UAE Dubai Law on Emiratisation for Private Companies

What is the UAE Dubai Emiratisation Rule?

UAE Dubai Emiratisation is a government initiative aimed at increasing the number of Emirati citizens in the workforce. This initiative includes various programs and policies that encourage United Arab Emirates citizens to enter and remain in the workforce.

UAE Dubai Emiratisation is crucial for the future vision of UAE Dubai. By increasing the number of Emirati citizens in the workforce, UAE Dubai can ensure that its workforce is skilled and capable of meeting future challenges.

What is NAFIS?

The UAE Dubai federal government has created a program called Nafis, which aims to enhance the competitiveness of Emirati human resources and provide them with the tools they need to work in the country's private sector over the next five years.

The Nafis UAE Dubai program is a federal program they have created to improve the quality of life for residents of the United Arab Emirates. They designed the program to ensure residents have access to healthcare, education, and other social services.

It offers financial assistance to laid-off Emirati workers. Nafis also stipulates that UAE Dubai citizens be paid a minimum of 800 AED per month as an allowance for each child. In addition, there is a wage support program that pays between 3,000 AED and 5,000 AED per month to UAE Dubai citizens working in the private sector. The program has been successful in improving the quality of life for UAE Dubai residents.

The Need for the Emiratisation Law

In UAE Dubai, there are more foreigners working here compared to its residents. According to statistics, Indians make up almost 30% of the UAE Dubai population and work in high-level positions in companies. They are followed by Pakistanis, Filipinos, and Iranians.

Therefore, the UAE Dubai government deemed it necessary to enact this law, which requires companies to hire UAE Dubai nationals. UAE Dubai invites foreigners to work here and to start their own businesses in UAE Dubai. It also provides them with tax advantages, work permits, citizenship, and more.

The Impact of UAE Dubai Emiratisation on the Private Sector

A new report suggests that UAE Dubai's decision to increase Emiratisation quotas in the private sector will positively affect businesses.

Various incentives will be given to the business. The report said that higher Emiratisation rates would lead to a more productive workforce and a more efficient allocation of resources. The policy will also help companies better understand and meet the needs of the Emirati community.

The report noted that the decision is in line with UAE Dubai's goal of economic diversification and achieving sustainable development. It called on businesses to prepare for change and to create Emirati-friendly workplaces.

Benefits of Emiratisation in the Private Sector

Many UAE Dubai businesses hired more people than the 2% threshold required by the Emiratisation law in 2021. As a result, these businesses later earned great rewards, such as up to 80% savings on MoHRE fees.

The number of Emirati citizens in the private sector has increased in recent years, thanks to various government initiatives that encourage businesses to employ the workforce.

There are many advantages for businesses that Emiratise, including newfound access to a highly skilled and motivated workforce, an enhanced brand image, and a strengthened relationship with the government.

2% Emiratisation Requirements

The Emiratisation requirements change after a while. Therefore, they are doing this to ensure that companies comply with all possibilities to date, making it easier for them to comply with the law.

Currently, the law requires all UAE Dubai companies to have at least 2% Emirati employees. This was based on Cabinet Resolution No. 279 of 2022.

According to the new regulations on Emiratisation, a private firm must employ at least one Emirati citizen for every 50 skilled employees on its payroll. According to MOHRE, skilled workers are:

• Minimum monthly salary of 4000 AED.
• Managers and executive-level individuals
• Scientists and humanitarians
• Technicians in the fields of science, technology, and humanities
• Professional writers
• Sales representatives
• Holders of a Secondary School Diploma (or equivalent or higher)

Below is a table to quickly understand the two percent Emiratisation law.

There are many ways to meet the Emiratisation requirements, such as training Emirati employees, hiring Emirati citizens, and offering internships to Emirati students.

United Arab Emirates Penalty Exemptions

Companies with fewer than fifty employees cannot comply with Emiratisation laws. On the other hand, UAE Dubai companies under the jurisdiction of the Ministry of Human Resources and Emiratisation (MOHRE) must compulsorily comply with the new Emiratisation laws. However, this law excludes free zones like DIFC and ADGM.

From January 1, 2023, all employers subject to MOHRE's jurisdiction must comply with the new Emiratisation laws.

Emiratisation Penalties for Non-compliance

Businesses that do not comply with this law may be subject to penalties such as fines, loss of business licenses, and even imprisonment. Additionally, a minimum monthly penalty of 6,000 AED must be paid for each unhired Emirati worker.

The Emiratisation Law was enacted to ensure that UAE Dubai Citizens are given priority in the workforce. This law applies to all businesses with more than 50 employees.

Fines to be Paid in a Single Installment

The Ministry said that companies that do not hire UAE Dubai citizens for any reason will pay a fine of 72,000 AED in a single installment, which is 6,000 Dh for 12 months. In addition, the ministry said that if businesses do not fill the 2% quota in 2023, they must employ 4% of Emirati citizens by 2024.

According to MOHRE, if a UAE Dubai citizen working in a private company resigns, the company must immediately find a replacement Emirati citizen. If the company does not do so, it will not receive any exceptions, will be liable to pay the penalty, and may be subject to further procedures.