Dubai: UAE companies will now reduce hiring expats as the Ministry of Human Resources and Emiratisation (MoHRE) has doubled the Emiratisation target.
In 2022, the Emiratisation target for private sector companies was 2 percent. Recently, MoHRE started applying financial contributions to companies that failed to achieve the target.
With an aim to achieve an Emiratisation of 10 percent by the end of 2026, MoHRE asked the companies to meet the target of four percent in 2023.
Impact of Emiratisation on expats, UAE companies
Although the UAE cabinet resolution to raise the Emiratisation rate was introduced with an aim to benefit locals, it will have a negative impact not only on expats but also on companies in UAE.
With the rise in the Emiratisation rate, companies will not be left with many options while hiring. On the other hand, it will result in fewer employment options for expats.
What is Emiratisation?
Under Emiratisation rule, private companies in UAE have to fulfill certain targets based on the number of employees.
If the number of employees working in a private company is less or equal to 50, there must be at least one Emirati employee.
There must be at least two percent Emirati employees in companies that employ more than 50 persons.
The percentage will rise to meet the target of 10 percent Emiratisation.
As the percentage of Emirati employees is rising, it will result in fewer options for expats in UAE.
Companies that do not adhere to the Emiratisation rules will have to pay a minimum fine of 6000 dirhams per month in lieu of each Emirati employee not hired.
As UAE authorities want to achieve the target of 10 percent Emiratisation by 2026, companies that do not comply with the target for two consecutive years will get demoted to the third category under the classification law.
