2023: New emiratization rules for private companies in the Emirates

New quota imposed on small businesses for employing Emirati citizens

The Ministry of Human Resources and Emiratisation (MoHRE) in the United Arab Emirates has imposed a new quota for employing Emirati citizens within small businesses. This measure aims to promote Emiratisation and increase Emirati participation in the private sector in Dubai and the UAE.

Now, companies with 20 to 49 employees will be required to hire at least one Emirati citizen by 2024, and another one by 2025 (previously applicable only to companies with over 50 employees).

This expansion of Emiratisation requirements opens up new opportunities for Emirati graduates in small businesses, facilitating their professional development. These measures demonstrate the UAE’s ongoing commitment to strengthening the presence of Emirati citizens in the job market and promoting a diversified and balanced economy. Emiratisation helps reduce dependence on foreign labor and fosters the development of local skills, thereby enhancing the national economy.

Extending the scope of emiratisation requirements in the private sector in the Emirates

As we reminded you above, prior to 2023 in the UAE only companies with 50 or more employees were required to meet targets for hiring UAE citizens. However, these requirements have now been extended to include private companies in 14 sectors, such as real estate, education, construction and healthcare. This expansion is designed to ensure greater corporate participation in the Emiratization initiative, thereby promoting employment for UAE citizens.

This major development means that all companies in the United Arab Emirates (UAE) will ultimately be required to employ at least one Emirati. Emiratization targets open up new prospects and opportunities for Emirati graduates, particularly in start-ups and small and medium-sized enterprises (SMEs). Working in these dynamic environments will enable them to acquire valuable skills, develop their talent and actively contribute to the growth of these companies. This reform reinforces the key role of Emiratis in the country’s entrepreneurial fabric, while fostering their professional development and stimulating innovation within the private sector.

Consequences of non-compliance with the new Emiratisation requirements

Companies with 20 to 49 employees failing to employ at least one Emirati citizen by 2024 will face a fine of AED 96,000 (USD 26,000). Furthermore, businesses not meeting the requirement of employing two Emiratis by 2025 will incur an increased fine of AED 108,000 (USD 30,000). It is yet to be confirmed if the exemption previously granted to free zone companies with 50 or more employees will apply to those with 20 to 49 employees.

The sectors affected by this new regulation span various industries, including information and communications, financial and insurance activities, real estate, 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 aim to encourage Emiratis to take up skilled positions in the private sector. The ongoing Emiratisation campaign, led by Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, aligns with the UAE’s “We the UAE 2031” strategy, outlining the country’s development path for the next decade.

To achieve the set targets, private sector companies with 50 or more employees were required to ensure that 3% of their workforce comprised Emiratis by July 2023. Additionally, it was previously announced that companies should increase the proportion of Emirati employees by 1% every six months, with targets of 4% by the end of the year, 6% by the end of 2024, 8% the following year, and 10% by the end of 2026.