United Arab Emirates: Emiratization Requirements Expanded to Smaller Employers
July 12, 2023
Country / Territory
Share
At a Glance
- The Ministry of Human Resources and Emiratization announced that effective January 1, 2024, companies with 20-49 employees operating in select economic sectors will be subject to Emiratization requirements.
- Currently, only employers with 50 workers or more, regardless of the economic sector, are subject to specific Emiratization ratios.
The situation
The Ministry of Human Resources and Emiratization (MOHRE) has announced that effective January 1, 2024, companies with 20-49 employees operating in 14 key economic sectors will be subject to Emiratization requirements.
A closer look
The affected sectors are:
- information and communications;
- financial and insurance activities;
- real estate;
- professional and technical activities;
- administrative and support services;
- arts and entertainment;
- mining and quarrying;
- transformative industries;
- education;
- healthcare and social work
- construction;
- wholesale and retail;
- transportation and warehousing; and
- hospitality and residency services.
According to the announcement, affected employers will have to hire at least one Emirati national in 2024 and another one in 2025.
It is unclear if this requirement will apply automatically to all companies that meet the criteria of the headcount and sector, or if this will depend on the significance of the sector to the UAE economy at a given time, geographical location, and other economic indicators. The announcement is silent on whether employers in free zones will be affected by the new rule.
Impact
Employers who fail to comply with the new requirement will be subject to monthly fees for each vacancy that has not been filled with an Emirati worker, which will be up to AED 96,000 in 2025, and AED 108,000 in 2026.
Background
In 2022, MOHRE introduced a regulation which requires private sector employers with 50 employees or more to increase the number 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.
Looking ahead
Employers should monitor the developments of the UAE Emiratization program and pay attention to any notifications or instructions from the MOHRE which may require them to comply with the new regulation.
Employers are also advised to register with the UAE government partnership program, Nafis, and consider the initiatives in place to support companies seeking eligible Emirati citizen job candidates.
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].
