Around 62% of Emiratis report difficulties in securing private sector jobs, with only 7.6% of the UAE workforce being Emirati nationals. In response, the UAE government introduced Emiratisation—a strategic initiative to increase Emirati participation in the workforce. As part of the country’s modernization efforts, the program aims to place 75,000 Emiratis in private sector jobs by 2026.
But what is Emiratisation, and how is it transforming the business landscape? Let’s explore.
What is Emiratisation?
Emiratisation is a UAE government initiative designed to integrate Emiratis into the national workforce. The goal is to boost their presence in both public and private sectors, enhancing their contribution to the economy.
While public sector employment has embraced this mandate, the private sector is now required to follow suit. A recent cabinet decision mandates private companies to hire UAE nationals to fulfill Emiratisation objectives, which are monitored and enforced by the Ministry of Human Resources and Emiratisation (MoHRE).
MoHRE Emiratisation Categories
MoHRE has categorized companies into three tiers based on their Emiratisation compliance:
Category 1: Companies Meeting Emiratisation Targets
- Hire and train at least 500 Emiratis annually
- Increase Emiratisation quotas by three times the target
- Be a small/medium company owned by a UAE national
- Operate in sectors identified by the Council of Ministers
- Qualify as a training and employment center
These companies pay only AED 250 for work permits over two years, with no fees for UAE and GCC employees.
Category 2: Companies with a 2% Emiratisation Quota
Companies in this category meet the 2% Emiratisation quota annually but don’t qualify for Category 1. They comply with labor laws, wage protection, and diversity requirements. They are charged AED 1,200 for work permits over two years.
Category 3: Non-Compliant Companies
Companies failing to meet the 2% quota or violating other labor laws, such as hiring without work permits or submitting false data, fall under Category 3. They face higher penalties and stricter scrutiny.
Emiratisation Impact on UAE Businesses
Emiratisation aims to reduce reliance on expatriate labor, fostering economic sustainability and growth. By promoting a diverse and inclusive workforce, businesses can innovate and thrive while aligning with national development goals.
The program extends to private sector companies with 20 to 49 employees, expanding its reach to include more industries than previous regulations.
Key Sectors Affected by Emiratisation
The following industries are now required to comply with the new Emiratisation rules:
- Information and Communications
- Construction
- Financial and Insurance
- Real Estate
- Healthcare and Social Work
- Education, and more.
Emiratisation Quota for 2024 and Beyond
By 2024, private sector companies with 50 or more employees must have a 6% Emiratisation rate. This quota will increase by 1% every six months, with a final target of 10% by 2026. For smaller businesses (20–49 employees), at least one Emirati must be hired by 2024, and two by the end of 2025.
MoHRE defines skilled workers as those earning at least AED 4,000 per month, possessing relevant certificates, or falling into professional categories like managers, business executives, and technical workers.
Penalties for Non-Compliance
Companies that fail to meet Emiratisation targets face significant fines:
- AED 96,000 for not hiring at least one Emirati by 2024
- AED 108,000 for failing to employ at least two Emiratis by 2025
Non-compliance may result in additional legal action, reputational damage, and even suspension of work permits.
The Importance of Compliance
Complying with Emiratisation regulations is crucial for businesses operating in the UAE. Not only does it help avoid financial penalties, but it also contributes to building a sustainable, inclusive, and innovative workforce that aligns with the country’s long-term economic goals.
Frequently Asked Questions (FAQs) about Emiratisation
What is Emiratisation in the UAE?
Emiratisation is a national policy aimed at increasing the number of Emiratis in the workforce, promoting their participation in both public and private sectors.
What is the Emiratisation quota for 2024?
Companies with 50 or more employees must have a 6% Emiratisation rate by the end of 2024. Smaller companies (20–49 employees) must hire at least one Emirati by the end of the year.
What are the penalties for non-compliance?
Companies face fines starting at AED 96,000 for not hiring the required number of Emiratis in 2024, increasing to AED 108,000 in 2025.
Does Emiratisation apply to free zones?
No, free zone companies are exempt from Emiratisation laws, although they can choose to participate voluntarily.
For expert guidance on navigating Emiratisation regulations or securing your business license, contact Avyanco. We specialize in supporting businesses through every step of the process, ensuring compliance and business success in the UAE.
