AHR Corporate Services | Updates

UAE Emiratisation Regulation

Recently, following the introduction of the new UAE Federal Labour Law on 2nd February 2022, the Ministry of Human Resources and Emiratisation (MOHRE) issued a new Ministerial Decision in relation to Emiratisation in the UAE.

The UAE Cabinet has adopted resolutions and incentives to enhance the participation of Emirati Nationals in the private sector which come within NAFIS, the federal program that aims to increase the competitiveness of the Emirati workforce and to facilitate the private sector employment of UAE citizens.

The incentives include reducing the service fees of the Ministry of Human Resources and Emiratisation by 80% for private sector establishments, which accomplish major milestones in terms of the recruitment and training of Emirati citizens.

The Cabinet approved increasing the Emiratisation rate to 2% annually from high-skilled jobs in establishments that employ 50 workers or more which aims at creating more than 12,000 job opportunities annually for citizens in all economic sectors.

Non-compliant companies will have to pay an amount of AED 6,000 monthly, starting from January 2023, for every citizen who has not been employed.

In 2023, establishments employing more than 50 workers are obliged to increase their current Emiratisation rate by 2%, annually thereafter gradually raising the rate annually by 2%-  to a total of 10% by 2026.

How is the Emiratization rate calculated?

Who are considered skilled workers?

• Employees who are at the professional skill level 1 to 5;
• Employees who have certificates higher than a secondary certificate- or an equivalent certificate, attested by the competent authorities in the UAE;
• Employees with a monthly salary (excluding commission) of over AED 4,000.

What are the penalties for non-compliance?

Companies that fail to fulfil the requirements of the Emiratization will bear the below penalties: 

• A monthly fine of AED 6,000 per month in lieu of each Emirati employee not hired as of January 2023 (AED 72,000 per year) until compliant.

• This monthly fine shall progressively increase by AED 1,000 each year (AED 7,000 in 2024, AED 8,000 in 2025 etc.) until compliant.

Failure to pay the sanctioned fees can lead to a temporary block of the company’s MOHRE account, suspending the issuance of new work permits, employment visas, renewals etc.

Failure to comply with the Emiratization requirement for 2 consecutive years can result to a down-grade in the company’s rank (under the UAE classification law), which can result in higher employment visa costs for future employees.

If you have any questions on the new Emiratisation Regulations in the UAE and how it may affect your business, please reach out to us and one of our team will be in touch to discuss this further.

E: visasupport@ahr-corporate.com