MoHRE’s New Business Classification: Incentives and Penalties in 2025

The Ministry of Human Resources and Emiratisation (MoHRE) has implemented a modern, three-tiered classification system for private sector establishments, replacing all previous models (including the 2010 structure). Effective since June 2022, this system directly ties a company's regulatory compliance, commitment to national talent, and workforce diversity to the cost and ease of accessing MoHRE services.

Governed primarily by Cabinet Resolution No. 18 of 2022, the goal is to enhance market growth, attract high-skilled talent, and enforce strict adherence to the new Federal Decree-Law No. 33 of 2021 (the UAE Labour Law).

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🥇 The Three-Tier Classification System

Companies are automatically placed into one of the three categories based on an automated system that monitors real-time compliance data. The category determines the work permit and transfer fees charged by MoHRE.

Category	Compliance Status	Work Permit Fee (Approx. for 2 Years)	Key Criteria & Benefits
Tier 1 (First)	Highest Compliance	$\text{AED }250$ (Max reduction of 80%)	Exceeds Emiratisation targets by 300%; is an innovative SME; cooperates with Nafis by hiring/training $\ge 500$ citizens annually.
Tier 2 (Second)	Default/Standard Compliance	$\text{AED }1,200$ (Standard fee)	Complies fully with the Labour Law, WPS, worker protection, and cultural/demographic diversity policy. All new and generally compliant firms fall here.
Tier 3 (Third)	Non-Compliant/Violator	$\text{AED }3,450$ (Highest fee)	Violates the Labour Law, cultural diversity policy, or commits serious breaches (e.g., failure to pay WPS, providing false data, human trafficking).

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🎯 Mandatory Compliance for Tier 2 and Tier 1 Status

To avoid being downgraded to the costly Tier 3, all establishments must adhere to the foundational compliance standards:

1. Zero-Tolerance for Law Violation

Companies must be 100% compliant with Federal Decree-Law No. 33 of 2021, its Executive Regulations, and all ministerial decisions. Violations can lead directly to Tier 3 classification.

2. Wage Protection System (WPS)

Full and timely payment of wages through the WPS is mandatory. Any failure to adhere to the WPS regulations is a major factor in being downgraded.

3. Cultural & Demographic Diversity Policy

Companies must adhere to the policy that promotes cultural and demographic diversity in the workforce. This is a core requirement for both Tier 1 and Tier 2 status.

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🏆 Achieving Tier 1: The Incentive-Driven Model

Tier 1 is not the default; it must be earned by meeting the fundamental requirements of Tier 2 PLUS fulfilling at least one of the following premium criteria:

• Exceeding Emiratisation Targets: Raising the annual Emiratisation rate to at least three times the targeted rate set by the Cabinet (currently $2\%$ increase per year for companies with 50+ employees).

• Nafis Cooperation: Actively cooperating with the Nafis program by hiring and training a high volume ($\ge 500$) of Emirati citizens annually.

• SME Status: Being categorized as a Small and Medium-sized Enterprise (SME) owned by a young Emirati citizen or being a project of an innovative nature.

• Strategic Sector: Belonging to a targeted economic activity or sector determined by the Council of Ministers.

📉 Financial Impact of Classification

The fee difference highlights the financial incentive for compliance. For a work permit issued or renewed for two years, a Tier 1 company pays a minimal amount (up to $\text{AED }250$), while a Tier 3 company pays a fine-level fee (up to $\text{AED }3,450$).

The new classification system has effectively created a performance-based market where excellent corporate behavior is rewarded with significantly lower operational costs and streamlined government services, while non-compliance results in heavy financial penalties.

The Ministry of Labour UAE announced minimum wage limit for different categories of workers

The Ministry of Labour on Saturday announced a minimum wage limit for different categories of workers, depending on their qualifications.According to new labour laws, employees under skilled class level 1 (those with a Bachelor's degree) should earn a minimum Dh12,000 a month.Diploma holders, who come under skilled class level II, should earn not less than Dh7,000 and workers who have passed high school should be paid a minimum salary of Dh5,000.

The ministry urged strict implementation of Wage Protection System (WPS) and called on companies to adhere to the salary structure according to the amended classification.With a focus on emiratisation, the ministry has amended a few labour laws that stipulate establishments hire employees under three categories.

According to the new amendment, nationals should not be less than 15 per cent of the total staff of any company.

Similarly, the skilled class (inclusive of three levels) should not be less than 20 per cent of the total employee strength of any company.The ministry has also classified establishments according to the type of employees they hire.

Depending on the percentage of diversity among staff, companies now fall under three categories (first and second and third), and category II includes three levels (a, b and c).

A facility will fall under level (a) if the diversity among employees is at least 25 per cent; under level (b) if diversity among workers is between 25-50 per cent; and under level (c) if the diversity is 50 per cent or more.

A company can be upgraded to second level irrespective of the diversity provided the skilled class is not less than 20 per cent of total workforce. Similarly, companies can be downgraded if they violate labour laws, clarified Labour Ministry.

Canadians to stay outside the country for one month for new UAE visit visa

Canadians need to stay outside the country for one month before they can apply for new visit visas in a stipulation similar to one set out for people of certain nationalities who are required to have a visa in advance to enter the UAE, official said yesterday.

Officials said the same visa rules that are applied to people of certain other nationalities who are required to be in possession of a visa before entering the UAE will apply to Canadians as well.An official from the Ministry of Interior said that the new rules will take effect from January 2.

Canadians who hold regular passports and intend to travel to the UAE need to apply for visa in advance for visit, tourism and business purposes, the official said.

The official added that Canadians seeking to enter the UAE on a visit visa could get their papers processed through a sponsor who could either be a person or a company.

Transit visa

The official said that those Canadians going to the UAE as tourists could apply for tourist visas through hotels or travel agencies in the UAE.He said the same rules that were applicable to people of nationalities requiring an advance visa to enter the UAE would henceforth apply to Canadians, who were earlier exempted from visa rules.

Canadians transiting through the UAE will be able to obtain a transit visa at the airport upon presentation of travel documents indicating that they will leave the UAE within 96 hours to their onward destination, the official said.

"In the past a Canadian with regular passport could enter the UAE after obtaining visa upon arrival. Now the rules have changed," he added.

The UAE Embassy noted that a "short-term visa" will cost C$250 and would be valid for 30 days, a long-term visa for three months would cost C$500 and a six-month multiple-entry visa will set travelers back C$1,000.

He added that Canadians with diplomatic and special passports are required to obtain their UAE visa from the UAE Embassy in Canada before their travel.The official said Canadians visiting the UAE would also have to ensure that their passports were valid for at least six months beyond the date of entry into the country.

New UAE visa charges hit Canadian travellers

Canada's Conservative government is under fire from Liberal Opposition critics on home soil after the UAE Embassy in Ottawa announced new visa charges of up to C$1,000 (Dh3,660) for Canadian visitors to the UAE.

Formerly free for Canadians, UAE visas must now be paid and applied for in writing to the UAE Embassy in Ottawa two weeks in advance of entering the UAE.The new paid visas are mandatory effective January 2.

 

The new visa regulations were first announced in early November, as Canadian troops were vacating Camp Mirage.

Dubai expelled hundreds of Canadian troops from a semi-secret military base on its soil earlier this fall. The Canadian military had enjoyed rent-free access to Camp Mirage for the past nine years. The base served as a key transit point for troops shuttling to and from Afghanistan. Relocating to a new base may cost more than $300 million.

 At the time the U.A.E.'s ambassador to Canada, Mohamed Abdulla Al Ghafli, told the Canadian Press that the decision to institute visa fees was "based on a policy of reciprocity." Weeks later, the U.A.E.'s economic minister, Sultan Al Mansouri, said that Canada's relationship with his country had been "destroyed" by the airline dispute and by remarks made by Canadian officials.

"There have been some statements made from the Canadian side, which were sometimes very fiery statements," Al Mansouri was quoted as saying in Abu Dhabi's The National newspaper. "This is not the way relationships between two countries are handled." In late November, then transport minister John Baird defended how Ottawa handled the landing-rights negotiations, arguing that "literally tens of thousands of jobs" were at risk at home.

Canadian Prime Minister Stephen Harper is being accused of damaging formerly strong ties with an important Middle East ally by refusing additional landing rights for the UAE's two major airlines, Emirates and Etihad.The airlines asked for more than the current six flights a week to Canada but were rejected.In a previous statement, Abdullah Al Gafi, UAE Ambassador to Canada, said failure to reach a new agreement "undoubtedly affects the bilateral statement".

Canadians travel to United Arab Emirates to pay stiff visa fees from January 2, 2011

Canadians wishing to travel to the United Arab Emirates will have to pay stiff visa fees of up to C$1,000, C$250 for a 30-day visa,C $500 for a three-month visa and a whoppingC $1,000 for a six-month, multiple-entry visa . Canada had been one of more than 30 countries whose citizens could travel to the U.A.E. on a free one-month visa. The new fees, which are unusually high by international standards, appear to represent the latest episode in a diplomatic row over landing rights for U.A.E.-based airlines in Canada. The new paid visas are mandatory effective January 2.

"The complete visa application needs to be sent to the UAE Embassy 15 working days before the departure date," the embassy said in its requirements, posted on Tuesday.

The UAE Embassy noted that a "short-term visa" will cost C$250 and would be valid for 30 days, a long-term visa for three months would cost C$500 and a six-month multiple-entry visa will set travelers back C$1,000.
Requiring an approved UAE visa in advance of arrival is a radical departure from the time when Canadians were granted visas upon arrival at Dubai and Abu Dhabi international airports.The new rules won't necessarily affect a large portion of the roughly 25,000 Canadians who live and work in the UAE because many already possess residence permits.