20 July 2023
Impact High
Immigration
Summary
The Ministry of Human Resources and Emiratisation (MoHRE) has expanded the scope of the government’s Emiratisation initiative, to now include small-scale companies in certain private sectors in the UAE. Failure of companies to meet new Emiratisation requirements, will be required to pay financial contributions from January 2025. The expansion of Emiratisation forms a part of Vision 2021; to train, recruit and retain Emirati nationals in the private sector.
The Detail
In an effort to bolster the employment of Emirati citizens and promote their active participation in the labour market, the MoHRE has now expanded the scope of Emiratisation rules to include private sector companies and sole establishments in the Mainland jurisdiction with a workforce ranging between 20 to 49 employees.
Currently, the Emiratisation target of 2% is applied to Mainland companies with a workforce of 50 and above, irrespective of their economic sector. These companies are required to increase their Emiratisation rates by 2% at the end of each year, and continue to do so annually, with a 10% Emiratisation target by 2026. However, small scale private companies will be subject to different targets under the latest Emiratisation expansion, compared to those companies employing 50 people or more. Under the recent change, the Emiratisation target for small companies is to hire at least one Emirati national in 2024 and a further Emirati national in 2025.
Affected sectors
The new Emiratisation rules will affect small-scale companies, in the following 14 sectors:
The selected sectors for this expansion have been identified to align with the UAE’s economic development goals and labour market requirements. The MOHRE will shortlist the establishments in these specific economic sectors taking into account various factors, i.e. various types of job roles, job growth and geographical location. The targeted establishments will be contacted by the MoHRE.
What this means
Businesses employing between 20 and 49 people that fail to comply with the new Emiratisation rules and meet the target in 2024, will lead to a ‘yearly financial contribution’ of AED 96,000 in January 2025. This will double to AED 108,000 for those who do not meet the 2025 target, and will be required to pay a financial contribution in January 2026. Falsifying Emiratisation numbers, providing false/inaccurate documents or information with a view to obtain the benefits will incur penalties and legal sanctions imposed by the MoHRE.
Companies falling under the above mentioned sectors, and that are either increasing their workforce in Mainland UAE or are already affected by the new Emiratisation targets, may need to review their hiring strategies to attract and retain Emirati talent in the UAE.
How we can help
We understand that for many small-scale private sector companies, this will require careful workforce planning. We can help to:
Contact us
Should you have further questions on this update, please reach out to:
Anir Chatterji – Partner, Middle East Immigration Leader: anir.chatterji@vialto.com
Rekha Simpson – Director, Middle East Immigration: rekha.simpson@vialto.com
Ananth Prasad – Manager, Middle East Immigration: ananth.prasad@vialto.com
Smit Sagar Kumar – Associate, Middle East Immigration: smit.kumar@vialto.com
Further information on Vialto Partners can be found on our website: www.vialtopartners.com
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