The UAE Ministry of Human Resources and Emiratization (MOHRE) has issued the Ministerial Resolution No. 251 of 2022 to support Emirati small and medium-sized enterprises (SMEs) with new incentives.
The new incentives include classifying up to five enterprises under Tier 1 category per owner, instead of two enterprises, and a five-year classification under Tier 1 category starting from the date of license issuance.
Conditions for Tier1 SMEs
The Ministerial Resolution outlines five conditions for any SME to be classified under Tier 1 for five years. First, the business owner, or all the partners, must be Emiratis, second, the enterprise must be a member of a government-accredited fund or program for supporting SMEs, third, it must be managed by the owner themselves, or by an Emirati manager, fourth, the owner may not own or be a partner in another enterprise that is restricted by the Ministry and has any fines, and fifth, the owner may not own more than five companies, or be a partner in, or a service agent.
“The Ministry has unveiled various initiatives in line with the vision of our wise leadership. Empowering the people of the UAE continues to be a top priority, as it has been since the Union’s establishment, which encourages us all to keep working hard to serve them better. We are proud of the UAE’s national wealth, and its young men and women who are key in the efforts to diversify the economy and accelerate economic development efforts to build an active world-leading economy, enhance the nation’s economic competitiveness, and encourage innovation and entrepreneurship among its citizens.”
The Resolution also stipulates several circumstances under which the SME classification under Tier 1 would be revoked and reclassified to Tier 2 or 3 depending on the criteria it meets, like, if the enterprise hires more than 50 employees, or fails to pay the employees’ wages, or fails to obtain a license from the Ministry of Human Resources and Emiratization to employ workers for others.
The SME’s classification under Tier 1 may also be revoked if employees of other facilities work for the enterprise, if the enterprise is sold or its ownership transferred to another person without notifying the concerned fund or program that supports SMEs or the Ministry, or if it is proven that the enterprise is managed by someone other than its owner or an Emirati manager, or in the event of any breach of the conditions for classifying an SME under Tier 1.