Emiratisation in the United Arab Emirates and its impact on employers and candidates

Nov 16, 2022

Emiratisation is an initiative introduced by the UAE government to promote the employment of UAE nationals within the private sector. New targets come into force on January 1 2023. This article details the targets and their impact on employers and candidates looking for jobs in the UAE.

The new Emiratisation requirements take effect on 1 January 2023 and the imposition of penalties for companies which are not compliant with the requirements will start on the same date. To date the Emiratisation policies have been applied most stringently to the banking, insurance and finance sectors but recent changes in the law to relax restrictions on foreign ownership of companies and the promotion of foreign investment into the UAE will expand the reach of the new regulations.

These new regulations go hand in hand with the UAE’s ambitious target of creating 75,000 new jobs in the private sector by 2025 with a target of 10% Emiratisation.

What is Emiratisation?

Emiratisation is an initiative introduced by the UAE government to promote the employment of UAE nationals within the private sector. It is similar to the Saudisation policy of the government of Saudi Arabia.

The current Emiratisation quotas are:

2% for commercial entities with over 50 employees
4% for banks, and
5% for insurance companies

The Emiratisation quotas have been heavily enforced in the banking and insurance sectors; however, the quotas for other commercial entities were not enforced strictly until January 2017 when a form of labour market testing for employers with headcounts of 50 plus was introduced.

The “Tawteen” and the Nafis Scheme were launched with the aim of increasing Emiratisation and requiring employers to meet a benchmark of employing 2% Emirati nationals upon achieving a workforce of 50 employees or more, which in practice meant a headcount of 1 Emirati national for every 50 employees. The Nafis Scheme went further and reinforced the UAE’s aim to reach an Emiratisation quota of 10% by 2025 as part of the UAE’s “Projects of the 50”.

Tawteen: The National Programme for Emiratisation

The Ministry of Human Resources and Emiratisation (MOHRE) plays a crucial role in supporting the Emirati workforce and the local business community in the UAE. The MOHRE Tawteen initiative was created with the objectives of working in partnership with stakeholders to develop local human resources in line with the demands of the labour market and increasing the employment of UAE nationals in the private sector.

The Tawteen Gate is a smart digital labour market testing platform It works in close collaboration with private entities registered with MOHRE to qualify, train and empower national human resources.

Tawteen services offered through the portal fall into four categories

job seeker registration
employer services
training and skills development
counselling

SERVICES FOR JOB SEEKERS

MOHRE defines a ‘job seeker’ as anyone who has a UAE citizen ID and is at least 18 years old.

Job seekers can register with Tawteen Gate as a new user and upload their CV then search for job vacancies.

SERVICES FOR EMPLOYERS

For employers, there is an option to be a part of Tawteen Partners Club to increase the chances of finding the right candidates. There are three membership options:

Platinum Class
Gold Class
Silver Class

Each option facilitates organisations to get work permits for their employees and offers various benefits. These include Red Carpet services, reduced work permit fees and possible exemption from presenting a bank guarantee.

Among other criteria, the membership category is classified with the level of Emiratisation in a particular firm. This also determines the level of ‘priority.’

Firms with a high Emiratisation priority are those that operate in economic sectors such as finance, health, education, consultancy and communication. They should also have at least 125 employees.
Firms with medium Emiratisation priority are those that operate in sectors such as business, retail, hospitality and transportation. They must have a minimum of 250 employees.
Finally, firms with low Emiratisation priority are those that operate in economic sectors such as construction, maintenance, cleaning, security and recruitment. They should have at least 500 employees to be eligible.

Employers who register with the system can submit vacancies to obtain the CVs of job seekers. If you are an employer, you can register with Tawteen Gate with the help of these documents:

Establishment Card
Commercial license
Contract data for the concerned party

Companies and organisations which are already under the MOHRE domain can register through the Tas’heel System. MOHRE grants membership to private sector entities in the UAE who have their own human resources department based on the following criteria:

Ratio of national employees to total skilled workers in the firm.
Diversity of economic activities and geographic expansion of the firm
Ratio of skilled workers to total workers in the firm

Once an employer fills out the membership application, MOHRE’s Tawteen department will respond within 10 days from the date of application. A field visit to the firm will be carried out. Once the membership is approved, the employer will be given the Tawteen Partners guide and notice of updates.

The membership is valid for one year and renewable if all the criteria are met. There are no membership charges for employers registering with Tawteen UAE.

TRAINING PROGRAMMES

Along with streamlining recruitment processes in the country, MOHRE has also set up a Training and Skill Development Division to prepare local talent for the demands of the competitive job market. Upon completion of the training programme, candidates can improve their chances of being hired in the private sector.

Tawteen UAE offers several training programmes and you can join more than one programme at a time. Official certificates are also awarded upon successful completion of programme requirements.

COUNSELLING

Tawteen has also built a Tawteen 360 Student Forum for career counselling and guidance of school and university students. Career guidance is available for school students, university students, parents of students as well as job seekers.

NAFIS

The Nafis (meaning to compete in Arabic) program was launched on 13 September 2021 as part of the UAE’s ‘Projects of the 50,’ and aims to support Emirati nationals to pursue their professional careers in the private sector.

Against an ambitious target of creating 75,000 jobs in the private sector by 2025, the program has a number of different strands by way of support to Emirati nationals seeking either to enter the workplace or to develop their career. It is now mandatory for all MOHRE registered companies to ensure that they are enrolled with NAFIS.

NAFIS also operates a recruitment portal with the aim of connecting job applicants with companies, therefore, assisting companies in sourcing UAE nationals.

The NAFIS scheme offers a number of benefits to those employers/UAE nationals that are registered, including reduced employer pension contributions for UAE nationals and salary contribution of up to AED 8,000 per month for each UAE nationals hired under the scheme.

Alongside these initiatives, a supporting structure has been established to facilitate these programs with the establishment of an Emirati Talent Competitiveness Council. This Council is tasked with engaging with federal representatives and implementing the various strands to Nafis. Support to graduates setting up start-ups is also envisaged, as is a plan to encourage those employed in the public sector to take up opportunities in the private sector (and potentially move to early retirement from the public sector). Further, UAE nationals currently employed in the federal government can apply for sabbaticals at 50% of their salary, for six to twelve months to enable them to start their own businesses in the private sector.

Nafis offers an ambitious and exciting range of options for both employers and Emirati nationals. One key consideration for employers is access to these programs to support their employment of Emirati nationals with the caveat that they must subscribe to achieving 10% Emiratisation.

The New Emiratisation requirements

The Ministry of Human Resources and Emiratisation (MOHRE) issued a new Ministerial Decision (Ministerial Decision No. 279 of 2022) in relation to Emiratisation in the UAE, following the introduction of the UAE Federal Labour Law (Federal Decree Law No. 33 of 2021) together with UAE Cabinet Resolution No.1 of 2022.

The new Emiratisation requirements will take effect from 1 January 2023 and apply to all employers that fall under the jurisdiction of the MOHRE (ie those companies based onshore (mainland UAE)). The requirements will not not apply to companies that are based in free zones.

Private sector companies with 50 or more employees are required to increase their Emirati workforce in excess of their current quota through a 2% year on year increase until they reach 10% in 2026. The actual number of Emiratis required will be calculated according to the overall number of skilled workers in the company.

The aim of the Emiratisation requirements is to ensure that the private sector workforce comprises a minimum of 10% UAE nationals by 2026.

There are separate Emiratisation quotas for the banking and insurance sectors; the quotas will remain at 4% and 5% respectively.

An employee is classified as a skilled worker if the following conditions are met:

the employee falls into one of the following five categories:
level 1: legislators, managers, and business executives
level 2: professionals in scientific, technical and human fields
level 3: technicians in scientific, technical and humanitarian fields
level 4: writing professionals
level 5: service and sales occupations
has obtained a certificate higher than a high school certificate or an equivalent certificate
the certificate must be attested by the competent authorities
have a monthly salary (excluding commission) of not be less than AED 4,000

Another factor to consider is that within the five skillset categories , skill set category 4 is now a level which requires certification.

In order for Emirati nationals to be counted against the quota, employers need to ensure that they comply with all labour regulations, and that they have furnished each UAE national with a work permit and employment contract, registered them with the applicable pension authority, and paid them through the Wages Protection System.

Companies should bear in mind that existing Emirati employees pre-January 2023 will be disregarded when calculating the quota (although this may be subject the employer’s existing number of Emirati employees and the composition of their workforce).

The new Emiratisation requirements stipulate fines for non-compliance with the quotas. Each employer who does not comply with the relevant Emiratisation rate will be fined AED 6,000 per month per Emirati employee falling short of the quota. This fine will be increased by AED 1,000 per month per year.

In addition to the new Emiratisation requirements, the Ministry of Human Resources & Emiratisation has announced amended conditions for the Platinum membership of the Tawteen Partners Club. To receive the Platinum membership, employers must now increase their Emiratisation quota by at least three times the prescribed annual ratio (if the number of Emirati employees is at least 30) or participate in the Nafis programme and train at least 500 Emirati nationals per year.

MOHRE Company Categorisation

The MOHRE will categorise companies into three tiers to incentivise compliance with the Emiratisation requirements as follows.

Category 1:

Companies need to achieve at least one of the following objectives:

increase their annual Emiratisation quotas at least three times above the target
hire and train at least 500 UAE nationals annually
being a small/medium company owned by a young UAE national, or
being a qualifying training and employment centre.

Incentives / Penalties: MOHRE will set work permit fees at a maximum of AED 250 for two years. The employment of UAE/GCC nationals will be exempt from these fees

Category2:

Companies that do not meet the above category (1), but which nevertheless meet the Emiratisation quota of 2% per year will fall under this category (2).

Incentives / Penalties: MOHRE will set work permit fees for employers that fall in this category (2) at AED 1,200 for two years. The employment of UAE/GCC nationals will be exempt from these fees.

Category 3:

Establishments that do not meet the Emiratisation quota.

Incentives / Penalties: For companies that fall under category (3), a fine of AED 6,000 per month in respect of each UAE national not hired will be imposed. This fine will be increased on an annual basis by AED 1,000 per month.

Attracting and Retaining Emirati talent

The new Emiratisation decree that mandates companies with 50 or more employees to increase their Emiratisation quota by 2% annually will challenge many employers. Not only because it currently appears that any existing Emirati employee population (dependent on employee headcount) will not be taken into account when determining the quota, but also because it remains a challenge in the UAE labour market to attract and retain Emirati talent.

Companies may introduce a variety of measures to tackle the achievement of these targets, such as short term and long term incentive programmes, training schemes and international secondment initiatives, in an effort to attract and retain talent.

In the healthcare sector, there is a shortage of Emirati professionals, and it is anticipated that positions will still remain open to foreign applicants.

Working in the medical sector in the UAE

Candidates who wish to work as consultant / specialist physicians and family physicians (general practitioners) are invited to register a CV and contact us to discuss options. Advertised jobs can be viewed on line and applications submitted by uploading a CV which should be recent and address the eligibility criteria of the job as detailed in the job advert.

Doctors preparing to work in the UAE or other gulf states require a DataFlow report (our guide details the procedures for obtaining this in a timely fashion) and a licence to practise with the appropriate medical professional regulatory authority. The licence can be obtained after a suitable job offer has been accepted.