Complete Guide to Emiratisation Rules 2023: Boosting UAE's Workforce and Economy
Introduction: Emiratisation Rules and Their Impact on Investors and Entrepreneurs
Emiratisation in the UAE refers to a government policy aimed at elevating the number of Emirati citizens employed in both public and private sectors. By addressing concerns about the dominance of expatriate workers and creating more opportunities for Emiratis, this law strives to enhance the local contribution to the national economy.
Emiratisation Implementation Across Various Sectors
Emiratisation has been implemented across multiple sectors, particularly in finance, hospitality, retail, and healthcare. Companies meeting Emiratisation targets can enjoy benefits such as reduced license fees and access to government services.
Objectives and Strategies of Emiratisation: Fostering Job Opportunities and Skill Development
Emiratisation aims to elevate the number of Emiratis in the workforce and reduce reliance on foreign labor. By creating more job opportunities, especially in high-skilled roles, this policy enhances the skills and capabilities of Emirati workers through training programs and addresses youth unemployment.
Key Strategies of Emiratisation
- Partnering with the private sector to create job opportunities.
- Establishing quotas and incentives for Emirati employment in specific industries.
- Implementing training and development programs to enhance skills.
- Launching education and awareness campaigns to promote high-skilled careers.
- Introducing regulations and enforcement mechanisms to monitor compliance.
Major Sectors Targeted by Emiratisation
Emiratisation targets privately-owned companies across sectors like information and communications, finance and insurance, property, education, healthcare, construction, and more. Meeting Emiratisation quotas is mandatory for firms with 20 to 49 employees, whereas free zone companies can voluntarily contribute.
Key industries included in Emiratisation initiative
The Emiratisation initiative focuses on various key industries, encompassing 14 sectors, such as real estate, education, construction, and healthcare, among others. Previously, only companies with 50 or more employees were obligated to meet Emiratisation hiring targets.
Beginning in 2024, privately-owned companies with 20 to 49 employees that fail to employ at least one Emirati individual will face a fine of Dh96,000 ($26,000). Furthermore, the penalty will increase to Dh108,000 ($30,000) in 2025 for businesses that have not employed two Emiratis.
Previously, the requirement to employ a certain number of Emiratis was limited to private companies with 50 or more employees, excluding businesses in free zones from this regulation.
As of now, it remains uncertain if the same exemption will be applicable to companies with 20 to 49 employees in free zones.
The sectors affected by this new regulation include:
- Information and communications
- Financial and insurance activities
- Property
- Professional and technical activities
- Administrative and support services
- Arts and entertainment
- Mining and quarrying
- Transformative industries
- Education
- Healthcare and social work
- Construction
- Wholesale and retail
- Transportation and warehousing
- Hospitality and residency services
These measures have been implemented to incentivize Emiratis to pursue skilled positions within the private sector.
In February, it was announced that companies would be required to increase the proportion of Emirati employees by 1 percent every six months. The target for employers is to reach 4 percent by the end of the current year, followed by 6 percent by the close of 2024, 8 percent the following year, and ultimately reaching 10 percent by the end of 2026.
Rules for the Private Sector in Promoting Emiratisation
The private sector in the UAE has implemented regulations to support Emiratisation efforts, requiring employers to hire Emiratis for skilled positions based on specific qualifications and salary criteria. The criteria for Emirati employees are as follows:
- Possess a certificate higher than secondary level or equivalent.
- Possess a worker certificate that has been attested by a competent authority.
- Earn a minimum monthly salary of AED 4,000.
- Belong to one of the following categories:
- Legislators, business executives, and managers.
- Writing professionals.
- Professionals in technical, scientific, and human fields.
- Technicians in technical, scientific, and humanitarian fields.
- Service and sales occupations.
These guidelines aim to ensure that Emiratis are given priority in skilled job opportunities within the private sector, while also considering their qualifications and salary requirements.
Challenges Facing Emiratisation Implementation
Emiratisation has encountered challenges over the years, including a skills gap, limited job opportunities, education and awareness gaps, language barriers, cost implications for companies, and resistance to change. Addressing these challenges is crucial for successful implementation.
Potential Impact on the UAE Economy and Society
Emiratisation’s impact on the UAE’s economy and society is multifaceted. By reducing reliance on foreign nationals and creating job opportunities for Emiratis, this policy fosters economic growth, stability, and sustainability. Although there are concerns about increased labor costs, Emiratisation ultimately bridges the skills gap, leading to greater opportunities and future growth.
Conclusion: Embracing Emiratisation for a Thriving UAE
As an investor or entrepreneur, understanding and embracing Emiratisation is essential for thriving in the UAE. Crosslink International is here to support your company formation and PRO services, ensuring compliance with Emiratisation regulations. Embrace this transformative policy and contribute to the growth and prosperity of the UAE’s workforce and economy.
In the event that you are interested in receiving expert advice, please do not be reluctant to call our Business Consultant. If you have any questions, please do not hesitate to get in touch with us by e-mail at info@crosslink.ae or by phone at +971 4 321 6631.
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