United Arab Emirates: Demographic Diversification Rules Reinstated for Mainland-based Employers

Update - January 30, 2024: The government has temporarily postponed enforcement of the demographic diversification rule. The requirement may be reinstated with amendments in the future. We will continue to monitor the situation.

January 19, 2024: The United Arab Emirates has reinstated a demographic diversification rule requiring companies on the mainland to maintain a range of nationalities in their workforce. Although specific nationality ratios have not been officially announced, the Ministry of Human Resources and Emiratization has stated that companies must currently allocate 20 percent of their available work permit quota to nationalities that are underrepresented in their workforce. This policy, which may undergo further changes in the near future, does not affect employers in the free zones. Employers that do not comply with these rules may not have future foreign national work permit applications approved until an adequate diversification balance has been reached. Furthermore, they may be classified as ‘category 3’ on the country’s company classification scheme (the lowest category on the scheme) – which results in higher government fees for recruiting foreign workers and slower government processing times. Affected employers are advised to review their workforce composition and prepare a long-term strategy regarding foreign worker recruitment. Additionally, these rules may have a significant effect on foreign nationals seeking to change employers in country as these individuals are required to cancel their existing work permit (with their current employer) but then may find themselves unable to obtain a work permit from their new employer if the employer does not meet diversification requirements. Depending on the individual’s allotted grace period for obtaining a new work permit, the individual could end up out-of-status if the delays persist long enough.