Emiratisation Expansion to Include Companies with Less Than 50 Employees

The UAE’s Emiratisation initiative is expanding, requiring small businesses to recruit Emiratis to their workforce. This significant development was announced by the Ministry of Human Resources and Emiratisation (MoHRE), with the goal of Emiratisation expansion in companies with 20 to 49 employees across various sectors. From 2024, these businesses must hire at least one UAE citizen, increasing to two by 2025, to meet the newly implemented quotas.

Key takeaways:

• The UAE’s Emiratisation expansion now includes small businesses, requiring them to recruit Emiratis into their workforce.
• Companies with 20 to 49 employees must meet specific quotas, hiring at least one UAE citizen in 2024 and another by 2025.
• The initiative spans across 14 sectors, including real estate, education, construction, and healthcare.
• Compliance with the Emiratisation requirements is essential to avoid fines, with penalties increasing for non-compliance.
• This expansion aims to provide more opportunities for UAE graduates, particularly within start-ups and SMEs, and promote the development of Emirati talent in the private sector.

Which sectors are included in Emiratisation expansion?

The following sectors are required to prioritize their Emiratisation efforts after the announcement:

• Administrative and support
• Arts and entertainment
• Construction
• Education
• Financial and insurance activities
• Information and Communications
• Healthcare and social work
• Hospitality and residency services
• Information and communications
• Mining and quarrying
• Professional and technical activities
• Property
• Transformative industries
• Transportation and warehousing
• Wholesale and retail

Every company in UAE must employ Emiratis:

This development presents an opportunity for small businesses in the UAE to contribute to the Emiratisation drive. David Mackenzie, Managing Director at Mackenzie Jones, a leading recruitment firm, emphasizes the significance of this expansion, stating:

“Essentially, every company in the UAE will employ an Emirati at some point in the future. It means there will be a lot more opportunities for UAE graduates, because SMEs won’t be able to compete with bigger firms so they will look at hiring new talent that won’t expect huge salaries.”

Stressing on the impact it will have on the Emirati workforce he claimed: “Emirati graduates will have opportunities at start-ups and SMEs, and it will most likely be a great learning curve for them to develop their talent.”

The Ministry of Finance’s recent announcement of five major projects aligns with the country’s “We the UAE 2031” strategy, demonstrating a comprehensive approach to future readiness. Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, leads this Emiratisation campaign, urging companies to comply with the new requirements.

وزارة الموارد البشرية والتوطين تعلن عن توسيع قاعدة المنشآت الخاصة المستهدفة بالتوطين لتشمل الشركات والمؤسسات الفردية التي يبلغ عدد العاملين فيها من 20 إلى 49 عاملاً في 14 نشاطاً اقتصادياً رئيسياً محدداً. pic.twitter.com/lBgaURiXxr

— UAEGOV (@UAEmediaoffice) July 11, 2023

What does it mean for UAE employers?

Virtually all employers and companies in the UAE are now required to hire Emiratis in their workforce. In case of not meeting Emiratisation targets, heavy fines and penalties will be levied for non-compliance.

• Failure to employ at least one Emirati in 2024 can result in a fine of Dh96,000 ($26,000) for businesses with 20 to 49 employees.
• Moreover, the penalty increases to Dh108,000 ($30,000) for those that do not employ two Emiratis by 2025.
• Earlier this year, MoHRE heavily fined non-compliant companies and will continue to do so if targets are unmet.
• Previously, only larger private companies were obligated to adhere to Emiratisation regulations, while free zone businesses were exempt.
• It remains unclear whether the same exemption applies to companies with 20 to 49 employees operating in free zones.

What employers need to do next?

These measures have been introduced to encourage UAE employers to hire Emiratis in skilled positions in the private sector. The Emiratisation expansion to SMEs and start-ups with fewer than 50 employees necessitates a progressive increase in the proportion of Emirati employees.

MoHRE introduced new deadlines earlier this year. Employers are required to achieve a 4% target by the end of this year, followed by 6% by the close of 2024, 8% the following year, and ultimately reaching 10% by the end of 2026.

Conclusion on Emiratisation expansion:

In summary, the expansion of the Emiratisation initiative to encompass small businesses presents an opportunity for the UAE’s private sector to contribute to the country’s vision.

By prioritizing the recruitment of Emiratis, companies can benefit from a diverse workforce and tap into the talent and potential of UAE graduates. Compliance with the quotas is crucial to avoid fines and support the overall Emiratisation drive.

Interested in hiring Emiratis? Get in touch with us to meet your Emiratisation goals!