UAE freezones pave the way for financial inclusion with WPS -

UAE freezones pave the way for financial inclusion with WPS

Among the 46 free trade zones (FTZs) in the UAE, DMCC (Dubai Multi Commodities Center) is one of the latest entrants in the list of 13 FTZs to adopt and implement the WPS for firms that are licensed with them. The implementation process involves registering all employees with an active employment visa or a Personal Identity Card (PIC) under every company with salary payments before February 15, 2023.

What is WPS?

The Wages Protected System (WPS) is an electronic salary transfer system introduced in 2009 by the Central Bank of the UAE, to provide a safe, secure, and efficient mechanism to streamline the timely payment of wages to employees via authorised banks, exchange houses, and third-party salary processors.

Furthermore, the WPS system allows the Ministry of Human Resources and Emiratization (MOHRE) to keep a record of private sector salary payments and to identify the employers who might not be paying their staff on time. It is an integral part of the UAE’s labour regulations and was primarily designed to ensure that companies meet their obligations and that the workers’ rights are upheld.

we make wps payroll easy

Why do free trade zones need to implement WPS?

Free trade zones in the UAE are economic areas offering tax concessions and customs duty benefits to investors. They also offer multiple advantages to foreign businesses such as 100% ownership of the enterprise, import and export tax exemptions, confidentiality, assistance with labour recruitment, infrastructure, and sponsorships.

In general, free trade zones do not need to abide by the WPS rules, but zones like Jebel Ali Free Zone (JAFZA) and DMCC have taken the initiative to make WPS mandatory in order to curb any unprincipled practices and to enhance employee welfare. The move is primarily aimed at protecting the employees’ and, to ensure the companies are meeting their obligations of paying their employees in full and on time.

How does this work?

The procedure to register a company is normally very smooth and can be done online through the MOHRE website using the required details of the company. For instance, all companies registered with DMCC, can be set up with their own WPS system by registering through the DMCC portal. Monthly staff salary payments shall be set up through a UAE Central Bank-approved local bank, money exchange or third-party salary processor. Companies then need to ensure that they process their salary and payroll every month through the WPS system, just like mainland companies in the UAE who have been following this WPS process for many years now.

To avoid any penalties, we encourage all companies to comply with the new WPS rules and implement the system at the earliest.

If your business is looking for help with WPS implementation, disbursement of funds, automated payroll, or banking services for your employees, Edenred UAE will be happy to help you and your business to be compliant.

Simplify your payroll with Edenred


Related Articles

How the right payroll platform can help you save time and money
Flexible Working Hours expected in the UAE?
5 Essential Tips for an Effective Payroll and WPS Strategy