Emiratization in UAE: Comprehensive Guide for SMEs

The UAE’s Emiratization initiative is a national effort to increase the representation of Emirati citizens in the private sector workforce. While this program has been in place for some time, recent changes have expanded its reach to include smaller businesses. If you’re an SME owner in the UAE, understanding these requirements is crucial to ensure compliance and avoid penalties.

What is Emiratization?

Emiratization refers to the policies and strategies designed to boost the employment of UAE nationals within both the public and private sectors. It’s a key pillar of the UAE’s long-term economic diversification strategy, aiming to create a sustainable, knowledge-based economy.

2024 Changes: New Requirements for Smaller Companies

Historically, Emiratization targets primarily applied to larger companies (50+ employees). However, a significant change in 2024 extended these requirements to small and medium-sized enterprises (SMEs) with 20 to 49 employees. Here’s what you need to know:

• 20-49 Employees:
  • Starting in 2024, these SMEs are required to have at least one Emirati employee.
  • By 2025, they must increase this number to two Emirati employees.
• 50+ Employees:
  • These companies have had Emiratization targets for some time. The specific percentage of Emirati employees required can vary depending on the industry and company size. However, most companies must ensure that at least 6% of their workforce comprises Emirati nationals in 2024. This target goes up by 2% every year, capped to 10% by 2026.
• Targeted Sectors: The new requirements for SMEs apply across 14 key sectors, including:
  • Administrative and support services
  • Arts and entertainment
  • Construction
  • Education
  • Financial and insurance activities
  • Healthcare and social work
  • Hospitality and residency services
  • Information and communications
  • Mining and quarrying
  • Professional and technical activities
  • Real estate
  • Transformative industries (e.g., renewable energy)

Contributions for Non-Compliance

Failure to meet Emiratization targets can result in significant financial contributions. The exact fines can vary depending on the number of employees and the extent of non-compliance. It’s essential to be aware of these contributions and prioritize fulfilling your Emiratization obligations.

• Companies with 20-49 employees: AED 96,000 in 2024 and AED 108,000 in 2025
• Companies with 50+ employees: Contributions are calculated for every Emirati not hired and can reach up to AED 500,000 for repeated violations.

Strategies for Successful Emiratization

• Recruitment and Training: Actively seek out qualified Emirati candidates and invest in training programs to help them develop the skills needed for specific roles within your company.
• Partnerships: Collaborate with government agencies and organizations that support Emiratization efforts. They can offer valuable resources and guidance.
• Retention: Create a positive work environment that fosters inclusivity and encourages Emirati employees to stay with your company long-term.

Benefits of Emiratization for Your Business

Beyond compliance, embracing Emiratization can bring various advantages to your business:

• Local Expertise: Emirati employees bring valuable insights into the local market and culture.
• Positive Brand Image: Demonstrating your commitment to Emiratization can enhance your company’s reputation in the UAE.
• Government Support: Many government initiatives offer incentives and support to companies that actively contribute to Emiratization goals.

Staying Informed

Emiratization regulations can evolve, so it’s important to stay up-to-date with the latest requirements. The Ministry of Human Resources and Emiratisation (MoHRE) is the primary source of information, and they regularly publish updates and guidelines.

How HumLog supports:

1. Guidance on Emiratization requirements and contribution avoidance.
2. Provides eligible Emirati candidates for immediate hiring as per requirements identified.
3. Support with registration for the Nafis program where up to 50% of the salary is subsidized by the government.
4. Support in registration to the GIPSA portal for pension management.
5. Ongoing support for engagement and retention of the Emirati employee.

Fees and charges:

1. HumLog charges a flat fee of 10% of the annual Emirati Salary (company contribution) for every successful hire.
2. We provide a free 3-month replacement guarantee and complete support for onboarding and ongoing support.

Contact us today to learn more!