Thursday, August 04, 2005

Companies employing nationals to pay less in fees :: GN

Some more details are emerging on the incentives to meet Emiratization goals. Quoting Gulf News:
Ahmad Kajour, Assistant Undersecretary for Planning at the Ministry of Labour and Social Affairs, told Gulf News companies which were not bound by emiratisation would be included in Category A if they employed a UAE national. This will qualify them to pay less on official transactions and exempt them from bank guarantees for each worker.

Kajour said banking and insurance sectors and companies employing more than 50 people all have emiratisation targets set by the UAE Government they must meet.

"To get into Category A they must show they've reached their goals. We won't reward companies that don't," he said.

Banks must employ UAE nationals at a cumulative rate of four per cent a year, insurance firms must employ UAE nationals at a rate of five per cent a year, and companies employing 50 workers or more must employ UAE nationals at a rate of two per cent a year.

"They [the company] have to prove they hired a UAE national for six months before he will be considered employed," he said.

Kajour said companies had to show the Ministry a UAE pension fund certificate proving they have paid into it for six months per UAE national worker.
I wonder if what companies pay into the UAE pension fund for nationals more than offsets what they save in fees by meeting targets.
I had thought that the government had eliminated the requirement that companies make these payments; perhaps they were reduced but not eliminated. They do create a disincentive to hire an Emirati over an ex pat.



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