In recent years, the UAE has been actively working on policies and regulations to enhance the role of its nationals in the private sector, a movement popularly known as “Emiratisation.” These new laws and initiatives have been designed to create a more inclusive and prosperous environment for Emiratis in the job market.
Now, the UAE has ushered in new Emiratisation rules for the private sector. These rules, specifically Ministerial Decision No. 279 of 2022, require private sector companies with more than 50 employees to recruit 2% Emirati employees per year. So, in this blog, ‘Empowering Nationals: Emiratisation rules in UAE: New laws for Private Sector’, we’ll discuss the latest developments in UAE regarding Emiratisation and new laws for the private sector that are essential for company formation in Dubai.
Impact of Emiratisation on UAE Businesses
Companies that fall under the jurisdiction of the Ministry of Human Resources & Emiratisation (MOHRE) have to compulsorily follow the new Emiratisation laws. Specifically, companies with a workforce of 50 employees or more must ensure that at least 2% of their staff are Emirati nationals. These Emiratisation laws will be enforced throughout the UAE mainland, except for specific free zones such as DIFC and ADGM.
The ‘Nafis’ Council, also known as the Emirati Human Resources Competitiveness Council, is responsible for executing national programs that focus on boosting Emiratisation in the private sector. The council’s mission revolves around enhancing the competitiveness of Emirati nationals in the private sector while equipping this sector with local talents. Over the next five years, the council aims to facilitate the integration of 75,000 Emirati citizens into the private sector.
This applies to companies that operate within the following 14 sectors:
- Information and communications
- Financial and insurance activities
- Real estate activities
- Professional, scientific, and technical activities
- Administrative and support services
- Education
- Healthcare and social work activities
- Arts and Entertainment
- Mining and quarrying industry
- Manufacturing
- Construction
- Wholesale and retail trade
- Transportation and warehousing
- Hospitality services.
Requirement of the 2% Emiratisation Law in UAE
The Emiratisation rule outlines that If a company has 50 employees or fewer, they are required to include at least one Emirati national in their workforce. For companies with 51 to 100 employees, the rule stipulates the need for two Emiratis on their payroll.
Companies can calculate their Emiratisation rate in relation to the number of skilled workers in the company.
- 50 skilled workers: minimum 1 Emirati employee
- 51-100 skilled workers: minimum 2 Emirati employees
- 101-150 skilled workers: minimum 3 Emirati employees
- 151 & above: One Emirati employee for every 50 or fewer workers
Also, MOHRE defines skilled workers as employees who are :
- Legislators, managers, business executives
- Professionals in scientific, technical & humanitarian fields
- Technicians in scientific, technical, and humanitarian fields
- Writing professionals
- Service & sales occupations
- Having a secondary school certificate is equal to or higher
- Relevant authority attested worker’s certificate
Rules for advertising for Emiratisation jobs
When advertising for Emiratisation jobs, Companies should not:
- Post unskilled jobs or misleading advertisements that do not represent the available and genuine job opportunities for them.
- Cite the government’s Emiratisation policies and their benefits without prior permission from MoHRE.
- Give information on the government incentives and support programs offered to nationals in the private sector.
Penalties and fines for bypassing Emiratisation targets
Companies that fail to meet the requirements of the Emiratisation, programme will result in penalties and fines including
- A fine of AED 100,000 for companies that fail to meet the Emiratisation targets for the first time.
- A fine of AED 300,000 If a company violates the Emiratisation targets again.
- The penalty will be raised to AED 500,000 for the third or subsequent violation.
- If a company fails to comply with the Emiratisation quota for two consecutive years, it will be demoted to the third category.
The Nafis Award
The Nafis Award is presented to private-sector businesses that stand out in their commitment to hiring UAE nationals. It also recognizes skilled Emirati individuals in the private sector, highlighting their significant contributions across different economic sectors.
It was launched under the patronage of H.H. Sheikh Mansour bin Zayed Al Nahyan and is supervised by the Emirati Talent Competitiveness Council in partnership with the Nafis program. The Nafis program was initiated in September 2021 by the Council as part of “Projects of the 50” to achieve the UAE Centennial 2071 vision.
Stay Updated with Damaar Business Consultancy
With the influx of businesses opening in the UAE, staying updated on the latest regulations and trends is crucial. Damaar Business Consultants, as one of the UAE’s leading business setup consultants, is your trusted partner in navigating the ever-evolving business landscape. Our team of experts is dedicated to ensuring you’re always well-informed. We provide valuable insights and guidance on the latest regulations, market shifts, and UAE National Sponsorship Services in Dubai. Keeping pace with the UAE’s dynamic business environment can be challenging, but with Damaar by your side, you can confidently adapt and thrive.
