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UAE Announces Major Reform in Emiratisation Rules 

Sep 14, 2023 / Haroon Juma / HR & Payroll Blogs

Emiratisation Rules

On July 11, the Ministry of Human Resources and Emiratisation (MoHRE) announced a new update to the rules and a major expansion of the UAE’s Emiratisation Drive.  

Previously, only private companies with 50 or more employees were subject to Emiratisation rules. Those businesses in free zones were exempt from the ruling.  

The Emiratisation rate is based on the number of skilled workers in the company. The MoHRE states that for companies with more than 20 employees but fewer than 50, one Emirati must be on staff in a skilled position by January 1, 2024, while another must be employed by January 1, 2025. 

What would constitute skilled workers? 

MOHRE defines “skilled workers” as an employee who satisfy any of the following qualifications: 

  1. Belong to any of the below five worker categories: 

Managers, Legislators, and Business Executives 

Professionals in scientific technical, and human fields; 

Technicians in scientific, technical, and humanitarian fields; 

Writing professionals; 

Service and sales occupations.

2. Possess a certificate higher than the secondary or equivalent to secondary;

3. Possess a worker certificate attested by a competent authority;

4. Receives a monthly salary of no less than AED 4,000 per month; 

The aim is to ensure that by 2026, 10% of the workforce in the private sector are Emirati nationals. 

Emiratization target depends on the company size, the rate is calculated as follows:

1. 0-50 skilled workers – minimum to have hired 1 Emirati;

2. 51-100 skilled workers – minimum to have hired atleast 2 Emiratis;

3. 101-150 skilled workers – minimum to have hired three UAE nationality employees;

4. More than 151 skilled workers – 1 Emirati for every 50 workers or less. 

Those failing to hire an Emirati citizen as mandated will be subject to a fine of AED 96,000 in 2024. The penalty increases to AED 108,000 for the subsequent year, 2025.

The new rules now apply to companies across 14 economic sectors, which are the following: 

14 Economic Sectors

Information and communications  Transformative industries 
Financial and insurance activities  Education 
Property  Health care and social work 
Professional and technical activities  Construction 
Administrative and support services  Wholesale and retail 
Arts and entertainment  Transport and warehousing 
Mining and quarrying  Hospitality and residency services 

   **Please refer to appendix for supplementary information. 

The law includes several exemptions from the Emiratisation requirements. These exemptions encompass companies situated in free zones, companies engaged in specific activities, and companies facing challenges in finding suitably qualified Emirati employees. 

Taking measures like  

  1. reducing the numbers of employees under employment (e.g. transferring several employees from one entity into another) or  
  2. reclassifying workers from skilled to unskilled to avoid paying fines for not fulfilling the quota is not advisable.  

Employers should be mindful that any attempt to circumvent the Emiratisation requirements risks penalties being imposed. Fines start at AED 100,000 increasing to AED 500,000 for a third offense. 

To ultimately avoid fines and penalties, it is imperative that companies in the UAE monitor the situation and keep up to date with developments. We ask you to please be guided accordingly. 

14 Economic Sectors With Indicative Examples

Information and communications  Telecommunications
Computer, AI, and IT Services
Satellite Systems
Broadcasting and Media Companies
Publishing Houses
Motion Picture Theatres
Libraries & Archives 
Financial and insurance activities  Banks
Insurance Companies
Investment Companies
Consumer Finance Companies
Real Estate Investment Trusts
Property  Real Estate
Property, Home, and Office Leasing
Property Management Companies
Real Estate Brokerage 
Professional and technical activities 

Legal / Law Firms
Accounting, Bookkeeping and Auditing Activities; Tax Consultancy
Management consultancy
Architectural, Engineering, and Related Services  

Consulting Services
Technical Testing and Analysis
Advertising and Related Services
Market Research and Public Opinion Polling 

Administrative and support services  Employment, Recruitment, and Manpower Agencies
Outsourcing Companies
PRO Services
Commercial Cleaning Companies
Call Centres
Gardening Services
Pest Control 
Mining and quarrying  Mining Companies 
Transformative industries  Technology Innovators
Construction  Building Contractors / Developers
Arts and entertainment  Performing Artist Groups
Exhibition Organizer & Companies
Production House
Cultural Museums
Historical Sites
Recreation Facility
Arcades, Theme Parks and Attractions
Zoos and Botanical Gardens
Performing & Visual Arts
Gaming and Animation
Sports Teams & Clubs
Golf Courses and Country Clubs 
Education  Schools/ Service Providers
Supplemental Education Service Providers
Educational Products & Publishing Sector
Education Support Services Sector 
Health care and social work  General Medical and Surgical Hospitals
Healthcare Clinics
Nursing Facilities
Retirement Homes
Home health care services
Wellness Centre
Medical Equipment and Drug Manufacturers
Pharmaceuticals & Biotechnology Companies 
Wholesale and retail  Wholesalers
Supermarkets and Hypermarkets
Department and General Merchandise Stores
Pharmacies and Healthcare Stores
Gasoline Stations
Motor Vehicles and Part Dealers
Convenience Stores
Sporting Goods, Hobby, Musical Instrument, and Book Stores 
Transport and warehousing  Car and Bus Rentals
Air and Cruise Lines
Warehousing and Logistics Companies
Cargo Shipping Companies
Courier Services 
Hospitality and residency services  Hotels, Resorts & Casino
Travel and Tourism Agencies
Meeting and Event Management Companies
Salon & Spas
Pet Care and Services 

**Companies should seek advice and confirmation as to the applicability to their business 

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