Comprehensive Guide about Emiratisation Program in UAE

Comprehensive Guide about Emiratisation Program in UAE

 

The UAE has a vision of building a competitive knowledge economy. This has to be according to the talent and innovation of its citizens. To achieve this objective currently, there is the Emiratisation program. This program consists of reforms and financial incentives to boost job opportunities for young and experienced Emiratis in the private sector.

In this article, we will explain everything you need to know about the Emiratisation program. Specifically, we will explain to you what it is, what its objectives are, how it is implemented, and Why is Emiratization important. In addition, the benefits they have for Emiratis and companies. The challenges and opportunities this presents will also be taken into account. Finally, we will give you some useful resources so you can access the program and take advantage of its advantages. Keep reading and discover how the Emiratisation Law 2023 can transform the labor market in the United Arab Emirates.

What is Emiratisation Program?

If you want to enter the business world in the UAE, you should know what is Emiratisation program in UAE is. Therefore, Emiratization is an initiative by the UAE government that has existed for more than a decade. In this way, its objective is to increase the employment of Emirati citizens in the private sector and the public sector.

The UAE government is working hard to increase the number of Emirati citizens in companies. In this way, the Emiratisation program in the UAE is expected to reduce the country’s dependence on expatriate workers. In addition, it seeks to promote the economic participation of the Emirates and their development.

Thanks to this policy, there was a significant change in employment patterns. In this way, organizations make an effort to create a workplace that is inclusive and values ​​the talents and skills of Emirati nationals. In addition, the government set specific objectives for Emiratization in different sectors such as banking and finance, telecommunications, etc.

The Requirements of Emiratisation Program in UAE

There are still questions to answer and one is, how does Emiratization work? However, first, you must know the requirements for the Emiratisation program in UAE. First of all, you should know that the regulations that govern the Emiratisation law are Ministerial Decision number 279 of the year 2022, Cabinet Decision number 18 of the year 2022, and other regulations that govern these benefits under the Nafis plan.

Those employers who have more than 50 employees must annually increase their Emiratization rate by $2 of the total number of qualified workers. In addition, as of January 2023, and as required by the 2% Emiratization law; All private sector companies must follow this scheme:

  • 50 qualified workers: The minimum goal is to hire a UAE national employee.
  • From 51 to 100 workers: The minimum goal is to hire 2 UAE national employees.
  • 101 to 150 workers: The minimum goal is to hire 3 UAE national employees.
  • More than 151 workers: One UAE national employee must be hired for every 50 workers the company has.

This law applies to the private sector and more specifically to those companies that are registered in the mainland UAE. Therefore, those companies that are in free zones will not be obliged to apply these laws. However, they will be free to contribute to the full objectives of the law if these companies find an Emirati talent who is suitable for their organization.

The Impact of Updated Emiratisation Rules on UAE Businesses

The Ministry of Human Resources and Emiratization or MoHRE of the UAE, announced an expansion of private sector companies that are subject to the Emiratization objectives. In this way, expansion refers to companies that have between 20 and 49 employees. This expansion indicates that these companies are subject to the Emiratization objectives.

The rules previously only applied to those private sector companies that had more than 50 employees. The benefits of the Emiratisation program are very important for the UAE government.

Therefore, to increase the number of Emirates in certain positions; Small companies in 14 sectors must hire at least one Emirati by 2024 and another by 2025. In addition, companies that do not hire an Emirati in 2024 will receive a fine of 96,000 dirhams. This can increase to 108,000 dirhams for companies that do not hire two Emirates by 2025.

What is the Purpose of Emiratisation Program in UAE?

The main objective of the Emiratisation program is to get more Emiratis into the workforce. Especially in the private sector since in the public sector, there are enough Emiratis. With this new policy, there is currently a significant change in employment patterns. In other words, organizations strive to create an inclusive workplace. Thus, the diverse talents and skills of Emirati nationals can be valued.

Currently, there are effective objectives for the Emiratisation rule in various sectors. For example, banking, finance, human resources, telecommunications and hospitality. Furthermore, to promote the Emiratisation program, there are several initiatives by the government. The idea is also to support job seekers who are Emirati citizens.

For instance, the Emirati Youth Empowerment program. The main function of this is to provide training and employment opportunities for young Emiratis. In addition, there are programs to support Emirati entrepreneurs. For instance, Mohammed Bin Rashid establishment for SME development. This provides financing and administrative support services for small and medium-sized Emirati-owned businesses.

Thanks to the Emiratisation program there is a strategic shift towards a foreign and Emirati workforce. That is, promoting the inclusion of citizens in the UAE in various areas to create a sustainable future for the country’s economy. Furthermore, it has a positive impact on society by increasing the appreciation of the diverse talents and skills of Emiratis. However, you have to know that implementing the Emiratisation program is a constant challenge.

In summary, the main objective of the Emiratisation program is to create a supportive work environment for Emiratis. In addition, providing training and development opportunities and offering attractive benefits and compensation.

UAE Announces Major Changes in Emiratisation Program In 2023

In 2023, the Ministry of Human Resources and Emiratization (MOHRE) in the UAE released new rules on the Emiratization program. Especially, for small businesses that are currently in the UAE. Private sector companies that have between 20 and 49 employees have to hire at least one Emirati in 2024. In addition, they have to hire another by 2025. That is, by 2025 companies have to have at least two citizens.

Previously, only companies with 50 or more employees had to comply with the Emiratisation programme.

On the other hand, this new requirement only applies to 14 economic sectors, which are as follows.

  • Financial and insurance activities.
  • Information and communications.
  • Real estate
  • Technical and professional activities.
  • Support and administration services.
  • Entertainment and art.
  • Mines and quarries
  • Manufacturing industries.
  • Social work and healthcare
  • Retail and wholesale.
  • Storage and transportation.
  • Residence and hospitality services.

Failure to comply with the new Emiratisation program rules may result in a fine. The value of this fine is currently AED 96,000. On the other hand, by 2025 this fine will be worth AED 108,000 for companies that do not have two local citizens.

This is an important advance by the Nafis Program of the UAE. Its purpose is to train nationals in the UAE to occupy important jobs in the private sector. The Nafis program has been in the country since 2021 as part of the 50 in the UAE projects. Specifically, to support the Emiratisation program and local citizens.

Skilled workers Criteria

According to the Ministry of Human Resources and Emiratization (MOHRE), there are criteria for qualified workers. Any employee must meet any of the following criteria:

  • Have a secondary education degree. Failing that, some degree that is equivalent to this education.
  • Have an employee certification that must be legalized by the competent authority.
  • The employee must have a minimum salary of AED 4,000 per month.

Finally, it has to be under one of the following categories:

  • Executives, legislators, and company managers.
  • Writing or editorial professionals.
  • Professions in the scientific, technical, and human fields.
  • Sales and service occupations.

Penalties for non-compliance

When companies do not comply with the objectives of the Emiratisation program, they have to pay heavy fines as you see below:

  • A fine of 6,000 Dirhams per month for each Emirati employee missing from the company.
  • A minimum fine of AED 20,000 and a maximum fine of AED 100,000 may be applied in the following scenarios.
  • When obtaining a work permit, a company does not have a UAE national; but he continues to receive support from Nafis.
  • Employees who benefit from the Nafis program show a lack of dedication to their jobs. Furthermore, if the company does not inform Nafis.
  • The employees who benefit from the program do not go to work and the company does not communicate this to Nafis.
  • If the company counts on a worker’s benefits without giving a legitimate explanation and without notifying Nafis.
  • If the company refuses to comply with the Emiratisation program after completing your training, without giving a legitimate explanation.

By not paying the fines for not complying with the Emiratisation program, you have to face suspension from the company. Specifically, in regards to the company’s ability to renew or apply for work permits. When dismissing a local citizen in the UAE, employers in both the public and commercial sectors have to consider the potential penalties and financial repercussions.

Conclusion

You already know more about what is Emiratisation in UAE and how it aims to encourage the hiring of Emirati citizens. In this way, the aim is to reduce the country’s dependence on expatriate labor and considerably improve employment opportunities for Emirati citizens.

Furthermore, the program has been implemented in different stages since 1998. This has been a resounding success in creating employment for UAE citizens. In 2023, the government launched an initiative called Nafis that seeks to further promote this Emiratisation program.

Therefore, the Emiratization program seeks to generate more growth opportunities for UAE citizens. In addition, it allows them to obtain more opportunities in both the public and private sectors. In this way, job opportunities are boosted for young people and all experienced Emirates.

If you want to start your Emiratisation process, get in touch with us! Give us a call at +971 4331 6688 or send us an email at contact@emiratisationgate.org.

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