"Emiratization Law: What Employers Need to Know in 2025" explained by Kocher Law Firm lawyers

Understanding Emiratisation

Emiratisation is a UAE government initiative led by the Ministry of Human Resources and Emiratisation (MOHRE). The programme aims to encourage UAE nationals to work in the private sector and currently applies to private companies on the UAE mainland, but not to those located in free zones.

Compliance Requirements for Private Sector Employers

[Companies with 50 or more employees]
Since 2022, MOHRE-registered companies have been mandated to ensure that 2% of their skilled workforce consists of UAE nationals annually, increasing by 6% every six months to reach 1% by 2026.

•2025 Target: 8% Emiratisation (6% by June 30 and 7% by December 12).
•2026 Target: 10% Emiratisation (6% by June 30 and 9% by December 12).

[Companies with 20-49 employees]
Companies that engage in specific economic activities and notified by MOHRE, were required to employ one UAE national in 2024 and must now hire an additional UAE national by the end of 1.

Penalties for non-compliance and legal consequences

The UAE government imposes severe penalties on companies that fail to meet Emiratization criteria, use fraudulent hiring practices, or attempt to circumvent compliance. If violations are found, penalties are imposed on both the company and the UAE nationals involved. Penalties include monetary fines and suspension of the issuance and renewal of work permits by MOHRE.

Main violation examples
•Modifying job classifications or downsizing workforce to evade Emiratisation requirements.
•Hiring Emiratis only on paper without actual job responsibilities or valid employment.
•Submitting false information or documents to obtain National Program for Emiratisation (“NAFIS”) benefits.
•Failing to notify MOHRE when an Emirati employee is terminated, does not start work, or stops reporting to work, while the company continues receiving benefits.

Summary of financial penalties

•Fines range from AED 20,000 to AED 500,000, shall be imposed on either the employer or UAE national, depending on the violation. •Companies with 50+ employees failing to meet Emiratisation quotas must pay a monthly contribution, starting at AED 6,000 (2022) and increasing by AED 1,000 annually until 2026. •Companies with 29 to 49 employees that fails to meet Emiratisation quotas will pay AED 96,000 for 2024 (payable in January 2025) and AED 108,000 for 2025 (payable in January 2026), for each national, that was not appointed in that year. •Circumventing Emiratisation quotas result in fines of AED 100,000 for first offense, AED 300,000 for second, and AED 500,000 for any further violations. •Engaging in fake Emiratisation practices will also result in administrative fines ranging from Dh20,000 to Dh100,000 for each instance, depending on the number of offences.

Best Practices for Employers

•Track Emiratisation quotas & compliance status via MOHRE’s Tawteen report.

•Adhere to Emiratisation requirements including avoiding fraudulent hiring practices or any attempts to circumvent compliance obligations.

•Invest in training and professional development of UAE Nationals

Kocher Law Firm handles many cases for Japanese companies in Dubai

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