United Arab Emirates: Emiratization Rates Increased for the Private Sector
May 18, 2022
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At a Glance
- The Cabinet of the United Arab Emirates is increasing Emiratization rates in the private sector.
- Specifically, mainland registered private sector employers with more than 50 employees will be required to increase the percent of Emirati employees by a minimum of 2% annually for skilled occupations to reach a goal of 10% Emirati nationals in their workforce by 2026.
- Employers must increase their Emirati workforce by at least 2% for skilled occupations by the end of December 2022 in order to avoid financial penalties.
The situation
The Cabinet of United Arab Emirates is increasing Emiratization rates for mainland registered private sector companies with over 50 employees.
A closer look
- 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.
Impact
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.
Background
- 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.
Looking ahead
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.
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].
