Dubai: Companies that abide by the UAE’s labour law, Wage Protection System, workers' rights protection and have higher Emiritisation rates can benefit from an 80 per cent reduction in fees for government services. The benefits you get as a business owner depend on the classification under which your company falls.
So, if you are an entrepreneur or business owner in the UAE, you would need to check your company’s classification with the Ministry of Human Resources and Emiratisation (MOHRE). MOHRE first introduced the company classification system in May 2022 and the classification system came into effect this month.
What exactly is a company classification and how can you check which category your company falls under? Here is all you need to know.
How does the company’s classification impact the employer?
MOHRE has classified companies in the UAE based on their compliance with the UAE’s Labour Laws, the Wage Protection System and the establishment’s Emiritisation rates and have been divided into three categories. The three company classifications as per MOHRE are:
First Category
A company that abides by the UAE Labour Law and its resolutions, aside from fulfilling one of the following criteria:
Raise Emiratisation rate at least three times above the target. (In May this year, the UAE Cabinet approved increasing the Emiratisation rate to 2 per cent annually from high-skilled jobs in establishments that employ 50 workers or more. The step aims at creating more than 12,000 job opportunities annually for citizens in all economic sectors.)
- Cooperating with the ‘Nafis’ programme, to train at least 500 citizens annually.
- Being a venture owned by a young citizen according to approved standards.
- Being one of the training and employment centres that promote cultural diversity in the UAE.
- Being active in the targeted sectors and activities determined by the Council of Ministers based on the ministry's decision.
Second Category
A company is defined as a second category if it abides by the following standards set by MOHRE:
- Policies related to UAE’s labour law and its executive regulations.
- Decisions issued by MOHRE regarding work permits, employment contracts and their compliance with wage protection system.
- The company’s commitment to implementing the Workforce Planning Policy for promoting cultural diversity in the UAE.
A company is automatically classified within the second category, according to MOHRE, if it complies with the laws and policy of promoting cultural and demographic diversity in the UAE.
Companies in the second category benefit from discounted government service fees related to work permits and transfer fees not exceeding Dh1,200 for two years.
For in-depth breakdown on the definition of each classification, read our detailed guide here.
Third Category
The third category is for companies found violating the Labour Law and executive regulations, and the standards for protecting labour rights. Some of the violations highlighted in the ministerial resolution are:
- Human trafficking.
- Using or recruiting workers without obtaining work permits.
- Providing incorrect data, documents, or information to the Ministry.
- Violating obligations on workers' wages, housing, and safety standards.
- Resorting to fake Emiratisation practices.
Companies in the third category will be penalised by MOHRE and the establishment will not benefit from any incentives for fee discounts.
To read how work permit costs can vary based on which category your company falls under, read our detailed guide here.
How to find your company’s classification in the UAE
You can check your company’s classification using the mobile application ‘MOHRE UAE’, which is available for both Android and Apple devices.
- Download the ‘MOHRE UAE’ app.
- Create an online ‘employer’ account with MOHRE, if you don’t already have one. To create a new employer account, tap on the ‘sign up’ button on the homepage of the app, and choose ‘employer’. Next, enter your Emirates ID and company registration details.
- Once you have set up your account, log in using your credentials.
- Next, click on the menu option on the dashboard of your profile and choose ‘Establishments’
- Select your establishment. You will then be transferred to the ‘Establishment Profile’ section.
- Next, click on the ‘information’ tab. You will then be able to see all the details of your company such as your contact details, number of employees and licence number.
- The company’s classification is the first thing you will be able to see under the information category. It is titled as ‘CLASS’ and will state the number one, two or three.
