Deploying Talent to the UAE: Entity Structure, Emiratisation, and Workforce Strategy

Grace Shie: Welcome to The Inside Track. My name is Grace Shie and I lead Mayer Brown's Global Mobility Practice. Today I'm joined by my partner Jad Taha from our Dubai office. Welcome, Jad. 

Jad Taha: Thank you, Grace. Good to be with you. 

Grace Shie: The UAE is a top destination for global companies and certainly clients. And together, Jad and I have helped many companies across a variety of industries deploy expat employees to the UAE. But what has surprised employers when they're new to the region or to the UAE is that corporate establishment decisions, location, all very much matter for how an expat employee can be sponsored and deployed in country. So I've invited Jad today to help demystify some of those concepts and to explain how those structural decisions can impact mobility programs. So just kick us off today, Jad, let's talk, let's provide some basic context as to how the UAE is structured and why an an employer's location matters. 

Jad Taha: Sure, Grace. Thank you very much. And thank you again for the opportunity to be with you today. It's a pleasure. And certainly always a pleasure to speak about the region and the UAE in particular. It's a very dynamic jurisdiction. So the first thing to understand is that the UAE is not one single jurisdiction. It's actually a federation of seven emirates. And for most international businesses, the two that are most commonly referred to are Dubai and Abu Dhabi. These are the principal commercial centers, financial centers where a lot of the action is. But of course, there's also the Emirates of Sharjah, Ajman, al-Kawayn, Ras al-Khaimah that you often hear about on the international stage as well, and Fujairah. Now, when international business is set up in the UAE, they typically do so either on the mainland, so mainland Dubai or mainland Abu Dhabi or in one of the many free zones across the UAE. And the UAE has quite a few of those. Two free zones that are of particular significance to our clients and ones that come up a lot in the international mobility space are the DIFC, or the Dubai International Financial Center, and the ADGM, or the Abu Dhabi Global Market. And here's why all of this matters for employers. Where you set up your entity affects everything. It determines which licensing authority you deal with, which employment framework governs your workforce, and what process you follow for employment permits and residence visas. It's really foundational. So the key takeaway for multinational employers is don't approach the UAE as if it's a single, completely uniform jurisdiction. The reality is more nuanced than that, and getting the structure right at the outset can save a lot of headache down the road. 

Grace Shie: So it sounds like if a client says, I need to send employees to our new offices in Dubai, knowing that a client is establishing in Dubai is not enough because they might be in mainland Dubai, as you just explained, or they might be at the DIFC. Is that right? 

Jad Taha: That is correct. So one of the first things that we ask clients to provide at the outset of any instruction is a copy of their trade license or commercial registration license and that would typically reflect the jurisdiction where their subsidiary or branch is registered and on that basis we will be able to determine the relevant regulations and regulators involved in the particular employment context that they're asking about. 

Grace Shie: So let's also talk about the concept of Emiratisation. That's a term that doesn't necessarily come up in other jurisdictions or sort of parallel terms, if you will, but it certainly does for the UAE. And you know, for those who are not familiar with the concept, what is Emiratisation and which employers are, would you consider most affected by that? 

Jad Taha: Yeah, great question. And it's one that's really important to get right. So at its core, Emiratisation is the UAE's national policy aimed at increasing the participation of UAE nationals or Emiratis in the workforce and we're not just talking about any positions here. The focus is particularly on skilled private sector roles and I want to emphasize this. A lot of clients ask us this question at the outset with respect to Emiratis quantization queries. This is not just a general diversity aspiration or a soft target. For qualifying employers, we're talking about measurable hiring targets that carry real consequences if you don't meet them. So practically speaking, companies with 50 or more employees are generally required to increase the number of Emiratis they employ in skilled positions on an incremental basis. And the current milestone, which is very much front and center and front of mind for employers at the moment, is a further 1 % semi-annual increase by 30th of June, 2026. And it's worth noting that it doesn't stop at the larger companies. Certain businesses with between 20 to 49 employees in designated economic sectors across the UAE may also be subject to these Emiratisation hiring requirements. And are some, you know, there's a list of sectors that's relevant in this respect. You know, you can go from financial, the financial sector, the real estate sector, some tech sectors in particular, and the list goes on. So for any employer operating in the UAE, there are a few critical things you need to get your, you need to sort of get your head around in terms of the framework and how it operates in the country. Whether their entity falls within the relevant regime, which employees and positions actually account, how the target is calculated, the applicable reporting or registration requirements when it comes to Emiratisation, and the consequences of noncompliance. And I think the most important piece of advice I can give to clients is treat Emiratisation as an ongoing workforce planning obligation. Don't think of it as a compliance box you take right before a deadline or a one and done type requirement. It really needs to be woven into your broader HR and talent strategy across the year. 

Grace Shie: So if I understand correctly, foundationally it's about the employment of local nationals within the enterprise with certain metrics that correspond to size of the company. So does that mean the metrics or the targets? And I heard you say it's not soft targets, it's you know measurable targets. Do those targets change? Are they adjusted by the government vis-a-vis the number of expats or foreign nationals the employer wants to bring into the company in the UAE? 

Jad Taha: That is correct. So the main regulator across mainland UAE, if we take mainland UAE as a jurisdiction on mainland Dubai, Abu Dhabi or any of the other Emirates, anything outside of free zones, the main regulator is the Ministry of Human Resources and Emiratisation, what's known as MOHRE or MOHRE. And MOHRE issues these Emiratisation requirements and targets with respect to that apply to businesses of certain sizes and certain sectors. And those targets are very much a moving target. And it's an ongoing obligation of employers to monitor the latest requirements that are being issued by MOHRE when it comes to Emiratisation. In the past, I would say five or six years ago, Emiratisation was less of a concern in the private sector more focused on public sector type roles. It was mainly a mandate initially designed as a mandate by the federal government of the UAE to impose certain requirements on public sector type companies, public companies or quasi government, government or quasi government companies to employ more Emirati nationals, employ and train those nationals. It shifted in the last four or five years to the private sector. And that number, as I mentioned earlier, has been incrementally increasing across the board, across sectors and size of. 

Grace Shie: I think that's it important for our client base because as you know, we represent so many multinational employers. And so for them, intra-company transfers or the ability to transfer someone from New York headquarters to Dubai or their London head office to Abu Dhabi is important for the cross-fertilization of ideas, cross-skills training, or sometimes it's an international opportunity for the employee, or it it's it an executive that needs to build out the company's presence in the region. And so when the company has to factor in Emiratisation and these types of factors as part of that mobility decision, it that's that can be new for for clients who don't typically have to consider this type of scheme. 

Jad Taha: That is correct. It's important to recognize the comparison between places like the US and the UAE when it comes to when it comes to Emiratisation in particular. And the approach differs quite significantly across these jurisdictions. In the US, for example, we don't generally impose numerical localization targets across the private sector. And that's a really interesting comparison to draw because both systems, if you think about it, are trying to achieve something similar. Both are in their own way, trying to protect or develop opportunities for the domestic workforce. The US has its own approach and the UAE has its own unique approach with Emiratisation and so the mechanisms are quite different. And in the UAE, the model I would say is more direct. It can impose affirmative and measurable localization obligations. These are not, as I mentioned earlier, kind of a tick the box. We've hired Emirati, a certain number, and we're good to go for the year. But it's also about identifying suitable roles, developing talent pipelines, planning for succession and training, making sure all of that is aligned within the international recruitment needs of the particular business. And it's really important to demonstrate that as a compliance measure with the Ministry of Human Resources in the UAE. 

Grace Shie: It's an interesting comparison to make to the US because first, you know, we have the national system or the federal system it isn't by for example, if you send an employee from the UAE to New York or and then a second employee to California, the immigration process, the work visa sponsorship process is going to be the same. It's not state specific. Whereas in contracts, sending an employee to Dubai or to Abu Dhabi, you've just explained, can result in different workflows when it comes to visa sponsorship. And then in terms of quotas, you're right. You know, if for the H-1B, for the L-1, for the E-category, there are different visa categories where an employer is required to disclose the number of visa holders versus local nationals. And even that is a little bit it sounds a little bit broader definition than in the UAE, but it isn't necessarily a mandated measurable target to meet in order to be able to sponsor. So it's an important distinction and one that employers need to be aware of, you know, if they're operating, for example, in these two jurisdictions. Then let's, you know, let's talk a little bit about filings on the mainland and contrast that with filings at either the DIFC or ADGM. Because I again some recent clients who are just newer to the UAE have been surprised that the filing process and the requirements would be different in Dubai if they're on the mainland or if they're at the DIFC. And so that can cause confusion. Just said at the at the outset, we you know gather all the corporate documents so that we can advise clients at the outset as to the requirements that flow. what is the difference between sponsoring personnel through the regular mainland authorities and those regulators and doing so through either the DIFC or the ADGM? 

Jad Taha: Sure. So let's start with mainland employers. So if you're a mainland employer, meaning you're established outside of a free trade zone, you'll generally be dealing with the relevant federal and emirate level authorities. And there are a few of them. I mentioned earlier the Ministry of Human Resources and Emiratization, or MOHRE for short. And that's your main regulator, federal regulator governing all onshore jurisdictions across the UAE outside of free zones for employment and work permit matters. And you'll be commonly interacting with MOHRE with respect to all things employment and work permit related. Together with the relevant immigration or residency authority in your particular emirate. So there's the immigration department of Dubai, there's the Abu Dhabi immigration department, there are other similar counterparts in other emirates as well. And in practice, that means that employers need to coordinate across several processes, labor approval, contractual documentation, because oftentimes in the UAE, your employment contract would actually need to be filed with the regulator as part of the sponsorship process, and residence requirements overall. It can be quite involved. Whereas if you compare that with the DIFC and the ADGM, as recent examples, starting with the DIFC, it's interesting in that particular jurisdiction in that it has its own employment law framework. It's self-contained. So if you're operating within the DIFC, you're operating within a different set of rules compared to the mainland. And the practical advantage is that it's very much streamlined through one regulator in the DIFC, which is the DIFC's government services offices. It operates as kind of a single window service provider, if you will. So employment, it's a one-stop-shop approach that clients very much appreciate. And it's one of the distinguished advantages for clients who are looking to set up. And we can get into a little bit more in terms of the factors that clients look at when they're deciding which jurisdiction to register in. But it's certainly one big advantage. If you're set up in the DIFC and you're sponsoring your employees, you're going through all applications for your residency visa and your work permit, are going through the DIFC government services office. And any government services related to that can be handled through this one centralized channel. And this makes the process significantly more streamlined for businesses that are established and licensed within the DIFC.  

Grace Shie: Yeah, and that's been our experience too, you know. 

Jad Taha: Similarly, ADGM has structured things in very much the same way. If you look at the DIFC and ADGM, they're similar in that they're financial free trade zones. One is in Dubai, the DIFC and the other is in Abu Dhabi. The DIFC was set up in 2005, so it had a bit more, has more years of experience, if you like, in terms of the structuring and the framework around how things are done. And the regulations are older and more established and you can see they're a bit more developed. ADGM was set up in circa 2016-2017 is really when it came online, but it very much follows a similar model in terms of having everything streamlined. In ADGM, you have your registration authority. That's your single window service provider. And it oversees the registration authority of the ADGM, oversees work permits and visa and government services and related services, all of which are facilitated through ADGM's own channels through the registration. 

Grace Shie: Sounds equally efficient. Yeah. 

Jad Taha: Yes, and it is in practice. 

Grace Shie: Now what about sort of kind of moving on to specialized and employment frameworks. you talked about sort of different factors that clients might consider in terms of setting up in DIFC or ADGMs or anything you want to mention there. 

Jad Taha: Yes, so it's important to recognize the advantages of the DIFC and ADGM, but it's also important to factor in other things that are worth considering as a business when you are choosing which jurisdiction to set up in. you know, a set of factors varies depending on the sector and the particular business. But in general, there are businesses that are set up in order to make sure that they have an employment workforce in place and be able to service their clients. And that's all they care about. And they want to make sure that they're set up quickly and have everything streamlined. In this case, setting up in the DIFC and ADGM makes perfect sense. If they're dealing a lot with the government, they want to deal with a one-stop-shop type approach and you would get that with the DFC and ADGM. But at the same time, that particular business may have clients across the UAE and it may not make sense for them and for the client in particular to be dealing with a business set up in the DFC when that client is sitting in the Emirate of Fujairah. It's very important to be informed as well, not just by the framework itself, but informed by what your clients' expectations and needs are of your business. And if you have clients sitting across the UAE, common structure as an example, and that's often the case with multinational companies, is they would set up in the DIFC as a subsidiary, so as a limited liability company or a limited partnership. Those are the two common structures, depending on the type of business. But then have branches sitting in different jurisdictions across the UAE. So you can have a DIFC entity as a subsidiary of your foreign company. And you can have a branch, you can set up a branch of that DIFC subsidiary sitting onshore in the UAE. And that branch can provide services, can interact with the client, with your clients across the UAE, as long as those clients are onshore. And they would, of course, as an onshore branch have the requisite licenses to do so. And so it's very important to recognize which jurisdiction makes the most sense for your business, but also for your clients and the type of services that you're looking to provide. 

Grace Shie: So we've talked about the different streams and government requirements for employers based on their location. And previously you talked about Emiratisation and the consideration of local and national hiring. How do businesses or how can businesses meet those requirements, the Emiratisation requirements, without undermining or jeopardizing their need to bring foreign workers from overseas offices or to bring in foreign talent into the UAE. They at first glance they s appear to be competing principles, but oftentimes we see that they can coexist and you can employees can meet both objectives. 

Jad Taha: Sure. And this is a question that we get a lot. And I think the most important thing to say is, Emiratisation and international recruitment should not be treated as competing objectives. They're not in conflict. In fact, the most successful companies in the UAE treat them as complementary to one another. And this is very much anecdotal from our clients. The strongest, model tends to be a blended workforce strategy that identifies several things, one of which being roles suitable for immediate Emirati recruitment, positions requiring international experience, roles that can be localized over time with proper training and development, and opportunities for knowledge transfer and succession as well. And companies that have been able to do so, in particular focusing on training and development, have been able to transfer or transition a lot of the roles that initially started as roles filled by expatriates and ended up over time getting filled by Emiratis and therefore that of course favors and benefits their Emiratisation quota requirements. And there are some practical ways employers can support Emiratisation. For example, in terms of immediate needs for supporting and satisfying Emiratisation requirements, as a small business, you can support graduate and internship programs, structured training, mentorship by international specialists, defined career progression for young Emiratis entering the workforce anew and leadership development programs and succession planning for skilled and management positions. And if you are demonstrating, if you have these programs that are closely managed and they can be properly demonstrated as being successful and over time, that you are in a very good position from a compliance perspective, sometimes even when you don't necessarily meet the Emiratisation number, but get very close to it and are able to demonstrate that those programs are in play with the Ministry of Human Resources. 

Grace Shie: Thank you. So to close us out, you know, we always like to leave our listeners with some practical takeaways on the subject. What practical steps would you recommend that multinational employers take now in lieu of what we just discussed? 

Jad Taha: I'd say the first thing is to determine which employment regime applies to each of your UAE entities and workforce populations. That means understanding whether each entity is mainland, DIFC, ATGM, or another free trade zone. And what that means for your employment and mobility obligations, don't assume it's the same across the board. As we mentioned earlier, UAE is not one single jurisdiction. Secondly, I would say conduct a proper audit of your current Emiratisation exposure, even as a small company, and your upcoming workforce needs. Understand where you stand right now, what your recruitment pipeline looks like, and when the next target dates are coming up, especially with risk, you know, when you're looking at moving targets that are being issued by the Ministry of Human Resources. You don't want to be scrambling at the last minute, and that's when mistakes happen and penalties accrue. And thirdly, and this is really the overarching theme of our conversation today, integrate your localization, immigration, and talent planning together. Decisions about entity location, visa sponsorship, international assignments, and Emirati recruitment should all be part of one coordinated regional workforce strategy. When you bring all of these pieces together, that's when businesses really get things right. 

Grace Shie: So the key message here is that Emiratisation doesn't prevent the UAE from operating as an international talent hub for businesses. It does require businesses to combine, as you said, global mobility with credible investment in the national workforce. And developing that one coordinated regional workforce strategy very much is the secret to great success. Well, thank you for joining me today, Jad. 

Jad Taha: Thank you for having me. 

Grace Shie: And this wraps up our episode of The Inside Track.