Key takeaways
- A company licensed only in a UAE free zone is, according to law-firm commentary on the rules, outside the MOHRE Emiratisation quota; the quota is aimed at private employers registered with the Ministry of Human Resources and Emiratisation (MOHRE).
- MOHRE's 2026 target for private companies with 50 or more employees is a 2% increase in Emiratis in skilled roles over the year, split into 1% per half-year, with the first half ending on 30 June 2026.
- A company that misses the target and is covered by the rules pays AED 10,000 a month (AED 120,000 a year) for each unfilled Emirati position, with fines applied from 1 July for a first-half shortfall.
- A company holding both a free zone licence and a mainland licence should expect its mainland entity, which is registered with MOHRE, to be assessed on its mainland headcount.
- The free zone exemption is not stated on the official u.ae or MOHRE pages we checked, so each free zone company should confirm its position in writing with its free zone authority.
Do free zone companies have Emiratisation targets?
Generally no: the mandatory MOHRE quota applies to private employers registered with MOHRE, and law-firm commentary says free zone companies sit outside it. Al Tamimi & Company states the rules do not apply to "free zone companies and MOHRE exempt companies", though exempt companies may join the Nafis programme voluntarily. Hadef & Partners makes the same point, saying the measures apply to onshore UAE companies governed by MOHRE.
One caveat matters. The official u.ae and MOHRE pages we reviewed describe the targets without mentioning free zones either way, so the exemption rests on legal commentary dated 2022 rather than on a line in the Cabinet resolution we could quote. Treat it as the working position and confirm it with your free zone authority before you rely on it.
Which UAE companies do the MOHRE Emiratisation targets cover?
The targets cover private sector companies with 50 or more employees, plus a smaller group of companies with 20 to 49 employees in 14 listed sectors. MOHRE checks compliance every year, and the sector list for smaller companies is published on u.ae.
| Company size | Who is covered | Requirement | Source |
|---|---|---|---|
| 50 or more employees | Private sector, MOHRE-registered | 2% annual increase in Emiratis in skilled jobs, 10% cumulative by 2026 | u.ae, MOHRE |
| 20 to 49 employees | 14 listed sectors (including professional services, real estate, manufacturing, construction, retail and hospitality) | At least one Emirati hired by end of 2024 and a second by end of 2025 | u.ae |
| Fewer than 20 employees | Not covered by the quota in the sources checked | None stated | u.ae |
Accurate as of 22 October 2026. The full 14 sector list is on the u.ae Emiratisation page; check it before assuming your activity falls outside it.
What are the Emiratisation fines for 2026?
For companies with 50 or more employees, the fine reported from MOHRE's June 2026 statement is AED 10,000 a month, or AED 120,000 a year, for each Emirati position left unfilled against the target. A first-half shortfall is fined from 1 July.
| Category | Target | Fine | Date |
|---|---|---|---|
| 50 or more employees | 1% increase in skilled Emiratis per half-year (2% a year) | AED 10,000 a month per unfilled position (AED 120,000 a year) | Applies from 1 July 2026 for the first-half target |
| 20 to 49 employees (listed sectors) | One Emirati by end of 2024 | AED 96,000 | January 2025 |
| 20 to 49 employees (listed sectors) | Two Emiratis by end of 2025 | AED 108,000 | January 2026 |
Accurate as of 22 October 2026. Check the current figures on the MOHRE site before you budget, because the contribution amounts have risen each year.
AED 120,000: the yearly fine for each Emirati position a covered private company leaves unfilled against its target (AED 10,000 a month), as reported from MOHRE's statement on the 2026 deadlines. Source: MOHRE statement reported by Gulf News, 22 June 2026, checked 22 October 2026.
Do dual licence companies have to meet Emiratisation targets?
A company holding both a free zone licence and a mainland licence should assume its mainland entity is assessed, because that entity is registered with MOHRE and employs people under mainland permits. This is our reading of the MOHRE scope rather than a quoted rule, and the way headcount is split between the two entities can change the result.
Say a Sharjah free zone consulting company opens a mainland branch with 60 staff on MOHRE work permits while its free zone entity keeps 15. The 60 are the headcount MOHRE would look at; the 15 would not be. If your employees sit across both licences, ask your PRO or adviser to confirm which entity carries each contract before the next half-year deadline.
How do I check whether my company must meet the Emiratisation targets?
Check three things in order: which authority issued your licence, which authority registered your employees, and how many people you employ. The steps below work through them.
- Look at your trade licence: a mainland licence from a Department of Economic Development means MOHRE applies; a licence from a free zone authority points the other way.
- Check where your work permits are issued: MOHRE work permits suggest mainland employment, while free zone authority permits suggest the exemption.
- Count your employees on MOHRE permits, because the 20 and 50 headcounts decide which rule applies.
- Ask your free zone authority, in writing, whether MOHRE Emiratisation quotas apply to your licence type.
- Log the half-year dates in your calendar: MOHRE's 2026 notice set 30 June as the first-half deadline, and the 2% annual target is split equally across two halves, so expect a second deadline at year end.
If you'd rather not track these dates by hand, the free UAE compliance calendar is a calendar of your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
What most guides don't tell you
- Headcount can trip you across the line. A free zone company that adds a mainland licence for local clients can bring the mainland entity into scope before anyone thinks of it as an Emiratisation case. The 20 and 50 thresholds are counted on the MOHRE-registered workforce, so each new mainland hire matters.
- The free zone exemption is commentary, not a quoted clause. The sources that state it are law-firm summaries from 2022. The amounts have changed every year since, so a written answer from your free zone authority is worth more than a general assurance from a setup agent.
- Fake hiring is treated as a violation. MOHRE has described circumventing the targets with fake Emiratisation as a serious labour market violation and has promised legal action. Hiring an Emirati on paper to stay under the fine is a riskier route than paying the contribution.
- Free zone companies can still hire Emiratis. Al Tamimi & Company notes that companies exempt from the quota may join Nafis, the federal programme for Emirati private sector employment, voluntarily.
Which deadlines apply to your company?
Emiratisation, VAT, corporate tax and licence renewals each run on different dates, and the right set depends on your licence type and headcount. The free calendar of your company's UAE tax and compliance deadlines is personalised from a few questions and comes as a PDF and calendar file: get your UAE compliance calendar.
Frequently asked questions
What is the Emiratisation requirement for private companies?
Private companies with 50 or more employees must raise the number of Emiratis in skilled roles by 2% a year, with a cumulative 10% target by 2026. Companies with 20 to 49 employees in 14 listed sectors must hire at least one Emirati, with a second required by the end of 2025.
What are the fines for not meeting Emiratisation quotas?
For companies with 50 or more employees, MOHRE has reported a fine of AED 10,000 a month (AED 120,000 a year) for each unfilled Emirati position, as of June 2026. For listed sector companies with 20 to 49 employees, u.ae gives AED 96,000 for the 2024 hire and AED 108,000 for the 2025 hire.
What is the UAE unemployment insurance scheme and is it mandatory?
The UAE unemployment insurance scheme gives financial support to Emiratis and residents in the federal and private sectors who lose their jobs through termination by their employer, according to u.ae. The page we checked does not state premiums or penalties, so confirm the current subscription rules and costs on the scheme's official portal.
About Qawi
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- u.ae: Employing Emiratis in the private sector
- MOHRE: Emiratisation targets
- Gulf News: MoHRE warns UAE firms ahead of Emiratisation deadline, 22 June 2026 (reporting a MOHRE statement)
- u.ae: Unemployment insurance scheme
- Al Tamimi & Company: UAE to introduce fines for failure to comply with the Emiratisation quota (law-firm commentary, used for the free zone position)
- Hadef & Partners: Emiratisation, act don't react (law-firm commentary, used for the free zone position)
Last checked: 22 October 2026
This is general information, not tax or legal advice for your specific situation.