In recent years, the UAE has been actively reforming its economy, shifting away from a model heavily reliant on foreign labor toward a more balanced system that prioritizes the employment of Emirati nationals. At the heart of this transformation is the Emiratization program—a comprehensive set of legislative, institutional, and economic measures aimed at increasing the representation of UAE citizens in the private sector.

While Emiratization was once largely advisory, it has now become a mandatory national policy backed by clear targets, financial penalties, incentives, and direct oversight from the Ministry of Human Resources and Emiratisation (MoHRE). For international companies, this means adapting strategically to a new regulatory environment—from rethinking HR structures to planning for potential fines or participating in government support programs.

Under the latest legal framework, starting from 2023, all private sector companies registered in mainland UAE with 50 or more employees are required to increase the number of Emirati nationals in their skilled workforce by a minimum of 2% each year. The rules are stricter for certain industries: banks and insurance firms must meet annual quotas of 4% and 5%, respectively. The ultimate goal is to reach 10% Emirati representation in skilled roles by 2026.

As of 2024, the Emiratization policy was partially extended to smaller businesses employing between 20 and 49 people—but only in selected priority sectors such as IT, finance, education, and healthcare. It is important to note that these requirements do not apply to companies based in free zones like DMCC, DIFC, or ADGM, although similar mechanisms are increasingly introduced there through recommendations, subsidies, and licensing conditions.

Only UAE passport holders are counted toward Emiratization quotas. Holding a long-term residency visa or investor status does not qualify an employee as Emirati under the law.

Failure to comply with Emiratization targets carries significant financial penalties. In 2024, the fine for each missing Emirati employee was AED 96,000 per year (approximately USD 26,000). From 2025, this amount will increase by AED 1,000 annually, reaching AED 108,000 in 2026. The fine is imposed every year until the quota is met. Beyond monetary penalties, non-compliant companies may face license suspensions, bans from government tenders, and blacklisting by MoHRE.

At the same time, companies that meet or exceed their quotas are eligible for a range of incentives. These include monthly salary subsidies of up to AED 8,000 per Emirati employee (depending on their qualification level), compensation for training and upskilling, and reduced fees for various government services—including license renewals, visa processing, and work permits. In addition, such companies often receive priority when government contracts are awarded.

Despite official support, many employers face real challenges. Some sectors are experiencing a shortage of qualified Emirati professionals—particularly in engineering, technical, and IT roles. Differences in expectations around salary, career advancement, and working hours also play a role. In some cases, companies attempt to meet quotas by engaging in “fake hiring” practices, employing Emiratis on paper without actual work. In response, MoHRE intensified enforcement in 2023, introducing fines of up to AED 100,000 for fraudulent contracts and suspending government support for up to five years.

Emiratization is not only a tool for social stability but also an opportunity to build resilient, locally rooted business processes. For companies competing for the trust of clients, partners, and regulators, compliance with Emiratization can become a strategic asset—both reputational and operational.

Garant Business Consultancy offers expert support to international companies seeking compliance with UAE employment regulations. We help assess and implement Emiratization quotas, draft employment contracts, facilitate communication with MoHRE, and design HR strategies aligned with national policy. Whether you are entering the UAE market or planning to expand, this topic will inevitably become a priority. We’ll help you approach it the right way—professionally, legally, and sustainably.