Emiratisation is the country’s national programme to increase the participation of the UAE’s national citizens in the workforce of the UAE and is one of the most important social and economic policies within the country. From a strategic perspective, Emiratisation helps to create a sustainable economy that is less dependent on expatriate labor and more reliant on indigenous knowledge, leadership and innovation.
UAE national employees are subject to a different legal and regulatory framework that includes additional employment, pension, insurance and termination considerations that employers need to navigate carefully. Non-compliance with Emiratisation targets is not treated lightly. The penalties are financial, operational, and reputational — and they have grown stricter each year since the programme launched. Companies that establish compliant onboarding, contract drafting and workforce management procedures right from the start are in a stronger position to mitigate legal exposure and formulate enduring strategies for nurturing local talent.
Understanding Emiratisation (Nafis) Obligations
Launched in September 2021, Nafis is a federal programme designed to bring more UAE nationals into private sector jobs. It sits under the Emirati Talent Competitiveness Council (ETCC) and was introduced as part of the UAE’s “Projects of the 50,” a package of national initiatives marking the country’s 50th anniversary. The government backed it with a budget of AED 24 billion over five years — roughly USD 6.5 billion — with a target of placing 75,000 Emiratis in private sector roles by 2025 and raising the Emirati share of private sector employment to 10%.
Earlier this year, the UAE announced that Nafis would be extended from its original five-year window to run all the way through to 2040. A revised framework will take effect from September 2026 for new beneficiaries, with existing participants transitioning gradually over up to three years. These include better salary support, more family benefits and more incentives to improve retention and career development for UAE national employees.
Which Companies Are Subject to Emiratisation Requirements?
Under current UAE regulations, Emiratisation obligations primarily apply to mainland private sector companies employing 50 or more workers in skilled roles. Free zone companies are generally not subject to mandatory Emiratisation quota requirements.
Employers subject to the quotas must increase the number of UAE nationals in skilled positions by prescribed annual percentages. These targets are monitored by MOHRE and assessed periodically throughout the year.
Current Emiratisation Targets
Current quota requirements apply as follows:
- Companies with 50 or more employees must increase the number of UAE nationals in skilled roles by 2% annually, with an 8% target by end-2025 and 10% by end-2026. Compliance is assessed on a semi-annual basis, not only at year-end.
- Companies with 20 to 49 employees operating in 14 designated sectors (including finance, real estate, and information technology) must hire at least one UAE national by end-2024 and retain or add a further one by end-2025.
Employers subject to quotas must actively monitor:
- headcount thresholds and any mid-year changes;
- skilled worker classifications within their workforce;
- national employee ratios against required targets; and
- workforce turnover, which can affect quota calculations and trigger replacement obligations.
Since May 2025, MOHRE has clarified that employers are given a two-month grace period to replace a UAE national who resigns, and that temporary or project-based Emirati hires may count towards quotas in certain circumstances.
Penalties for Non-Compliance
MOHRE has significantly increased enforcement activity in recent years. Companies failing to meet targets face:
- for companies with 50 or more employees: monthly fines per unfilled Emirati position, starting at AED 6,000 per national and increasing by AED 1,000 each year until 2026;
- for companies with 20 to 49 employees in designated sectors: a financial contribution of AED 96,000 per UAE national not hired in 2024 (collected from January 2025), rising to AED 108,000 for the 2025 cycle (collected from January 2026);
- restrictions on work permit issuance;
- downgrading within MOHRE’s establishment classification system; and
- increased inspection and regulatory scrutiny.
Fake Emiratisation is treated as a separate and more serious offence. This refers to companies that put UAE nationals on their payroll in name only — so-called “ghost employees” — to meet quotas without genuinely employing them. The Ministry of Human Resources and Emiratisation has referred companies to the Public Prosecution for this practice. Fines for fake Emiratisation range from AED 20,000 to AED 100,000 per employee involved in the arrangement. The ministry has also deployed AI-based monitoring tools to detect such practices. For many employers, the compliance risk lies not only in failing to hire UAE nationals, but also in improperly structuring employment arrangements after hiring.
The Employment Contract — What’s Different?
UAE Labour Law Framework
Employment relationships in the private sector are governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations and its amendments, most recently Federal Decree-Law No. 9 of 2024 (effective 31 August 2024). All private sector employment contracts must now be fixed-term. The previous distinction between limited and unlimited contracts has been abolished, and any legacy unlimited contracts were required to be converted within the statutory transitional window.
While the Labour Law applies to both UAE nationals and expatriates, there are important practical and regulatory distinctions that arise when employing UAE nationals.
Tailored Contract Drafting Matters
Many employers use standard expatriate employment templates when hiring UAE nationals. This commonly results in gaps relating to:
- GPSSA pension provisions;
- Emiratisation-linked obligations;
- statutory leave entitlements;
- notice procedures; and
- regulatory reporting requirements.
Tailored drafting is particularly important for senior UAE national hires, employees in management roles, and positions in regulated sectors. Given the September 2026 changes to Nafis, contract templates should also be reviewed to reflect the shift in pension contribution responsibility from that date.
GPSSA Contributions vs. EOSB
UAE Nationals Are Not Entitled to Standard EOSB
One of the most significant differences between employing expatriates and UAE nationals relates to end-of-service benefits. Expatriate employees are generally entitled to an end-of-service gratuity (EOSB) under the Labour Law. UAE nationals working in the private sector are instead covered by the UAE pension regime through the General Pension and Social Security Authority (GPSSA).
The governing pension legislation is Federal Law No. 57 of 2023, which applies to UAE nationals entering the workforce from October 2023. Federal Law No. 7 of 1999 continues to apply to employees who were already registered with GPSSA prior to that date. Employers should confirm which law applies to each employee.
Only UAE nationals who hold a family book are eligible for GPSSA enrolment. Those who are ineligible remain entitled to standard EOSB under the Labour Law. Abu Dhabi-based UAE nationals are enrolled through the Abu Dhabi Retirement Pension and Benefits Fund (ADRPBF) rather than GPSSA. Employers should confirm the applicable scheme based on the employee’s emirate of registration.
GPSSA Contribution Structure
Under Federal Law No. 57 of 2023, total monthly contributions are set at 26% of the employee’s contribution account salary, allocated as follows:
- Employee contribution: 11%;
- Employer contribution: 15%; and
- Government contribution: 2.5% (paid by the federal government as an incentive for private sector hiring of nationals).
The contribution account salary in the private sector is based on the gross salary stated in the employment contract, inclusive of all allowances, and must not fall below AED 3,000 or exceed AED 70,000 per month. Contributions are payable between the 1st and 15th of each month.
Note: From September 2026, the government’s 2.5% contribution under the Nafis framework will cease and employers will assume full responsibility for their 15% share independently. Payroll systems should be updated accordingly ahead of that date.
Common Employer Mistakes
Compliance failures are common among employers hiring UAE nationals for the first time. Typical issues include:
- late employee registration with GPSSA;
- incorrect contribution salary calculations;
- failure to report salary changes;
- missed or late monthly payments; and
- misclassification of allowances.
These errors can result in retroactive liabilities, penalties, and disputes with regulators and employees. Employment contracts, payroll systems, and HR processes should all be aligned with GPSSA requirements from the date of hire.
ILOE — Mandatory Insurance Requirements
The UAE’s Involuntary Loss of Employment (ILOE) insurance scheme is mandatory for most employees in the private sector, including both UAE nationals and expatriates. The scheme provides eligible employees with temporary financial support if they lose employment involuntarily, subject to statutory conditions and exclusions. Failure to comply with ILOE requirements may expose employees to penalties and complicate workforce administration processes.
Termination — Heightened Considerations for Employers
While the Labour Law permits termination for legitimate business reasons, dismissals involving UAE nationals attract particular scrutiny from MOHRE in light of the broader Emiratisation framework. A termination is more likely to be challenged where:
- there is no documented legitimate reason for the dismissal;
- the employer replaces a UAE national with a non-national without adequate justification;
- the employee is dismissed shortly after raising a legitimate complaint against the employer; or
- proper termination and exit procedures are not followed.
Since Federal Decree-Law No. 9 of 2024, the limitation period for filing a labour dispute has been extended to two years from the date of termination (previously one year). This significantly increases the window within which claims may be brought and reinforces the need for thorough documentation throughout the employment relationship. Employers should maintain clear employment records, including:
- written warnings and disciplinary correspondence;
- performance improvement plans; and
- KPI, attendance, and appraisal records.
Companies must also comply with notice obligations, final salary and leave payment timelines, and GPSSA deregistration requirements when terminating UAE national employees. Poorly managed terminations can result in compensation claims, regulatory complaints, and increased scrutiny from MOHRE.
Conclusion
The pace of legislative and policy change has been substantial — with significant amendments in 2023, 2024 and the forthcoming September 2026 Nafis changes — and further developments are expected as the programme moves toward its 2040 horizon. HR policies, employment contracts, payroll systems, and internal compliance procedures should be reviewed regularly against current requirements.
Employing UAE nationals involves obligations that extend well beyond meeting Emiratisation headcount targets. Employers must ensure employment contracts are properly drafted, pension registrations are completed and kept current, ILOE subscriptions are maintained, and termination procedures comply with applicable law. Hiring Emirati talent for the first time? Make sure your employment documentation and compliance processes are fully in order. Contact Kisser Legal’s Employment and Labour Law team.