Company Classification System Changes, Service Fees and Bank Guarantee Payment Changes Announced

The Ministry of Human Resources and Emiratisation (MOHRE) has announced changes to the company classification system, service fees and bank guarantee payments for companies in the mainland. The following are the most notable amendments that are expected to go into effect on November 30, 2017:

Company Classification System

The MOHRE classification system imposes groups for the purpose of evaluating a company’s compliance with specific UAE standards and regulations, including adhering to cultural diversity, contributing to Emiratisation initiatives and payment of wages.  Companies in the mainland are currently grouped into three categories, 1, 2 and 3, with the second group being divided into sub-categories A, B and C.

The new system will introduce another sub-category, D, however it is not yet clear if, and under what conditions existing companies will be reclassified to this level.

Service Fees

MOHRE will offer lower government fees for skilled workers’ applications and higher fees for employees with limited skills. For most services, the MOHRE will apply fees according to the company category (the higher the category, the lower the fee).

Bank Guarantee

The new law will waive bank guarantees for employers recruiting skilled workers in the second and third categories. Employers recruiting candidates with limited skills will still be subject to a bank guarantee of AED 3,000, unless their company category is 1. Currently, the guarantee is only waived for companies in category 1.

What This Means for Employers and Foreign Nationals

As a result of the changes, employers will see lower government fees and a bank guarantee exemption for skilled workers.

Employers should contact their immigration professional for more information about the new company subcategory, when it becomes available.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].