Emiratisation in the UAE for DACH Companies

FAQs, Compliance Risks and Strategic Guidance for HR Leaders and Decision-Makers

German, Austrian and Swiss companies operating in the UAE or planning to establish an entity in the UAE frequently raise similar questions regarding Emiratisation. Which companies fall under these rules? What quotas apply? And what are the potential consequences of non-compliance?

To support DACH companies in navigating these questions, we present the following FAQs based on the legal analysis of our legal business partners Dr. Constantin Frank-Fahle, LL.M., and Marcel Trost (emltc).

The FAQs provide structured guidance on:

• the definition of Emiratisation,
• scope and applicability of the rules,
• thresholds and quota requirements,
• fines and consequences of non-compliance,
• and incentives offered to companies that meet the statutory requirements.

➡ Visit the Emiratisation Landing Page for German-Speaking Companies:
https://departer.com/de/de/emiratisierung-in-vae/

To complement this FAQ, we also provide a practical tool:
A Decision Tree that helps companies quickly identify whether they fall under Emiratisation rules and which FAQ categories are relevant to them. This serves purely as a first-level orientation tool, without legal assessment or interpretation.

1. What does Emiratisation mean?

The private sector labour market of the United Arab Emirates (UAE) has traditionally been dominated by an expatriate workforce. However, the UAE introduced the policy of “Emiratisation” to encourage and increase employment for UAE nationals in the private sector. Additionally, the Nafis-Program aims to increase the competitiveness of Emirati human resources and to empower UAE nationals to occupy jobs in the country’s private sector. In short, Emiratisation can be described as employment of UAE nationals in the country’s private sector.

Whilst certain quotas have been in place for years, since 2022, Emiratisation rules have significantly developed. The scope of the Emiratisation targets has been extended to smaller companies and stricter hiring quotas and severe penalties for cases of non-compliance have been put in place. By the end of June 2025, more than 152,000 Emiratis were employed across 29,000 private sector companies.

Emiratisation rules apply to all private sector companies that are registered with the Ministry of Human Resources and Emiratisation (MoHRE) and governed by MoHRE.

This means that Emiratisation rules are applicable to private sector companies established in UAE mainland whilst private sector companies established within free zones (including the financial free zones Dubai International Financial Centre – DIFC and Abu Dhabi Global Markets – ADGM) are currently not subject to Emiratisation requirements. The term mainland refers to the territory outside a (financial) free zone.

Private sector companies established in UAE mainland are obliged to comply with Emiratisation rules if they meet the following additional requirements set out in different Ministerial Decisions:

Ministerial Decision No. 279 of 2022 requires private sector companies with 50 or more employees to increase the number of UAE nationals in the skilled workforce each year until an Emiratisation target of 10 % has been reached by 2026.

For such companies, the annual hiring target is set at 2 % yearly, split in half-yearly targets of 1 %. While maintaining previous Emiratisation rates, the 1 % growth needs to be achieved in terms of the number of UAE nationals employed in skilled positions relative to the company’s total skilled workforce. Skilled roles are defined according to MoHRE’s approved classification.

• Private sector companies employing 20 to 49 employees that operate in selected sectors as determined by MoHRE

In parallel with the existing obligations on companies employing 50 or more employees, Ministerial Decision No. 455 of 2023 requires private sector companies employing 20 to 49 employees that operate in selected economic sectors as determined by MoHRE to meet certain Emiratisation targets.

The current legislation targets the following fourteen sectors:

• information and communications;
• financial and insurance activities;
• real estate activities;
• professional, scientific and technical activities;
• administrative and support services;
• education;
• health and social welfare activities;
• arts and entertainment;
• mining and quarrying industry;
• manufacturing;
• construction;
• wholesale and retail trade;
• transportation and storage;
• accommodation and hospitality services.

Private sector companies with 20 to 49 employees that operate in these sectors were required to hire one UAE national by 31 December 2024 and are obliged to hire another UAE national by 31 December 2025.

3. Are there any sector-specific Emiratisation policies?
Sector-specific policies outline additional Emiratisation targets. For instance, according to objectives set out by the Central Bank of the UAE, the banking sector targets an Emiratisation quota of 45 % by 2026 (“Ethraa” program with the Emirates Institute of Finance – EIF as organizing entity). The Emiratisation target for 2026 for senior executive roles is 30 %. A new Emiratisation strategy recently announced for the insurance sector targets Emiratisation quotas of 50 % to 60 % at insurance companies depending on company size for the years 2027 to 2030. The new strategy also sets out additional employment conditions, for example quotas for critical roles and direct leadership positions. As of 1 June 2025, the country’s insurance sector achieved an Emiratisation rate of around 22 % and the current Emiratisation strategy for 2022 to 2026 aims to increase Emiratisation in the insurance sector to 30 % by 2026.

4. What happens in cases of non-compliance?
Emiratisation quotas are being actively enforced by MoHRE. To detect cases of non-compliance, MoHRE carries out field inspections and maintains a digital monitoring system, including advanced artificial intelligence-based tools. MoHRE urges UAE citizens to report violations and cases in breach of Emiratisation policies and requirements..

Failure to meet the required Emiratisation targets will result in the imposition of stringent penalties and fines.

Companies with 50 or more employees that do not comply with the Emiratisation quotas are subject to a fine. Starting from 1 January 2023, private sector companies failing to achieve the required Emiratisation targets were fined AED 6,000 monthly for each UAE national they had not employed in violation of the required quota and the fine increases by AED 1,000 per employee each year until 2026.

Companies with 20 to 49 employees which operate in targeted sectors were subject to a fine of AED 96,000 for 2024 for the UAE national not hired in 2024, payable in January 2025. Non-compliant companies will be subject to a fine of AED 108,000 for 2025 in January 2026.

Companies involved in so-called “Fake Emiratisation” schemes are subject to the fines and penalties set out in the Labour Law and the newly adopted Cabinet Decision No. 43 of 2025. “Fake Emiratisation” or “sham employment” commonly refers to the practice of employing UAE nationals on paper only in a bid to circumvent rules for the employment of UAE nationals in the private sector or for the purpose of unlawfully benefiting from government support systems and incentives related to the employment and training of UAE nationals. Offenders are subject to various sanctions, including hefty fines and mandatory repayment of improperly obtained funds. Dubai Courts and Public Prosecution have classified false employment of UAE nationals as a crime against public funds, which may result in criminal prosecution. MoHRE announced in August 2025 that during the first half of 2025, the Ministry had detected 405 fake recruitments to bypass Emiratisation targets in private sector companies.

Companies that violate the Emiratisation requirements could potentially also face company classification downgrades or blocks on their MoHRE account..

5. Which incentives are being provided to compliant companies?
MoHRE grants companies which achieve exceptional Emiratisation quotas membership in the Emiratisation Partners Club. Ministerial Decision No. 438 of 2024 was issued to reorganize the Emiratisation Partners Club and sets out criteria for private sector companies to join the Emiratisation Partners Club. The membership entitles companies to reductions of up to 80 % on MoHRE’s service fees. Additionally, compliant companies are being granted priority in the government procurement system.

Compliant companies also benefit from the Nafis program which is a federal program launched in 2021 to increase the competitiveness of Emirati human resources and to facilitate the recruitment of UAE nationals wishing to work in the country’s private sector or interested in training programs offered by the private sector. The program also offers financial incentives and benefits.

6. What are some compliance tips for companies? 

Emiratisation requirements will likely continue to evolve. It remains to be seen whether Emiratisation targets will be expanded to free zones.

HR professionals need to familiarise themselves with the changing legal landscape given that rather hefty penalties, including fines, are to be imposed in cases of non-compliance with Emiratisation rules. HR professionals may wish to review labour law related information material made available by the relevant authorities, such as the New Employers’ Awareness Kit recently published by MoHRE, and may also wish to attend Emiratisation related workshops held by MoHRE.

In addition to Emiratisation quotas, private sector companies also need to adhere to certain other compliance requirements in the event of hiring and dismissing UAE nationals. For example, when advertising for Emiratisation jobs, companies must adhere to special rules.

It is also important to constantly monitor the legal landscape for Emiratisation related updates. For instance, MoHRE recently clarified that in the event of a sudden resignation by a UAE national (that leads to a drop in the Emiratisation rate) employers have a two-month grace period to replace the resigned UAE national employee before Emiratisation penalties apply.

Filling of required quotas might prove challenging in some sectors also due to a shortage of respective job applications. HR professionals should familiarise themselves with the Nafis program’s digital platform to identify Emirati talent and develop effective recruitment strategies in advance of deadlines.

Affected companies should regularly carry out audits of existing HR policies and guidelines to verify their Emiratisation compliance status and to identify gaps and breaches. To avoid fines and penalties, violations need to be immediately rectified.

Affected companies should also offer regular training to concerned staff, in particular HR teams, to ensure ongoing compliance with regulations and guidelines issued by MoHRE and to mitigate the risks of fines and penalties being imposed. Companies should also consider offering staff training on reporting and inspections.

Companies with operations in the wider GCC-region might also need to ensure compliance with the workforce nationalisation programs in force in other GCC countries (e.g. Saudisation, Omanisation). These companies should familiarise themselves with respective requirements in these jurisdictions prior to making any hiring decisions.

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Emiratisation remains a complex area for many German, Austrian and Swiss companies operating in the UAE Mainland. The FAQs above provide an initial framework to understand the regulatory requirements and assess your company’s position.

If you would benefit from further clarity or wish to discuss your specific situation in a structured manner, we offer a complimentary 30-minute orientation call. This session is designed solely to support your initial assessment and help you determine the appropriate next steps.

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Click here to download the Decision Tree that helps companies quickly identify whether they fall under Emiratisation rules and which FAQ categories are relevant to them.

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Disclaimer:

This FAQ and Compliance Checklist and Decision Tree is provided for general informational purposes only and does not constitute legal advice. The information contained herein is based on UAE laws and regulations as understood at the time of publication and is subject to change without notice.

While every effort has been made to ensure the accuracy and completeness of the information provided, no representation or warranty, express or implied, is made as to its accuracy, completeness, or suitability for any particular purpose. While the authors and publishers have made reasonable efforts to ensure accuracy, they cannot be held liable for any loss, damage, cost, or expense arising from or in connection with the use of or reliance upon this information, except as may be required by applicable UAE law.

Emiratisation requirements are complex and continue to evolve. Companies should not rely solely on this information for compliance purposes. It is strongly recommended that businesses seek specific professional legal and HR advice tailored to their particular circumstances before making any decisions or taking any actions related to Emiratisation compliance. The laws and regulations referenced here may have been amended, repealed, or superseded since the date of publication. Readers should verify current legal requirements with qualified legal professionals and relevant UAE authorities, including the Ministry of Human Resources and Emiratisation (MoHRE).