United Arab Emirates: Emiratization Rates Increased for the Private Sector

• New Emiratization rates. Private sector employers with more than 50 employees will be required to increase their percent of Emirati employees by a minimum of 2% annually for skilled occupations with an expected goal of having at least 10% of their workforce comprised of Emirati nationals by 2026.
• Penalties. Beginning January 2023, the government is expected to fine all non-compliant private sector businesses AED 6,000 per month for every Emirati citizen vacancy that has not been filled.

Employers should ensure that they comply with the new Emiratization rates by the end of December 2022 to avoid monthly fines and to benefit from the newly implemented incentives.

• Nafis program. In 2021, the government of the United Arab Emirates first announced the launch of a federal program, Nafis, to support the training and recruitment of Emirati citizens in the private sector due to their relatively high level of unemployment in this sphere. This new Emiratization regulation is one of the key initiatives of the program.
• Nationalization incentives. In order to encourage the hiring of Emirati citizens, the UAE government is offering various incentives to private companies supporting the hiring and training of Emirati citizens, such as an 80% reduction in service fees by the Ministry of Human Resources and Emiratization. Employers who comply with the new Emiratization rates will be eligible for this reduction.
• Nationalization trends. The introduction of this program is in line with the regional trend of reserving fixed quotas for nationals in the private sector. For example, Saudi Arabia recently increased its Saudization rates for entertainment centers and amusement parks.

It is likely that the UAE government will continue to launch further Emiratization efforts in order to increase the number of Emirati nationals in the private sector as part of the federal program Nafis.