Half of the listed companies are not subject to Emiratisation obligationsTruth Consultancy
Reda Mosallam, partner and general manager of Truth Economic and Management Consultancy, said that there is still no explicit obligation for listed companies, except banks and insurance companies, with specific rates for Emiratisation and that there was a marked decrease in the employment rates of citizens in those companies according to official data.
He explained that the Securities and Commodities Authority Law and the Commercial Companies Law did not explicitly stipulate that companies should be bound to certain rates of Emiratisation. Therefore, there is no provision to compel these companies to the rates of Emiratisation unless the amendment of the previous laws and the introduction of a binding text for companies.
And he saw, forcing companies to set specific Emiratisation rates at the moment would not be feasible and would not end the problem as many companies might resort to mock employment of citizens to show their commitment so that they do not bear high additional costs that ultimately affect their profitability.
He pointed out that the ideal solution is to study the situation of each sector individually and also to consider the performance of listed companies so as to show a full picture of the financial situation of each company and therefore may be issued a non-binding administrative decision for companies with strong financial performance to raise the rates of Emiratisation.
Another solution to the Emiratisation process is to establish a government fund financed by more than one hand, including listed companies to allocate 1 to 2% of their net income, depending on their financial position, to support the fund for only two or three years, until the fund’s capital reaches to 5 billion AED to be invested for Emiratisation assistance.