED activity code 7492.01 or equivalent).
• Security deposit of AED 50,000–100,000 with MOHRE — the exact amount depends on the number of workers sponsored. Agencies sponsoring more than 200 workers may be required to increase the deposit.
• Physical office with valid Ejari registration. Unlike recruitment agencies, manpower supply firms often need larger office space as workers may congregate for onboarding, document processing, or deployment briefings.
• WPS (Wage Protection System) registration with the Central Bank of the UAE (CBUAE) — PEO/EOR firms must submit Salary Information Files (SIF) for all workers monthly via a UAE bank with WPS capability.
• Ministry Decision 279/2021 compliance declaration — the license application requires attestation that the agency will not engage in visa trading, will disclose all client placement contracts to MOHRE upon request, and will maintain worker welfare standards.

Annual MOHRE license renewal is AED 15,000–35,000. Total first-year setup cost including DED license (AED 18,000–30,000), office (AED 50,000–120,000), security deposit (AED 50,000–100,000), WPS bank setup, and government fees: AED 200,000–350,000 before staffing and technology investment.

DEWS: Dirhams for Employees Working in Dubai

The Dirhams for Employees Working in Dubai (DEWS) scheme — administered by ADIB and Zurich — is a funded end-of-service benefit plan that replaces the traditional EOSB gratuity for participating companies. Under DEWS, employers contribute a monthly amount (equivalent to the worker’s accrued EOSB entitlement, roughly 5.8% of basic salary for employees in their first 5 years) into an individual employee account invested in a range of Shari’ah-compliant and conventional funds.

For PEO and EOR companies, DEWS is significant because it eliminates the unfunded EOSB liability that accrues on the balance sheet for each worker. Under the traditional system, a PEO employing 500 workers for 3+ years could carry an EOSB liability of AED 5M–15M — a significant financial risk if workers leave en masse. DEWS converts this into a funded, ring-fenced liability.

DEWS participation is currently voluntary for DIFC entities and companies in other free zones, with a phased rollout toward mainland companies expected to extend through 2027. PEO/EOR firms operating in DIFC or ADGM can immediately enrol workers in DEWS; mainland entities should confirm current enrolment eligibility with their HR legal advisor.

GPSSA Pension Contributions and Emirati Workforce in PEO/EOR Models

When a PEO or EOR company employs UAE nationals (Emiratis), General Pension and Social Security Authority (GPSSA) contributions are mandatory:

• Employer contribution: 15% of basic salary
• Employee contribution: 5% of basic salary
• Government contribution: 2.5% (paid by federal government)

Total employer cost of employing an Emirati through a PEO: 15% GPSSA + any Emiratisation-linked wage subsidies (which can offset some cost for employers meeting Nafis targets). The Nafis programme — UAE’s national Emiratisation initiative — pays wage subsidies of AED 3,000–8,000/month for Emirati employees in private sector companies with 50+ workers. PEO/EOR firms must carefully track whether the client company or the PEO is the entity counted for Nafis Emiratisation quota purposes — MOHRE’s position has been that the legal employer (the PEO/EOR) is responsible for the quota, not the client.

In Abu Dhabi, pension is governed by ADRPBF (Abu Dhabi Retirement Pensions and Benefits Fund) — slightly different rates apply for Abu Dhabi government-affiliated employers; most PEO/EOR arrangements for private sector clients in Abu Dhabi will use GPSSA.

WPS SIF Submission and CBUAE Compliance for PEO/EOR Companies

The Wage Protection System (WPS) requires all UAE mainland employers to pay workers’ salaries through CBUAE-approved channels within 10 days of the wage due date. For PEO/EOR companies, WPS compliance is a core operational function:

• SIF (Salary Information File) preparation: Monthly SIF files in XML format must be submitted via the employer’s designated WPS bank before salary disbursement. The SIF captures each worker’s labour card number, basic salary, and allowances.
• Bank selection: PEO/EOR companies must open a dedicated WPS payroll account at a CBUAE-approved WPS bank (Emirates NBD, ENBD, FAB, ADIB, Mashreq, and others). Salary transfers from this account trigger automated WPS compliance tracking.
• WPS penalties: Non-compliance (late salary payment or WPS file errors) results in MOHRE placing the company on a WPS watchlist, barring new work permit applications until resolved. Repeat violations result in fines of AED 5,000 per worker affected per month.

EOR companies typically charge clients a markup of 15–25% on the worker’s total monthly cost (salary + employer social contributions + insurance + visa amortisation). On a worker earning AED 15,000/month, the EOR’s all-in cost might be AED 18,000–20,000/month (salary + employer GPSSA if Emirati, health insurance, visa costs amortised monthly), with the client billed AED 20,700–25,000/month.

Flexible Workforce Model: Benefits for Client Companies and UAE Regulatory Position

The primary value proposition of UAE PEO/EOR services to client companies:

• No end-of-service liability for the client: All EOSB/gratuity obligations rest with the PEO/EOR as the legal employer.
• Visa sponsorship on PEO/EOR company premises: Workers are sponsored under the PEO/EOR’s establishment card, not the client’s — the client avoids consuming their own visa quota.
• Rapid deployment: PEO/EOR companies with existing MOHRE approval can deploy a new worker in 2–3 weeks vs. 6–10 weeks for a company setting up its own UAE entity.
• Multi-country workforce management: Multinational PEO/EOR providers (Deel, Remote, Velocity Global with UAE EOR capacity) manage workers across multiple GCC and international jurisdictions from a single platform.

MOHRE’s regulatory position on EOR has clarified over 2024–2026: the EOR is responsible for all MOHRE obligations including WPS compliance, occupational health, work permit renewals, and worker welfare inspections. Clients who attempt to use EOR arrangements to avoid MOHRE visibility may find that inspectors treat the actual place of work as determinative — if a worker is permanently stationed at the client’s premises, MOHRE may challenge the EOR structure and require the client to sponsor the worker directly.

Comparison: PEO vs EOR vs Manpower Supply in UAE

Feature	PEO	EOR	Manpower Supply
Legal Employer	Shared (PEO + client)	EOR only	Manpower firm
MOHRE License Required	Staff Leasing	Staff Leasing	Manpower Supply
EOSB Liability	PEO	EOR	Manpower firm
Typical Client Markup	12–18%	15–25%	10–20%
Setup Cost (AED)	200k–400k	250k–600k	150k–300k

Frequently Asked Questions

What MOHRE license does a UAE Employer of Record (EOR) company need?

An EOR company in UAE requires a MOHRE Staff Leasing/Manpower Supply license under Ministry Decision 279/2021. This is distinct from a Recruitment Agency license — the EOR is not placing workers with an employer; it is the employer. The license requires a DED trade license with Manpower Supply activity, a security deposit of AED 50,000–100,000, WPS bank registration, and a physical office.

Does a client company need its own UAE trade license when using an EOR?

No — that is the primary benefit of the EOR model. The EOR is the legal employer and visa sponsor; the client company does not need a UAE entity or trade license to engage workers in the UAE through an EOR. However, if the client’s UAE activity generates taxable revenue or requires regulatory permits (e.g., financial services, healthcare), the client may still need a UAE entity for those regulatory reasons, separate from employment.

What is DEWS and do all UAE workers benefit from it?

DEWS (Dirhams for Employees Working in Dubai) is a funded end-of-service benefit scheme administered through ADIB and Zurich, replacing the traditional unfunded EOSB gratuity for enrolled companies. As of August 2026, DEWS is available to DIFC entities and certain free zone participants; a nationwide mandatory rollout for mainland companies is under phased implementation through 2027.

How does WPS compliance work for a PEO managing 100+ workers?

The PEO prepares a monthly SIF (Salary Information File) in XML format for all workers, submits it via the WPS bank before the salary due date, and then disburses salaries through the designated WPS payroll account. CBUAE automatically tracks compliance and reports to MOHRE. Non-compliance bars new work permit applications until resolved. PEO companies typically use payroll software (Bayzat, Gusto UAE, SAP) with WPS SIF generation built in.

Can a PEO or EOR company operate from a UAE free zone?

PEO/EOR companies can be licensed in a free zone (DIFC, ADGM, DMCC) for their management entity, but must additionally hold a MOHRE Staff Leasing license from the mainland if they are sponsoring workers employed at mainland UAE companies. Free zone entities that sponsor workers exclusively for free zone-based clients can operate under free zone employment regulations without mainland MOHRE registration, but this limits the client base significantly.