In recent years, the UAE and the broader Middle East region have been actively pursuing workforce localisation initiatives to reduce reliance on foreign labour and enhance employment opportunities for their national populations. This trend reflects a broader strategy across several GCC (Gulf Cooperation Council) countries, including Kuwait, Saudi Arabia and Egypt, to boost national employment and develop local talent.
Here’s a comprehensive update on Emiratisation and similar efforts in the region, along with key considerations for setting up businesses in the GCC.
UAE
The UAE has spearheaded efforts to increase the number of Emiratis in the workforce through its Emiratisation programme. Recent updates have seen the introduction of requirements with regard to quotas for Emirati employees in various sectors, which increase 2% year on year, alongside increased incentives for companies that prioritise hiring and training Emirati talent. The Ministry of Human Resources and Emiratisation (MOHRE) continuously monitors and enforces these quotas. New policies have also focused on enhancing the skills of Emirati workers through targeted training and education programmes, particularly in high-demand industries such as technology and finance.
Saudi Arabia
Saudi Arabia’s counterpart to Emiratisation is the Saudization programme, part of the Vision 2030 initiative. This programme sets specific targets for Saudi nationals in various sectors, especially those with high levels of expatriate employment. Recent updates include introducing a more robust monitoring system to ensure compliance and imposing fines for non-compliance. The Saudi government has also expanded its efforts to include additional sectors and offer increased support to local businesses that hire and train Saudi employees.
Oman
In Oman, the Omanisation initiative seeks to ensure employment opportunities for Omani nationals and mandates that businesses hire a certain percentage of their workforce from the local talent pool. This aims to reduce reliance on international labour and provide opportunities for its citizens, strengthening the local workforce and boosting the country’s economic independence.
Kuwait
Other regional countries such as Kuwait have implemented the Kuwaitization programme, which similarly aims to increase the proportion of Kuwaiti nationals in the workforce. Recent policy shifts have involved more stringent regulations and requirements for private sector companies. The government has also launched initiatives to improve the skills and employability of Kuwaiti youth, aligning educational outcomes with market needs.
Egypt
Egypt’s approach to workforce localisation is somewhat different. It focuses on broad national employment strategies that include substantial investment in education and vocational training. The government has introduced policies to encourage private sector investment in local talent development, with specific programmes targeting youth employment and entrepreneurship.
Tips for setting up business in GCC
Each GCC country has its own regulatory framework for business operations, which often includes specific requirements for establishing businesses and labour laws. Recent reforms in Saudi Arabia allowed for greater foreign investment but still required adherence to local Saudization requirements. Kuwait and other GCC countries have specific legal structures and requirements for establishing businesses, often including mandatory local partnerships or sponsorships.
Understanding local labour laws is crucial for setting up a business. The UAE, for example, has specific regulations concerning ‘Emiratisation’, while Saudi Arabia and Oman have comparable regulations under ‘Saudization’ and ‘Omanisation’. Companies must navigate these requirements carefully to avoid penalties and ensure compliance with national workforce localisation policies.
Similarly, respect for local business practices and requirements is essential for successful GCC operations. This includes familiarising oneself with local customs, communication styles, and business etiquette. Building strong relationships with local partners and stakeholders can significantly impact business success.
It is key for establishing foreign businesses to stay informed about economic trends and market conditions in the GCC. The region’s economies are diverse, with different countries experiencing various growth rates and sectoral demands. Understanding these dynamics can help businesses make informed decisions and identify opportunities.
More recently, many GCC countries have offered incentives to attract foreign investment, such as tax breaks, grants, and subsidies. It is important to explore these opportunities and understand how they can benefit your business.
The progress in Emiratisation and similar workforce localisation initiatives across the GCC reflects a broader commitment to enhancing local employment and reducing reliance on expatriate labour. Understanding the local regulatory environment, legal requirements, and cultural nuances is crucial for businesses looking to establish themselves in the region. By staying informed and adaptable, businesses can navigate these complexities and leverage the opportunities presented by the evolving economic landscape in the GCC.
