UAE SMEs face $26,100 fine for not hiring Emirati staff
Small and medium-sized businesses in the UAE face fines if they fail to meet Emiratisation targets this year and in 2025.
The Emirates’ Ministry of Human Resources and Emiratisation (MoHRE) explained that companies employing 20 to 49 workers in key sectors are required to appoint at least one Emirati in 2024 and another in 2025.
Failure to do so will result in a fine of AED96,000 ($26,100) for this year, climbing to AED108,000 ($29,400) the following year.
The 14 sectors covered by the ruling are:
- Information and communications
- Finance and insurance
- Real estate
- Professional and technical activities
- Administrative and support services
- Education
- Healthcare and social work
- Arts and entertainment
- Mining and quarrying
- Transformative industries
- Construction
- Wholesale and retail
- Transportation and warehousing
- Accommodation and hospitality
MoHRE said: “If your company employs 20 to 49 workers and your work engages in one of 14 specific economic activities, you are called to comply with the UAE Cabinet Resolution of the Emiratisation targets expansion.”
The ministry said that the fine of AED96,000 will be imposed in January 2025 if an Emirati national is not appointed in 2024.
Likewise, it also confirmed that a fine of AED108,000 will be imposed in January 2026 if a UAE national is not appointed in 2025.
UAE one of world’s best countries to launch a business
The UAE has been ranked as one of the top countries globally for entrepreneurs to launch a start-up business in 2024, according to new research.
The analysis by Business Name Generator placed the UAE in third position out of 52 nations analysed, revealing it to be an advantageous location for new companies.
To determine the best places to launch a start-up, factors including tax rates, cost of living, WiFi speeds, GDP growth predictions, and happiness scores were assessed.
“Entrepreneurs face many important decisions when launching or expanding their business, and choosing the right location is one of the most crucial. The location of a business can have a significant impact on its success, affecting access to resources, market demand, and competition,” said Linus Näslund, COO for Business Name Generator.
The UAE ranked reasonably for happiness, with a score of 6.6 out of 10, suggesting positive lifestyle benefits for entrepreneurs located there
Näslund said: “Entrepreneurs must carefully consider the economic, demographic, and cultural factors of potential locations. They must also evaluate the legal and regulatory environment, including taxes, labour laws, and zoning regulations, and how these will impact their operations. Ultimately, the decision of where to launch can be a make-or-break factor for success, therefore, is vital for entrepreneurs to weigh up all relevant facets.”
Coming behind only Hungary and the Netherlands, the UAE was highlighted for its extremely competitive 9% corporate tax rate – the second-lowest figure in the study.
The research also forecasted a promising 4% GDP growth for the country in 2024. Paired with its high GDP per capita of $47,663, this indicates a robust national economy beneficial for budding start-up companies.
The research named the Philippines, Italy, and Brazil as the most challenging locations to launch a start-up, due to high taxes and bureaucracy.
Finland was ranked the happiest country for entrepreneurs, with India coming out top for affordable living costs.
Earlier this year, the annual Global Entrepreneurship Monitor (GEM) survey names the UAE as the best place in the world to start a new business. It was named number one for the third year in a row thanks to a big push by the government into cutting-edge technology in its efforts to diversify away from oil.
Four out of the top five countries in the GEM rankings were in the Middle East or Asia, with India second, Saudi Arabia third and Qatar fifth – the only exception being Lithuania in fourth place.
The GEM report said that the UAE had made steady progress, progressing from fifth on the list in 2019 to the top spot. Saudi Arabia has risen from 17th to third, while India is up from sixth to second.
