Emiratization program aims to boost local hiring in three industries

IMPACT – HIGH

What is the change? The UAE is planning to introduce an “Emiratization” program that focuses on increasing the hiring of local workers in three key industries: communications, construction and real estate development, and transportation and aviation.

What does the change mean? The three sectors constitute nearly 30 percent of the country’s gross domestic product and the Ministry of Human Resources plans to promote hiring of Emeratis in 300,000 jobs.

• Implementation time frame: Ongoing.
• Visas/permits affected: Work permits.
• Who is affected: UAE employers, particularly in the three sectors.
• Business impact: Employers who rely on foreign workers in the three targeted sectors may face new rules to encourage them to hire Emiratis.

Background: One of the proposed strategies to increase hiring of local workers is to offer “platinum club” employers incentives, such as a steep reduction in work permit renewal fees, if they increase their ratio of Emiratis to foreigners.

BAL Analysis: Though detailed plans have yet to be released, companies should anticipate new restrictions on hiring foreign workers in the three sectors, as well as incentives if they hire more locals. The move to localize the workforce is a trend across Gulf Cooperation Council countries; however, the UAE will be careful in implementing the Emiratization program and mindful of the wider business context and potential regional economic downturn, as it does not want to see companies leave the UAE or deter foreign companies from investing in the UAE.

This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.

Copyright © 2018 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.