Indigenization: Private Companies in UAE Begin Preparations

Abu Dhabi: Steps related to the implementation of indigenization in the UAE.  Private companies started in  According to the laws of the country, the appointment of natives has started in the banking sector, hospitality, real estate and other sectors.  As the year draws to a close, inquiries about appointments have also increased, officials of various consultancy firms have revealed. 

Heavy fines will be imposed on private firms that fail to implement the prescribed indigenization within the time frame.  According to the revised law, all private sector firms employing more than 50 people must set aside two percent of their total workforce for indigenous people every year as their highly skilled workforce.

 Firms that do not employ as many expatriates as required by law will be required to pay an annual fine of Dh72,000 in the first year for each unhired expatriate employee.  The penalty will increase from the second year onwards.

 The law states that it will increase by 12,000 dirhams each year.  Firms that do not implement indigenization in 2022 will have to pay a fine when submitting their accounts next year.  Incentives will also be given to institutions that employ more than a certain percentage of natives.

Though the process of indigenization has been going on, they have mainly targeted government, semi-government and public sector institutions.

 However, at the beginning of this year, the Ministry of Human Resources and Indigenization has set a target of increasing the representation of indigenous employees in the private sector to 10 percent within the next five years by including two percent indigenous people each year.  At the same time, many expatriates who are insecure in their jobs due to Covid are worried about how the new policies will affect them.