II: Emiratisation drive – acting locally, thinking globally (10 things to know before setting up a business in the UAE)

18 May, 2023 - UAE Life & Economy

The UAE government has been actively promoting Emiratisation initiatives to increase the participation of UAE nationals in the private sector workforce. These initiatives include various incentives and programs aimed at encouraging private-sector companies to hire Emirati employees.

In the last few months, the UAE authorities have introduced a number of measures intended to increase the number of UAE nationals who are employed in the private sector. To achieve this objective, the UAE government has also introduced the following measures aimed at employers in the private sector:

The Emiratisation Resolution requires each employer registered with the Ministry of Human Resources and Emiratisation (the MOHRE) to increase the proportion of Emiratis in the workforce by 2 per cent each year, until reaching the level of 10 per cent by 2026.

  • Requirement: The required proportion of UAE nationals in the workforce is currently one out of every 50 skilled employees. This will increase proportionately until it reaches five out of every 50 by 2026.


  • Applicability: The Emiratisation Resolution does not apply to free zone businesses. For all other entities, compliance should be ensured by June 2023 to avoid sanctions.


  • Consequences of non-compliance: With effect from June 2023, a penalty of AED 6,000 per month for every UAE national not employed in accordance with the Emiratisation Resolution along with the suspension of issuance and renewal of work permits is prescribed. The penalty increases by AED 1,000 every year. Any drop in the Emiratisation percentage must be recouped within two months to avoid a penalty.

Non-payment of the penalty for two months after the due date would result in the suspension of the labour file for the offending employer and for all other entities wholly owned by the same proprietors.