The United Arab Emirates is seeing an impressive economic growth rate in various sectors. The World Economic Forum has ranked it the most competitive economy in the Middle East and North African Region (MENA).
With its highly skilled workforce, solid infrastructure, and stable macroeconomic environment, the United Arab Emirates (UAE) is considered one of today’s most popular and business-friendly destinations.
Like any foreign country, hiring talent in the UAE doesn't come without challenges. For employers located in the region these consist mainly of Emiratization and UAE employee requirements for employers.
Learn what Emiratization is and what you need to consider when hiring Emirati talent in the UAE:
What is Emiratization?
Emiratization is a UAE government policy that aims to ensure the employment of UAE nationals (Emiratis) by companies doing business within the UAE’s borders. This policy applies to the private and public sectors and is one of the UAE Ministry of Human Resources & Emiratization (MOHRE)’s highest priorities.
In simple terms, any local or foreign company must have a certain number of Emirati workers on the payroll.
What does the Emiratization policy entail?
The Emiratizatton policy can be summed up by the following two items:
- Emirati employee quotas
- Employer requirements around Emirati employees
What is the quota (percentage) of Emirati national employees that employers must have?
According to the latest Emiratization Law's update, private sector companies falling under the jurisdiction of the UAE Ministry of Human Resources & Emiratization (MOHRE) are required to have a minimum of 2% of their workforce composed of Emirati nationals.
To be more specific, Emiratization rules state that if a company has 50 skilled employees or fewer on its payroll, it must have at least 1 Emirati employee. In addition, if a company has 51 to 100 skilled employees, they need 2 Emirati employees on its payroll.
To break it down more simply, companies can calculate their Emiratization rate in reference to the number of skilled workers in the company:
- 50 skilled workers; minimum 1 Emirati employee
- 51-100 skilled workers; 2 Emirati employees
- 101-150 skilled workers; 3 Emirati employees
- 151 & above: 1 Emirati employee for every 50 or fewer workers
What are the fines and penalties for not meeting the Emiratization Law’s quota?
Companies that fail to comply with the abovementioned requirements must fulfill the following penalties:
A minimum fine of AED 6.000 (USD 1.600) per month per each Emirati employee not hired. These fines will be increased yearly and could lead to suspending the company’s permit to do business in the UAE.
If the company fails to comply with its Emiratization quotas for two consecutive years, it will be demoted to a “third category” under the Classification Law.
Additionally, with the release of the law’s latest update, UAE authorities have made stringent announcements to pursue non-compliant companies.
What are the employer requirements when hiring Emirati nationals in the UAE?
The Emiratization law also touches upon obligations that employers are required to comply with when hiring Emirati employees; these are:
- Employers must provide Emiratis with an appropriate workplace, tools, and minimum on-the-job training for them to be able to perform their duties.
- Obtain a permit from MOHRE for the Emirati employee.
- Sign an employment contract with the employee.
- Pay their salary following the UAE’s Wages Protection System.
- Register the UAE national in the Pensions and social security System and start contributing within a month of the worker’s work permit issuance.
- Report any necessary amendments to the employment contract that may affect the eligibility requirements stated by the “Nafis Programme”.
- Upon termination of employment, the employer must cancel the previously mentioned work permit.
Additionally, employers must not:
- Deduct from the Emirati’s salary for benefiting from the UAE’s support program.
In turn, Emiratis are required to inform MOHRE about any practices that may violate the provisions stated in the Emiratization Resolutions, thus leaving no leeway for unethical practices or skipping the rules.
Companies hiring Emirati talent
Although these requirements, regulations, and policies seem daunting, a plethora of international companies have been hiring Emirati talent in the UAE; the list includes:
- Cold Stone Creamery
- Rolls Royce
- General Motors
- Cigna Healthcare
- Mayo Clinic
- BAE Systems
- John Lewis/Waitrose
- Lockheed Martin
The Emirati market presents very appealing business advantages for companies, like having no corporate taxes, a stable currency, low import duties, competitive labor costs, and the availability of 100% foreign ownership, among many others.
These advantages, ensured by the Emirati government, have made the United Arab Emirates a very popular country for international companies.
Let Localized help you reach your Emirati talent acquisition goals
The UAE market and economic policies provide ample opportunities for companies to grow, thrive, and increase their revenue, but not without its challenges.
Meeting the government’s requirements is a must, and the consequences for not doing so are expensive. And with so many companies competing for the limited Emirati workforce, talent attraction can be a strenuous challenge you don’t need to tackle alone.
Localized is proud to partner with top universities like NYU Abu Dhabi as well as elite programs like the MIT Arab Alumni Association and the MENA Fulbright scholars to offer employers access to qualified candidates in the Gulf. Beyond the UAE Localized GCC educational partners include KAUST in KSA and Carnegie Mellon University in Qatar.
Recruiting on Localized gives employers the opportunity to connect with, source and hire top quality Emirati candidates through a single source. Fortune500 employers trust Localized to help them find talent in the UAE and across EMEA.
Ask us about our upcoming regional virtual career fairs to build brand awareness in the markets you need access to.