United Arab Emirates

New classification system for companies to be implemented

31 May 22

UNITED ARAB EMIRATES

IMPACT – MEDIUM

The Emirati government has announced that it will begin classifying private companies into three tiers based on their compliance with directives.

Key Points:

  • Beginning June 1, private companies will be categorized into three tiers depending on how they meet law and wage protection requirements, protect workers’ rights and promote diversity.
  • Work permit costs will be determined by the company’s classification.
  • Companies will be classified as Tier 1 if they meet certain criteria, including:
    • Raising the Emiratization rate at least three times above the target.
    • Training at least 500 UAE nationals annually.
    • Being a business owned by a young UAE national.
    • Being a training center that promotes cultural diversity.
    • Being active in targeted sectors and activities determined by Emirati authorities.
  • Information regarding criteria for Tier 2 is available here and for Tier 3 here.

Additional Information: More information regarding the UAE’s new classification system is available here.

BAL Analysis: Employers should check their Ministry of Human Resources and Emiratization (MOHRE) profile on June 1 to determine their tier level.

This alert has been provided by the BAL Global Practice group. For additional information, please contact berryapplemanleiden@bal.com.

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