Emiratisation Compliance Part 1: Understanding the New Requirements

Emiratisation is a UAE government initiative that mandates the inclusion of UAE national talent (Emiratis) within the public and private sectors. The Ministry of Human Resources and Emiratisation (MOHRE) has further enhanced its regulatory programme, which now requires increased participation by the private sector to hire Emiratis. The aim is to create more jobs in the private sector, implementing official percentages companies must meet to contribute to the UAE’s Emiratisation goals. The first part of this blog series on Emiratisation discusses the evolution of related requirements and key considerations for affected companies.

According to MOHRE, UAE-based private companies (not registered in a free zone) with 50 or more skilled employees are required to increase their Emiratisation rates by 2% annually, with a goal of reaching a minimum incremental rate of 10% Emiratisation of the skilled workforce by 2026. Companies that fail to increase their Emiritisation rate by the 2% target in 2022 are still required to meet the incremental 2% target by the end of 2023 (meaning 4% of their skilled workforce is to be comprised of Emiratis).

Furthermore, as the target states the requirement as an incremental rate, the MOHRE will only count those Emiratis hired from May 2022 through 31 December 2022 towards the 2% target for 2022. Emiratis hired prior to May of this year will not count towards the incremental 2% target.  

As the 31 December 2022 deadline to meet this Emiratisation requirement quickly approaches, some HR professionals have been caught unaware of the incremental 2%. Not complying with the requirement of hiring Emirati nationals as per the required percentage has significant consequences, such as a financial contribution in lieu of the hire (at a rate of 72,000 AED a year or 6,000 AED a month per individual below the target for the first year), restrictions on processing labour and work permit applications, and, eventually, a downgrade of the company establishment status if not corrected over time.  

This is a sharp turn from the previous requirements, whereby the private sector was encouraged to hire Emirati candidates for any open positions through the Tawteen Gate and other programmes, such as Nafis.

Previous Emiratisation iterations

Since its launch more than a decade ago, Emiratisation has made significant progress in the public sector, but engagement in the private sector has been less consistent—except in certain sectors, such as banking and insurance.

Emiratisation has always been at the forefront of UAE labour regulations for both the private and public sectors. Article 14 of the previous UAE Labour Law of 1980, along with its amendments in 2001, enshrined job rights to Emiratis by ensuring non-UAE nationals were to be given work permits only if a UAE national was unavailable to fulfil the job criteria.

The implementation of the Emiratisation process has also evolved through several iterations, including the strict implementation of specific percentages within desired industries, such as banking (4% incremental target) and insurance (5% incremental target).

More recently, in 2017, a formal labour market test for employers with more than 50 individuals was introduced. Organisations such as Tanmia, Tawteen and Nafis were created with the task of enhancing the competitiveness of Emiratis in the private and public sector workforce. The Nafis Scheme went even further and reinforced the UAE’s aim to reach an Emiratisation quota of 10% as part of the UAE’s “Projects of the 50.” The current Nafis programme aims to bring about the professional education of Emiratis, their benefits and engagement with the private sector under one authority.

What are the new Emiratisation requirements?

In June 2022, the MOHRE published Ministerial resolution No. 279 of 2022, which defined the new Emiratisation requirement in the private sector.

As discussed above, affected employers must increase their current Emiratisation rate in skilled positions by 2% increments annually until 2026. Therefore, with the incremental requirement each year, the minimum Emiratisation rate the companies are expected to reach over the five-year period are:

So, what is the Emiratisation rate? Translated to a mathematical formula, a company’s Emiratisation Rate can be calculated as:

Emiratisation Rate =

Total Number of Skilled Nationals in the Establishment
Total Number of Skilled Employees

In calculating, it is important to note that the authorities will round up the number of Emiratis required if the results are fractions.  

Using the 2% 2022 target as an example, the Emiratisation rate is calculated after considering the number of Emirati workers in relation to the total number of skilled employees, ensuring that at least one Emirati national is employed for every 50 skilled employees, as indicated below:

While the 2022 Emiratisation rate was calculated annually, as we progress through 2023 to 2026, the Emiratisation rate will be automatically calculated on a monthly basis, with companies having to maintain those minimum percentages for each year mentioned earlier throughout.

If for any reason a company falls below the Emiratisation rate, even if it is due to an Emirati worker exiting the organisation, they are obligated to replace the UAE national within two months of the person's departure to prevent consequences. Therefore, planning and constant vigilance is required to become and remain compliant with Emiratisation rules.

Need to know more?

Please look out for part two of this blog series next week, which will delve deeper into the specifics of the Emiritisation calculation.

For further information and advice on this topic, please contact Immigration Manager Shoaib Khaleeli at [email protected]. This blog was published on 29 December 2022, and due to the circumstances, there are frequent changes.

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