NAFIS and Emiratisation in the United Arab Emirates: AED72,000 in penalties for private sector companies that do not meet targets by 2023

Dubai: NAFIS program and emiratisation

In recent years, the United Arab Emirates has continued its efforts to insert Emirati citizens into the private sector. How do they do this? Through the NAFIS program.

In the last few days, the authorities have been putting pressure on private sector companies to reach their emiratisation targets by the end of the year, or else face financial penalties.

Explaining the NAFIS program and the Emiratisation of the private sector

 

“NAFIS is the result of collaboration between multiple stakeholders in the public and private sectors. Through tailored initiatives, NAFIS aims to integrate Emiratis into critical and emerging areas within the private sector.”

The government launched NAFIS in 2021, which means “competition” in Arabic, to support all Emiratis who decide to pursue a career in one of the many private sector companies in the country.

This program is federal, and is only open to private sector companies. The aim of this program is to strengthen and increase the competitiveness of UAE’s human resources by giving them the opportunity to work in private sector companies.

Note that the vast majority of public sector jobs are held by Emiratis.

Nafis is therefore proposing a package of measures to increase the emiratization rate (the percentage of Emiratis) in private sector establishments.

The UAE’s Minister of Human Resources and Emiratisation (MOHRE) has reminded all private sector companies with more than 50 employees to achieve an emiratisation rate of 2 per cent for skilled jobs by the end of 2022.

By 2026, the emiratization rate is expected to have reached 10% in private companies.
Saif Al Suwaidi, Undersecretary for Emiratization at MOHRE said, “We want to support private sector companies and empower them to achieve emiratization goals by the end of this year. We cooperate closely with the private sector because we believe in its role as a key partner in developing and building the future.”

Incentives and penalties of up to thousands of AED

The penalties for companies that fail to comply with NAFIS could be very high. Fines of up to AED72,000 will be levied on companies that do not comply with the new rules as of January 2023.

MOHRE says that these AED72,000 will be collected for every non-employed Emirati as of January 2023.

In reality, the AED72,000 is an annual penalty. In fact, a monthly financial penalty of AED6,000 will actually be imposed on companies that do not meet the required emiratisation rate (2%).

On the other hand, MOHRE has also indicated that private sector companies that meet the targets will be placed in the first category and will become members of the Tawteen Partners Club. This opportunity will allow them to receive discounts of up to 80% on the ministry’s service fees.
For example, for a service that cost AED3,750 these companies will only pay AED250.

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