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Emiratisation regulations for UAE Companies

16th February 2017

Emiratisation is an initiative of the UAE government to get UAE Nationals into the workforce, both in the public sector and the private sector.  According to The National, in 2016, over 75% of Emiratis working in Abu Dhabi had jobs in the government; 16.6% with semi-government entities and just 5.8% in the private sector (7th February 2017).

Emiratisation requirements

Private sector companies should be aware of, and comply with, the following Emiratisation requirements:

  • Companies with 100 employees or more are required to employ an Emirati PRO.
  • Companies in the ‘trade’ sector, with activities classified under 50, 51 and 52 of International Classification, and employing 50 or more staff, are required to employ Emiratis at a rate of 2%. (Repair garages and scrap dealers are exempt.)
  • Companies engaged in insurance activities are required to employ Emiratis at a rate of 5%.
  • Banks operating in the UAE are required to employ Emiratis at rate of 4%, annually.
  • Companies employing 1,000 or more employees are required to register on the Ministry of Human Resources and Emiratisation (MOHRE)’s electronic system, Tasheel. They are required to employ at least two Emirati employees, in data entry positions, to access that system to obtain work permits.
  • Construction and industrial companies, with a workforce of 500 or more, are required to employ an Emirati Health and Safety Officer.

Companies falling into the above categories are required to provide Tanmia with the following information about their National employees, twice a year:

  • Name
  • Recruitment date
  • Grade
  • Any other information requested by Tanmia.

Failure to comply with Emiratisation requirements

Failure to comply will mean result in suspension from MOHRE until it can be proved that the criteria is met.  Therefore, no new work permits will be issued.

Incentives for private sector companies to employ UAE Nationals

The following incentives are provided to companies meeting the UAE’s Emiratisation requirements:

  • Lower fees when apply for visas
  • Exemption from providing financial guarantees (currently AED3,000 per employment visa) for companies which observe the strictest adherence to Emiratisation requirements.

Companies with a workforce comprising at least 10% UAE Nationals; have a minimum 25 UAE Nationals in the workforce with qualifications falling in professional levels 1-3 can move three degrees above their normal classification.

Companies with a workforce comprising at least 5% UAE Nationals; have a minimum 10 UAE Nationals in the workforce with qualifications falling in professional levels 1-3 can move two degrees above their normal classification.

Companies with a workforce comprising at least 3% UAE Nationals; have a minimum 5 UAE Nationals in the workforce with qualifications falling in professional levels 1-3 can move one degree above their normal classification.

Additional obligations when employing UAE Nationals

It should be noted that when employing Emiratis, the company will need to register with the Abu Dhabi Retirement Pensions and Benefits Fund.  It is a requirement for a monthly contribution of 20% of the Emirati’s salary to be paid into the Fund.  Of this 5% is deducted from the employee’s salary and a further 15% is contributed directly by the employer.

The pensionable salary elements in the private sector are: the monthly basic salary and all other regular monthly allowances. The pensionable salary should not be less than AED3,000 or more than AED60,000.

Termination of UAE Nationals

It should be noted that Ministerial Decision No. (176) of 2009 considers the termination of UAE Nationals employed in the private sector as unlawful, unless the employee has violated the Labour Law.

Exemptions from the UAE Emiratisation regulations

Emiratisation is not applicable to free zone entities.

The Challenges of Emiratisation

According to information released by MOHRE on 9th February 2017, the keys reasons UAE Nationals are unable to secure work in the private sector are:

  • Lack of language and communication skills (65.5%)
  • Failure to meet required qualifications (24.35)
  • Lack of experience (6.9%)
  • Over qualified (2.4%)

The main reasons for Emiratis turning down jobs are:

  • No satisfied with salary (37.7%)
  • Geographic location (32.8%)
  • Better job offers (11%)
  • Inconvenient working hours/days (6.3%)
  • Preferred working part time (2.75%)

Related Blogs that you may be interested in:

The Importance of Culture when doing Busines in Abu Dhabi     CLICK HERE

Amendments to UAE Employment regulations     CLICK HERE

Are you looking to set up a business in Abu Dhabi or to change your local sponsor or service agent?  Let Gateway Group of Companies help with your business setup and visa processing requirements.  Email us at: info@GatewayToAbuDhabi.com

Jenny Hunt Gateway Group of Companies

Jenny Hunt, CEO Gateway Group of Companies

email Jenny@GatewayToAbuDhabi.com

Twitter @JennyatGateway

 

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