Insights Tax and Legal Services PwC Middle East
GCC Employment and Immigration law update
April 2019
In brief As quarter one closes, it is fair to say that 2019 has already set about driving forward developments in the immigration and employment regimes of the various GCC countries. This update provides an overview of the key changes and regulations in the GCC.
In detail
United Arab Emirates
Key developments in the UAE include:
● The UAE Government declared the unification and alignment of UAE private sector public holidays with those of the public sector. In practice, therefore, this means that the private sector will see an increase in the Eid-Al-Fitr holidays (up from two days to four days) and Eid-Al-Adha holidays (up from three days to four days) for the year 2019 onwards. National Day has been confirmed as two days (2 and 3 December) with Commemoration Day as 1 December. However, the previously mandated public holidays for Isra Wal Miraj and the birthday of Prophet Muhammad (PBUH) (being one day each) no longer apply.
● The UAE Minister of Human Resources and Emiratisation re-emphasised on 17 March 2019 that Emiratisation remains a national priority with various initiatives being proposed to facilitate greater Emirati participation in the private sector workforce. Integral features of this announcement include:
(a) generally boosting Emiratis’ participation in the labour market, equipping Emirati cadres with skills required for the labour market, attracting highly qualified and skilled professionals, promoting entrepreneurship and building a knowledge-based economy.
(b) the adding of greater enforcement mechanisms to the labour market test built into the UAE Labour Law which generally mandates employment being an inherent right of Emirati nationals, followed by Arab nationals and thereafter, other nationalities. In practice and, to date, this labour market test has not been rigorously enforced. The approach going forward is to enforce this test on a graduated basis across targeted industry sectors and based upon employee size. This additional enforcement mechanism (which will be electronic based) has not yet been enacted into law.
(c) the introduction of a self-employment policy (which has yet to be finalised), enabling Emiratis to earn a monthly income by working independently, thereby creating enhanced employment opportunities for Emiratis (especially in remote areas and for Emirati women).
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● On 31 March 2019, the UAE Government announced a significant change to the family visa sponsorship regime which is to take effect on 1 July 2019. Under the new rules, only a sufficient income to support family members will be the sole criterion UAE expatriates will need to evidence in order to sponsor their family members. The existing regime mandates employees earn a minimum salary and hold a specific professional status (which varies depending upon whether the employee is male or female) in order to be able to sponsor family to reside with them in the UAE. Following 1 July 2019, the professional status requirement will be abolished. It is not immediately clear if there will be any changes to the existing minimum salary requirements for family sponsorship (for example, currently this stands at approximately AED 4,000 per month without accommodation or, in the case of female employees holding specific professional roles, AED 10,000 per month).
● Nationals of the Maldives and Paraguay are now eligible for a free 90-day visa on arrival when travelling to the UAE, marking a change to the old regime which necessitated such nationals apply for a visa prior to travel to the UAE.
● Following an agreement between the UAE and Russian governments, Russian nationals are now eligible to receive a visa on arrival for stays of up to 90 days within any 180-day period - the old regime provided Russian nationals with a 30-day visa on arrival in the UAE.
● Nationals of Afghanistan, Iran, Iraq and Pakistan must now submit a copy of their national identity documents (as issued by the respective authority in their home country) as part of the new employment residence permit application process in the UAE.
Kingdom of Saudi Arabia (KSA)
Key developments in the KSA include:
● Tourists will be offered new one-off “Events” visas for specific sporting, entertainment and business attractions taking place in the KSA. The relevant government departments will regularly update the KSA Foreign Ministry and the Saudi Presidency of State Security about the planned events at least two months before their dates to facilitate event details being uploaded into the prescribed visa system. The KSA Cabinet said embassies and consulates will be able to issue the visas within 24 hours of receiving a request.
● In line with the KSA’s Vision 2030, the KSA Minister of Culture announced on 28 March 2019 that KSA will offer international artists the opportunity to take up residency in the KSA as part of a broader ‘cultural residency’ scheme. Other schemes include art prizes, scholarship programmes and a culture fund to support artists. No further details were provided on when this residency scheme will come into effect or indeed the terms and conditions attached to its issuance.
● Foreign nationals applying for a family visit visa extension in the KSA must now also extend their health insurance policy before initiating the visa extension process for each applicant. Under the previous system, this was not a mandatory requirement.
● There has been a gradual and periodic increase in expatriate work permit fees in KSA starting January 2018. This increase has laid additional monetary burden on companies in KSA and, in an effort to support private sector companies (and, relevantly, employ greater KSA
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nationals into the private sector workforce), the KSA government in February 2019 approved a scheme to reimburse work permit fees paid by some companies in 2017 and 2018. Importantly, only companies who have maintained a Platinum or a Green (high, medium or low) Nitaqat rating for the past 52 consecutive weeks (as of the date the Ministry of Labour and Social Development (MLSD) review the reimbursement submission request) are eligible to claim the work permit fee reimbursements through their online portal. That being said, meeting the aforementioned criteria does not guarantee an approval of the reimbursement request. Once the request has been submitted, the MLSD will review the request and the eligibility of the company before approving, at its sole and absolute discretion, the reimbursement.
Oman
Key developments in Oman include:
● Under the terms of a new Omani Government scheme, companies committed to Omanisation efforts within their workforce will be permitted to fast-track visas for expatriate employees - thereby creating a new priority service channel for such companies. According to figures from the Oman Chamber of Commerce, more than 300 private sector businesses already meet the criteria to receive the new priority service, termed the “Work Environment Measurement Card Al Majeedah”, with all its benefits, including receiving permits for expatriate employees within 24 hours, a key incentive for further Omanisation compliance and adherence by private sector employers.
● The Oman Capital Markets Authority on 31 March 2019 issued the United Health Insurance Policy (the “UHIP”), applicable to private sector employees (including their spouse and children aged 21 and under) and visitors to Oman. It is important to note that the UHIP is merely a “declaration” of the formal health insurance scheme that is to be implemented at the end of 2019 and serves as a useful indication of the eventual health insurance scheme contents, scope and ambit. Key features of the UHIP include:
(a) basic health coverage for both outpatients and inpatients, emergency conditions, treatment of diseases, and the cost of medicines.
(b) the employer is responsible for the payment of the premium and in agreement with the employee, can include added benefits for pregnancy, childbirth, dental and eye care.
(c) the employee can withdraw from a scheme by giving 30 days notice to the employer, along with a proof of an alternative insurance policy.
(d) there is an express exclusion list including (but not limited to) premeditated self-inflicted injuries, experimental treatments, pre-existing conditions, comprehensive check-ups that do not require medical treatment, any checkups or health services done for reasons such as travel, insurance or a permit are exempted from the mandatory insurance policy.
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Kuwait
The Ministry of Interior has announced that all foreign nationals in Kuwait will be required to carry a new residency civil card (with a valid passport) in order to enter or depart Kuwait. The existing regime of a residency visa being affixed to the foreign nationals passport will be cancelled effective 10 March 2019 and replaced with the new residency civil card. Foreign nationals holding endorsed residence permits approved before 10 March 2019 can continue to enter or depart Kuwait as normal and will receive the new civil card when they renew their residence status.
Bahrain
In Bahrain, a new law has been enacted codifiyng anti-discrimination and anti-sexual harassment provisions in the workplace context; rendering it unlawful for employers to discriminate against employees based on sex, origin, language, religion or creed. The law also criminalises sexual harassment at work “by reference, speech, act or by any other means”. Both employers and employees found guilty of acting in breach of this law will be liable to penalties. This codification of protective laws is a welcome step and broadly aligns with anti-discrimination provisions already legislated in the UAE and Qatar (most notably in the DIFC, ADGM and QFC free zones).
The takeaway
GCC employment and immigration laws represents a key enabler for facilitating various oil diversification initiatives across the GCC member states and looks set to dominate 2019 in terms of changes and developments.
We will continue to monitor these changes and keep you up to date on any developments.
Lets talk PwC Middle East Tax and Legal contacts
Mark Schofield, Dubai Darren Harris, Dubai Anir Chatterji, Dubai Middle East Tax and Legal Middle East Legal Services Leader Middle East Immigration Services Leader T:+971 (0) 4 304 3309 and Employment Leader T: +971 (0) 4 515 7250 E: [email protected] T:+971 (0) 4 304 3922 E: [email protected] E: [email protected]
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