Penalties on private sector companies that do not meet the Emiratisation criteria

The UAE government has recently announced the implementation of a new Emiratisation scheme that includes following certain rules and lots of benefits. However, the new Emiratisation criteria will not only include advantages, but also penalties for private sector companies that do not meet the legal requirements. Therefore, in case you own a company in the UAE, it is vital for you to be aware of the new rules.

In this article, you will learn everything you need to know about the new Emiratisation criteria and penalties on firms. In addition, we will provide you with the information you need about the new scheme’s purpose and benefits for individuals. Remember that staying up-to-date with the latest news will help you get more benefits and avoid mistakes that can lead to penalties. Let us observe:

  1. What should you know about the new Emiratisation criteria in the UAE?
  2. What penalties can private sector companies face in case of non-compliance?
  3. Will the new Emiratisation scheme include incentives for firms that meet the criteria?
  4. Does the new Emiratisation scheme in the UAE include benefits for individuals?
  5. What should you know about the discounts on service fees?
  6. What is the main purpose of the new Emiratisation criteria in the country?
  7. How can Connect Resources help you get more details about the new scheme in the UAE?

1. What should you know about the new Emiratisation criteria in the UAE?

Not long ago, the local authorities announced the implementation of a new scheme that will benefit the country and its workers. The new initiative was introduced by the UAE Cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum. The Vice President, Prime Minister of the UAE, and Ruler of Dubai mentioned the purposes, benefits, and other relevant details of the new scheme.

He announced resolutions to raise the Emiratisation rate to 2 percent on an annual basis, which is the scheme’s main goal. More precisely, it aims to increase this rate for high-skill jobs in private sector companies that employ 50 workers or more. Note that companies in the private sector that do not comply with these new rules will have to face certain penalties.

Before learning about these penalties, it is important to know how the new scheme will work and what benefits it will bring. In the UAE, the MOHRE (Ministry of Human Resources and Emiratisation) will play an important role in this scheme. The new Emiratisation criteria will come into effect in January 2023, therefore, penalties will start being applied to companies from then.

On the other hand, there will be a variety of benefits for workers, which include financial support and more. Additionally, they can get special discounts on service fees, which we will further explain below. These and many other elements are the ones that are part of the new Emiratisation rules that will come into force next year.

2. What penalties can private sector companies face in case of non-compliance?

Non-compliant private sector companies will have to face severe penalties if they do not follow the new rules related to the Emiratisation criteria. One of the most important rules that these companies must comply with is employing a 2% Emirati workforce. Otherwise, they will have to pay a fine of AED 6,000 on a monthly basis as a penalty for non-compliance.

Besides the AED 6,000 fine, you should also know that this penalty will be increasing AED 1,000 per year. In this way, it will continue to increase if private sector companies stay non-compliant and remain without following the new UAE Emiratisation rules.

On the other hand, it is important to be aware of the announcement made by the Minister of Human Resources and Emiratisation, Dr. Abdulrahman Al Awar. He mentioned that private companies with 50 or more employees should have a 2 percent Emirati workforce in high-skilled jobs. This rule will be applied in order to reach 10% of the quota in 5 years.

3. Will the new Emiratisation scheme include incentives for firms that meet the criteria?

According to Dr. Abdulrahman Al Awar, it is confirmed that the UAE’s leadership has allocated around AED 24 billion to employ 75,000 nationals in the private sector over the next 5 years. However, he also mentioned that there will be incentives for private sector companies, so they can accelerate training programs for Emirati citizens.

These incentives will also help companies incorporate more Emiratis into their workforce without complications or delays. On the other hand, it is also important to be aware of other benefits for private sector companies. For example, those companies that accomplish major achievements in terms of recruitment and training of UAE nationals will get additional incentives.

Among the most outstanding incentives, you will find a reduction on the MOHRE service fees. These will decrease by 80%, which will be a significant advantage for companies.

4. Does the new Emiratisation scheme in the UAE include benefits for individuals?

As we previously mentioned, the new Emiratisation criteria will consist of several elements, and most of them are beneficial. For example, it will include a variety of benefits for individuals, including financial support for many different cases or situations. In the UAE, the new Emiratisation scheme will include the following benefits:

  • Salary support.
  • Child support.
  • Pension support.

Each of these support initiatives will depend on certain factors that you should know about. Besides, these types of financial support options will provide different amounts of money, which will also depend on the person’s situation. Below, we will quickly explain how these benefits will work and how they will be favorable.

4.1. Salary support

Salary support is a benefit that all UAE citizens will be able to receive from January 2023 onwards. As per the new Emiratisation criteria, citizens who work in private sector companies will obtain 1-year salary support. However, there are some conditions that you must be aware of regarding this new type of initiative.

According to the new rules related to the Emiratisation initiative, citizens can only receive up to AED 8,000 per month during training. Furthermore, you should also know that this salary support benefit also includes support for university graduates in the UAE.

Nonetheless, the amount of money that they will receive differs from the one that workers will get. University graduates can only get up to AED 5,000 monthly for up to 5 years. On the other hand, this initiative will also benefit Emirati coders, accountants, and nurses.

4.2. Child support

Besides salary support, UAE citizens who work in private sector companies will be able to get child support. More precisely, Emiratis will receive at least AED 800 per child on a monthly basis. The UAE authorities will be able to provide a maximum of AED 3,200 per child. And just like in other cases, UAE private sector companies must comply with this rule in order to avoid potential penalties as per the new Emiratisation criteria.

4.3. Pension support

Lastly, there is another huge benefit for UAE citizens, which is the pension support initiative. The new scheme will offer a subsidized 5-year government-paid contribution on the company’s behalf against the cost of pension plans for Emirati workers. Therefore, the new criteria will be favorable for both the employees and the private sector companies.

In case you are operating a private sector company in the UAE, you can use these advantages to benefit your business. Nonetheless, it is vital for your company to comply with the new rules in order to enjoy this benefit and avoid penalties. Remember that non-compliant companies will have to pay an AED 6,000 fine, which will increase every year.

5. What should you know about the discounts on service fees?

As you now know, the new Emiratisation criteria will provide a variety of benefits. However, there is another huge advantages that all private sector companies will enjoy if they comply with the established rules. Massive discounts on service fees will be considered special incentives for companies that exceed their Emiratisation rate.

In case you own and run a company in the country, you must integrate Emirati citizens into your workforce as per the new rules. If your company demonstrates major achievements related to the goal of the new scheme, it will get discounts on service fees. In fact, there will be an 80% reduction in these service fees of the MOHRE.

6. What is the main purpose of the new Emiratisation criteria in the country?

The UAE Cabinet launched this initiative in line with the Nafis federal program in order to facilitate private sector employment of UAE citizens. With the new Emiratisation criteria, it is expected to create more than 12,000 job opportunities for UAE citizens on an annual basis. This scheme will increase the overall rate of Emiratisation by 2026.

According to Dr. Abdulrahman Al Awar, the government will focus on economic development and the empowerment of human capital. This is in order to reach the goal of building the best and also the most dynamic economy in the world. Furthermore, the Minister of Human Resources and Emiratisation also added that this goal mandates integrated solutions, which are aligned with the aspirations and needs of individuals and society alike.

Therefore, this new scheme will include enhancing and supporting local resources, as well as ensuring the flexibility of the economy. Additionally, it will help to consolidate the reputation of the country as a hub for talent, investment, and employment.

7. How can Connect Resources help you get more details about the new scheme in the UAE?

Running a company in the UAE can be easy and challenging at the same time for a lot of reasons. If you truly desire to make your way to success easier, then contacting us at Connect Resources is the best solution. Our team will help you stay up-to-date with the latest news and changes that the authorities make to the laws.

Besides, we will provide you with a variety of HR services to make your business way more profitable and efficient. Our services and solutions will help you stay compliant with the regulations and avoid legal issues like penalties. Do not hesitate and call our specialists to get more information and tips to ensure full compliance and efficiency.

Among the main services that we can provide you with, you will find the following:

Do you know what is the most effective way to get information about the new Emiratisation criteria in the UAE? Learn about the latest news is to keep in touch with Connect Resources. Our specialists will happily provide you with all the tips and details of the Emiratisation scheme and other recent news. Make sure to send us an email at contact@connectresources.ae or call us at +971 43 316 688 to talk to one of our experts.

Are you looking for career opportunities in the UAE that match your professional profile and skills? Then, make sure to visit thetalentpoint.com, where you will surely find many job offers in the country and the entire Middle Eastern region. You can get in touch with recruitment experts by sending an email at contact@thetalentpoint.com. Register now and start applying!

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