DO you know what Emiratisation is?
The UAE government took an initiative that aims at increasing the employment opportunities for UAE nationals across various industries in private sector. The end target is to eventually increase UAE’s manpower by empowering Emirates with skills and knowledge.
Through Emiratisation, the UAE government envisions to train Emiratis to ensure their participation in various sectors, and create more employment opportunities in which they can serve. The Emiratisation law program varies from company to company according to its size and its niche.
In this article we will explain you what does that law bring to the table. This legislation also uses rewards, subsidies and penalties to achieve its goals. Also, we will discuss how much money do Emiratis get from the government.
New Changes in the Emiratisation Law 2023 For Businesses
There have been a lot of significant changes in the UAE Emiratisation Law. We are listing them here:
- One of them is the new quota system for Emirati Employers in the private sector. It requires all the employers, companies and organizations to hire UAE nations according to a certain percentage which is 2% to 60% based on their size and business activity.
- Introduction of a new Emiratisation Certificate is yet another change that endorses that a company complies and follows the Emiratisation Law in UAE. This certificate is necessary to keep for all private companies and businesses in UAE and every year it must be renewed.
- Businesses will face penalties for not obtaining or renewing the certificate. These penalties include operational suspension, fines, or trade license cancellation, or elimination from government contracts.
- The Emiratisation Law 2023 also introduces new incentives for business set up in Abu Dhabi or the UAE that exceed their quota or hire nationals in high-demand occupations.
These incentives include tax law exemptions, subsidies, preferential treatment in government tenders, and access to training and development programs.
This is also why more employers living in the UAE are starting to see the benefits of Emirati citizenship. Therefore, they look for legal ways to stay in the country as a citizen.
Sectors Affected by the Emiratisation Law?
The new Emiratisation rule, regardless of legal status or ownership, is applied to all businesses of private sector in the UAE. However, some sectors of the private sectors have more Emirati quota system than others. The sectors with the highest quota are:
- Banking and financial services
- Insurance
- Trade
- Industry
- Construction
- Hospitality
- Education
- Health
However, the sectors with the lowest quota are:
- Agriculture
- Oil and gas
- Transport
- Media
The Emiratisation Law in UAE also identifies some occupations that are reserved for citizens only. These include:
- Human resources managers
- Public relations officers
- Administrative assistants
- Receptionists
- Security guards
- Drivers
Workforce Requirements for Private Sector in UAE
Well, there are many workforce requirements that the Emiratisation law provides. We are listing few of them:
Private sector companies and organizations must hire at least 10% of workforce that are Emirati or UAE nationals according to the UAE Emiratisation Law.
Moreover, the law requires companies to aim to increase their Emirati National Workforce by 20% by the end of 2024.
All UAE private companies of all sizes, or industries, must be abiding by this law except the companies that MOHRE has exempted.
By Emiratisation Law, Emirati employee’s salary must be of AED 5,000/month.
Emiratis must be trained and their skills must be developed for more opportunities.
Penalties and fines will be imposed on all Emirati employers who fail to meet these requirements. These penalties may include cash fines of AED 10,000 to AED 50,000, work permit cancellation, or business operation suspension.
Criteria Of MOHRE For Employees Hiring
MOHRE’s criteria for the Emiratisation Law implementation in the private sector for hiring employees include:
- Employers must first advertise the vacancy on the MOHRE portal and give priority to Emirati candidates. Those who meet the qualifications and experience required for the job.
- The employer must conduct a fair and transparent recruitment process. Therefore, select the most suitable candidate based on merit and competence.
- Employers must obtain a work permit from MOHRE for the selected candidate and submit the necessary documents and fees.
- The employer must register the employee in the MOHRE database. Furthermore, issue a contract that complies with the UAE Labour Law and the new Emiratisation rule.
Benefits of Emiratisation for Businesses
Emiratisation in the private sector is really beneficial for the UAE economy and UAE nationals, and also has other benefits like:
- Accessing a pool of talented, skilled and qualified candidates who can bring different skills. Such as, local knowledge, cultural awareness and linguistic diversity to the workplace.
- Enhancing the reputation and image of the business as a socially responsible and patriotic entity that supports the UAE’s vision and values.
- Reducing the reliance on expatriate workers and the costs. Those payments associated with their recruitment, visa, health insurance and end-of-service benefits.
- Improving the retention and loyalty of Emirati employees who tend to stay longer in their jobs than expatriates, especially if they receive adequate training, development and career progression opportunities.
- Receiving financial incentives and subsidies from the government for meeting or exceeding the Emiratisation targets, as well as avoiding fines and penalties for non-compliance.
Advantages of the NAFIS Scheme
NAFIS Scheme refers to one of the most comprehensive and recent programs to boost Emiratisation. NAFIS is actually an Emirati Talent Competitiveness program announced in September 2021. It is a part of the “Projects of the 50” on UAE’s 50th anniversary.
Through NAFIS scheme, UAE aims to empower Emiratis by creating 75,000 new employment opportunities by 2025 in the UAE’s private sector. The NAFIS initiatives include innovative policies such as:
- Providing subsidies for employers who hire Emiratis, ranging from AED 5,000 to AED 30,000 per month per employee, depending on their skill level and salary.
- Offering training programs for Emiratis to enhance their skills and competencies in high-demand sectors. Such as, technology, health care, education, finance and tourism.
- Establishing a national database of Emirati job seekers and vacancies in the private sector to facilitate matching and placement.Introducing a flexible work system that allows Emiratis to work remotely or part-time in the private sector while retaining their benefits in the public sector.
- Creating a career guidance platform that provides Emiratis with information and advice on various career paths and opportunities in the private sector.
Access to Government Contracts
Government contracts are one of the significant incentives that the private sector companies get for for hiring more Emiratis. The Emirati quota meeting is mandatory for private sector to be eligible and take part in bidding on government contracts and public projects.
The actual Emirati Nationals required in the private company will be calculated according to the overall proficient employees in the company.
Companies that fail to comply with these requirements will face penalties such as:
- Paying a contribution fee of AED 300 per month per employee for each percentage point below the target.
- Being excluded from government tenders and contracts until they meet the target.
- Having their work permits suspended or cancelled until they meet the target.
On the other hand, companies that exceed the target will be rewarded with Emiratisation benefits such as:
- Receiving priority in government tenders and contracts.
- Getting discounts on fees and charges related to work permits, visas and labour cards.
- Being recognized as members of the Tawteen Partners Club, a prestigious network of private sector companies that support Emiratisation.
Long-term Sustainability
Emiratisation goal is ultimately attaining the sustainability of the UAE’s economy and get competitive with the evolving needs. It is done by increasing the workforce in UAE’s private sector and aims to:
- Diversify its income sources away from oil and gas revenues.
- Reduce its dependence on foreign labour and enhance its self-reliance.
- Develop its human capital and nurture its innovation potential.
- Preserve its national identity and culture while embracing globalization.
Penalties for Failure to Comply
MOHRE in September 2022 issued a new Emiratisation Decision that requires 50 or more than 50 employees’ private companies to hire 2% UAE nationals every year. They are also given the target of 10% Emirati workforce in 2026.
The decision also imposes contributions on non-compliant establishments. These contributions come into calculation with basis on the difference between the actual number of Emirati employees and the required number of Emirati employees. The contributions start from AED 300 and go up to AED 5000/ month for Emirati employee that is missing. Again, the contribution all depends on the level of skills and the company’s size.
The compliance of the companies of private sector is monitored by MOHRE. It is done through its online portal by evaluating the company’s Emiratisation targets. MOHRE requires companies to submit their data and documents on their portal every quarter and audits and inspections are conducted by MOHRE to verify the data and documentation accuracy.
Conclusion
The Emiratisation program is rewarding for the private companies because UAE government also provides compensations and benefits to the companies that support Emiratisation Law to create employment opportunities for UAE citizens and let UAE nationals participate in the evolving economic landscape.
However, if you need more information about the Emiratisation Law, you can contact us today.
