Citizens warned business owners against sham business relationships

“Emiratization”: Selling small and medium enterprises “without notification” removes them from the first category classification

The “Human Resources and Emiratisation” provides incentives for establishments owned by citizens, most notably raising their classification within the “first category” to 5 years.

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The Ministry of Human Resources and Emiratisation has identified six violations that lead to the exit of small and medium-sized enterprises owned by citizens from the classification of “Category One”, most notably the citizen selling the facility or transferring its ownership to another person “without notifying the youth project support institutions or notifying the Ministry”, or if it is proven that the facility is It is run without its owner or without a citizen manager, warning the owners of these establishments against tampering with the nature or numbers of workers registered with them, or that the work relationship of the facility with its workers is a “sham.”

The Ministry affirmed its keenness to empower small and medium-sized companies owned by national cadres, as a strategic priority to lay the foundations of entrepreneurship and encourage citizens to engage within the state’s economic and innovative systems, through the SMEs portal, noting that it provides a package of incentives for these citizen-owned enterprises, most notably raising their classification. Within the “first category” to five years from the date of the first issuance of the facility license instead of three years, in addition to increasing the number of companies owned by one citizen, which can be classified under this category, to five small and medium enterprises, instead of two.

The ministry defined, in an indicative circular, which was broadcast on its official accounts on social media platforms, small enterprises as “enterprises owned and managed by citizens and that have membership in one of the state-approved youth project support institutions, and the number of their workers does not exceed 15 workers,” while medium enterprises were defined as “ Establishments owned and managed by citizens and have membership in one of the state-approved youth project support institutions, and the number of its workers is not less than 16 and not more than 50.

The Ministry grants establishments registered with it within the first category administrative advantages and significant discounts in fees for the services provided, most notably reducing the work permit application fee to 50 dirhams, as well as reducing both the official issuance of a work permit for two years, and a work permit for a work assignment, to 250 dirhams, while paying Establishments registered under the second category charge a work permit application fee of 50 dirhams, while the fees for issuing a work permit for two years is 1200 dirhams, and issuing a work permit for a work assignment is 250 dirhams, while the establishments listed in the third category pay higher fees for services, such as issuing a work permit for two years. At a value of 3450 dirhams, and 250 dirhams for the issuance of a work permit for a work assignment.

The ministry identified six violations that lead to the cancellation of the classification of small and medium enterprises within the first category, and the reclassification in accordance with the applicable standards for the classification of establishments, including: breaching any of the five conditions for classifying the first category, as well as the establishment’s failure to pay workers’ wages, in addition to the establishment’s employment of its workers with Others without a license from the Ministry, or the employment of other facilities’ workers without a license from the Ministry, or it is proven that the facility’s work relationship with its workers is a fictitious one, as well as in the event of selling the facility or transferring its ownership to another person “without notifying the youth enterprise support institutions or notifying the Ministry.” Likewise, if it is proven by the Ministry that the small or medium establishment is managed by someone other than the owner of the establishment or without a citizen manager, and finally if the number of its workers exceeds 50 workers.

• The Ministry grants establishments registered with it within the first category administrative advantages and large discounts in service fees.

Conditions for classification of establishments

The Ministry pointed out that the classification of establishments within the first category requires the fulfillment of five main conditions:

■ That the owner of the facility or all of its partners are citizens of the country.

■ The small or medium enterprise must be a member of one of the state-approved youth projects support institutions.

■ That the owner of the facility manages it himself, or entrusts the management to a citizen manager.

■ The owner of the facility should not have any facilities he owns, or a partner in, that are registered with the Ministry and have any violations.

■ The owner of the facility shall not have more than five establishments that he owns, participates in, or in which he is a service agent.

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