Emiratisation is an initiative introduced by the UAE government to promote the employment of UAE nationals within the private sector. The current Emiratisation quotas are:
The Emiratisation quotas are heavily enforced for the banking and insurance sectors; however, the quotas for other commercial entities were not enforced.
The Ministry of Human Resources and Emiratisation (MOHRE) issued a new Ministerial Decision (Ministerial Decision No. 279 of 2022) in relation to Emiratisation in the UAE, following the introduction of the UAE Federal Labour Law (Federal Decree Law No. 33 of 2021) together with UAE Cabinet Resolution No.1 of 2022.
We summarise the new Emiratisation requirements in this article.
The new Emiratisation requirements will take effect from 1 January 2023 and applies to all employers that fall under the jurisdiction of the MOHRE (ie those companies based onshore (mainland UAE)). The requirements will not not apply to companies that are based in free zones.
Private sector companies with 50 or more employees will be required to increase their UAE national workforce by 2% per year. The Emiratisation quota is to be calculated by reference to the number of skilled workers in the company:
|Number of skilled workers
|Minimum target for recruitment of national employees
151 or above
One national for every 50 workers (or less than 50)
The aim of the Emiratisation requirements is to ensure that the private sector workforce comprises a minimum of 10% UAE nationals by 2026.
There are separate Emiratisation quotas for the banking and insurance sectors; the quotas will remain at 4% and 5% respectively.
An employee is classified as a skilled worker if the following conditions are met:
The MOHRE will categories companies into three tiers to incentivise compliance with the Emiratisation requirements as follows.
To fall under this category (1), companies need to achieve at least one of the following objectives:
|MOHRE will set work permit fees at a maximum of AED 250 for two years. The employment of UAE/GCC nationals will be exempt from these fees.
Companies that do not meet the above category (1), but which nevertheless meet the Emiratisation quota of 2% per year will fall under this category (2).
MOHRE will set work permit fees for employers that fall in this category (2) at AED 1,200 for two years. The employment of UAE/GCC nationals will be exempt from these fees.
Establishments that do not meet the Emiratisation quota.
For companies that fall under category (3), a fine of AED 6,000 per month in respect of each UAE national not hired will be imposed. This fine will be increased on an annual basis by AED 1,000 per month.
The new Emiratisation requirements were authorised as part of the NAFIS programme, which is a government programme designed to increase the number of UAE nationals in the private sector. It is mandatory for all MOHRE registered companies to ensure that they are enrolled with NAFIS. NAFIS also operates a recruitment portal with the aim of connecting job applicants with companies, therefore, assisting companies in sourcing UAE nationals.
The NAFIS scheme offers a number of benefits to those employers/UAE nationals that are registered, including reduced employer pension contributions for UAE nationals and salary contribution of up to AED 8,000 per month for each UAE nationals hired under the scheme.
The new Emiratisation requirements take effect on 1 January 2023 and the imposition of penalties for those companies that are not compliant with the requirements will start on the same date. Therefore it is imperative that all companies that are required to adhere to the new Emiratisation requirements take prompt action to ensure that they are meeting the Emiratisation targets by 1 January 2023.
If you have any questions on the Emiratisation rules, please do not hesitate to contact Kristina Broci.