The United Arab Emirates (UAE) imposes from this Sunday that private companies with fifty or more employees in the Arab country have 2% of their nationals in their workforce, in a country where 90% of the private workforce is composed of expatriates.
Last December, the Emirati Council of Ministers approved a decision to raise so-called “Emiratization” rates to 2% per year for skilled jobs in private sector establishments with 50 or more employees and reach an overall rate of increase of 10% by 2026.
In the event that it is not met, companies will have to pay 6,000 UAE dinars ($1,633) per month for each citizen who has not been hired as of this month, according to the Ministry of Human Resources and Emiratization.
The ministry said in a statement that the aim of this measure is “to achieve effective participation of the private sector in the UAE’s development process, as increasing the participation of Emiratis in this sector will have a positive impact on the competitiveness, attractiveness and stability of the business environment in the country.”
The legislation regulating Emiratisation will contribute to “strengthening the diversification of the labour market and consolidate the UAE’s position as an incubator for national and international talent and an ideal destination for working, living and investing”.
He added that they expect to “witness a greater impact in 2023, as Emiratization targets will increase by 2% until 2026, which will translate into a 10% growth of Emirati skilled employees.”
According to data from the International Labour Organization (ILO), the UAE has an estimated population of about 9.1 million, of which approximately 12% are UAE citizens, and about 8 million foreigners, mostly temporary contract workers.
Despite a concerted push towards the “Emiratization” of the workforce in the private sector, more than 90% of the private sector workforce is still made up of expatriates, while nationals continue to hold stable and relatively well-paid jobs in the country’s vast public sector.
Foreign workers in the UAE contributed more than US$29 billion to their home countries in 2014, making the UAE the third largest source of remittances in the world.
