HR consultancy in Dubai: how to set one up

The Gulf labour market is a puzzle companies pay to have solved: multicultural workforces with dozens of nationalities, high turnover, shifting employment frameworks and a permanent war for talent. For the human resources consultant — organisation, performance, training, workplace climate — Dubai is not just an attractive market: it is a base from which to serve clients across the whole region.

The concrete route to incorporate exists as an official activity with a name of its own: “Human Resources Consultancies”, code 7414-06 in the DMCC activity list, within its professional services sector. This guide breaks down exactly what it allows, where its limits are — it has them, and it pays to know them before signing — and how it is taxed.

The official activity: what it allows

The activity covers firms specialised in studies and consultancy on workforce planning and in performance improvement through the analysis of employee problems — technical, psychological or behavioural. The process the official list describes is the complete consulting cycle:

• Analysis of the problem and the search for the appropriate solution.
• Delivery through reports, advice and consultancy.
• Design of professional and administrative programmes.
• Proposal of the appropriate training to overcome the problems and raise performance.

The limits: what the activity is not

Two boundaries matter, and both come from the list itself:

1. It is not employment intermediation. Sourcing candidates and placing them in companies — recruitment, headhunting, staff supply — is another activity, with another licence and another regulatory framework in the UAE. With 7414-06 you advise on the people the client already has; you do not supply personnel. If your model mixes both, the structure must account for it from the design stage.
2. Field surveys are authorised beforehand. The official description is explicit: firms under this activity may not conduct field surveys or questionnaires without the prior approval of the competent authority. Analysis and consulting are unrestricted; structured fieldwork on employees requires that prior step.

Added to this is the Human Resources Consultancies Undertaking, the specific letter of commitment the free zone requires you to sign for this activity — the formalisation that you know and accept the sector’s rules.

The consultancy’s taxes

The framework is that of any professional services firm in the Emirates. On VAT, services to local clients are taxed at 5% and exporting services to clients outside the country can qualify for the 0% rate under the conditions of the regulations; VAT registration is mandatory once you exceed AED 375,000 of annual taxable turnover. On profits, Corporate Tax at 9% above AED 375,000, with the qualifying free zone regime as a possible route to 0% if activity and income fit its conditions.

For a consultancy with mixed clients — the local bank and the multinational headquartered abroad — the accounting that correctly separates the 5% from the 0% from the first invoice is the difference between a smooth tax close and a regularisation.

Steps to set up the consultancy

1. Activity and scope: confirm that 7414-06 covers your real service proposition, and add complementary activities if your model calls for it (training, management consulting).
2. Structure and capital: a company with AED 50,000 of share capital.
3. Undertaking and file: signing of the sector’s letter of commitment and the shareholders’ KYC.
4. Incorporation and space in the free zone — from flexi desk to office, depending on the team.
5. Visas for the founder and the consultants.
6. VAT and accounting from the start, with the 5%/0% classification defined before the first invoice.

Conclusion

Human resources consultancy has a clean route into Dubai: a specific official activity, a reasonable entry capital, no territorial restriction and a sector requirement — the Undertaking — that is resolved with a signature. The two keys that separate a well-built structure from a future problem lie in the limits: do not cross the line into employment intermediation without the corresponding licence, and do not carry out fieldwork without prior approval. Within that perimeter, the market is as large as the region.