Member News

United Arab Emirates

05 December 2023 –New End-of-Service Savings Scheme Now in Effect for Select Private Sector Employees

Effective immediately, a new end-of-service savings scheme, the “Voluntary Alternative End-of-Service Benefits Scheme,” is now available to employees selected by their private sector employers operating in both the mainland and in select free zones overseen by federal employment regulations. The scheme offers an investment pathway for eligible employees seeking to gain returns on their monthly end-of-service gratuity earnings, which were previously paid out in a lump sum at the end of their employment. Employees currently working in the public sector are also eligible to voluntarily opt into this new scheme. Employers may voluntarily choose to register with the new scheme, while ensuring their employees’ accrued entitlements from the previous end-of-service gratuity scheme are preserved, by submitting an application to the Ministry of Human Resources and Emiratization. Upon the Ministry’s approval, the employer must enter into a contractual agreement with an approved investment fund licensed by the Securities and Commodities Authority, which will assign the company a “Fund Manager” to oversee the respective investments. Employers must then select, subject to their own discretion, the employees who they would like to allow to participate in the new scheme. Employers who fail to pay the basic contribution fee on time will face penalties. This new scheme with monthly contributions gives employees an additional layer of security since previously lump sum payments made at the end of an employee’s employment could be at risk if the company went bankrupt or fell into other financial difficulties.

11 December 2023 - Significant Changes to the UAE Pension and Social Insurance Framework in Effect

The government of the United Arab Emirates has rolled out significant changes to the country’s pension and social insurance framework, including minimum monthly contribution rates and pension encashment rights, affecting currently registered and newly registered Emirati workers.

There are three different authorities that administer pension programs in the United Arab Emirates, namely: 

• The General Pension and Social Security Authority (GPSSA) which is responsible for GCC Member State workers employed in all Emirates, and Emiratis exclusively working in the Emirates of Dubai, Ras Al Khaimah, Fujairah, Ajman, and Umm Al Quwain; 

• The Abu Dhabi Pension Fund (ADPF) which is responsible for Emiratis working in the Emirate of Abu Dhabi; and 

• The Sharjah Social Security Fund which is responsible for Emiratis working in the Emirate of Sharjah. 

Employers must register with their respective pension authority and are then responsible for the enrollment of the eligible workforce within one month of employment in the case of the GPSSA, and within 10 working days of employment in the case of the ADPF. It is an employer’s responsibility to ensure that all monthly contributions are met per the respective pension authority’s regulations. 

18 December 2023 - General Pension and Social Security Portal Access to Be Limited to a ‘Main System User’

Effective December 21, 2023, each account on the General Pension and Social Security Authority (GPSSA) portal will be accessible only by a single individual, identifiable as the ‘main system user’. Currently, multiple individuals can access a single portal account by simply entering the respective employer’s account login credentials. As part of these changes, a single portal account-holder must be identified and will need to register their Emirates Identity Card details on the portal (under the ‘user information’ section of the respective employer’s account details). Furthermore, every time an account-holder accesses the portal they will need to verify their credentials using the UAE Pass platform.

The GPSSA is responsible for administering pension and social insurance programs to GCC Member State workers employed in all Emirates, as well as Emiratis exclusively working in the Emirates of Ajman, Dubai, Fujairah, Ras Al Khaimah, and Umm Al Quwain.

25 December 2023 - Suspension of Employment Sponsorship Transfer in Effect Across Free Zones in Dubai

Effective immediately, employers of foreign nationals can no longer benefit from the streamlined employment sponsorship transfer option. Although the suspension has been confirmed by several major free zones, including the Dubai International Financial Center, the Dubai Development Authority, the Dubai Multi-Commodities Center, the Dubai Airport Free Zone, and the Dubai World Trade Center, these authorities have not announced whether the suspension is a temporary or permanent change.

27 December 2023 - New Private Teacher Work Permit Launched

The Ministry of Human Resources and Emiratization (MOHRE) and the Ministry of Education launched a “Private Teacher Work Permit” to allow teachers to provide educational lessons to students privately while regulating the employment rights of these teachers. The new permit will allow teachers to teach both individual students and groups of students, and can teach both online and in person. Also, individuals holding this permit can work remotely from their home country provided they hold a valid residence permit in the United Arab Emirates. The following categories of individuals can apply for the new permit: Registered teachers in either public or private schools, employees in the public or private sector, unemployed individuals and students (who are at least 15 years old, or a school or university student). The permit is valid for two years and there is no application fee. Interested applicants can apply through the MOHRE smart application or portal. Previously, private teaching outside of an institution was not permitted in the United Arab Emirates and those who violated the law were subject to fines.

SAUDI ARABIA

03 December 2023 - Visa Now Available for Visitors of FIFA Club World Cup and World Defense Show

Effective immediately, foreign fans visiting the FIFA Club World Cup in Jeddah, which will be held between December 12 to December 22, 2023, and attendees of the World Defense Show in Riyadh, which will be held between February 4, 2024, and February 8, 2024, can now apply for a tourist visit visa or business visit visa, respectively, to Saudi Arabia.

Both the business and tourist visit visas can be obtained through Saudi Arabia’s online platform for visa applications. For applicants of select nationalities, the visa is issued electronically (e-visa) to their registered email address shortly after the application is completed. Other applicants may need to attend a consular post to complete the visa issuance process in-person.

06 December 2023 - 30-year Corporate, Withholding Tax Exemption Under Regional Headquarters

The Ministry of Investment of Saudi Arabia has announced that businesses that set up a regional headquarters in Saudi Arabia will be eligible for a 30-year exemption from all corporate income and withholding taxes that arise in relation to approved Regional Headquarters’ (RHQ) business activities as issued on their license. These incentives will apply from the beginning of the RHQ program when it goes into effect on January 1, 2024. The program was originally announced by the Saudi government in February 2021 and is part of ongoing efforts to attract foreign investment and enhance the country’s business landscape. As part of this program, Saudi authorities will significantly reduce their contractual arrangements with those foreign companies that do not have regional headquarters in Saudi Arabia. Only limited exemptions will apply. To date, Saudi Arabia has issued licenses to over 200 companies under the RHQ program.

14 December 2023 - Fines for Labor Violations Significantly Reduced

The Ministry of Human Resources and Social Development (MHRSD) has significantly reduced the fines for various labor violations, with some fines reduced by more than 90 percent compared to the previously endorsed labor penalties schedule from 2021. Among other changes, the fine regime has been amended as follows:

• the fine for employing a foreign national without obtaining work authorization is now SAR 10,000 for all types of companies (down from SAR 20,000 for certain sized companies).

• the fine for engaging a worker in a profession different from the one mentioned in their work permit or employment is now SAR 300-1,000 (depending on company size) – down from SAR 2,500-10,000.

• the fine for employing a foreign national in a profession or activity limited to Saudi nationals is now SAR 2,000-8,000 (depending on company size) – down from SAR 5,000-20,000.

• the fine for not complying with prescribed Saudization ratios for select professions and activities is now SAR 2,000-6,000 (depending on company size) – down from SAR 5,000 -20,000.

• the fine for failing to upload the monthly Wages Protection System file is now SAR 500- 2,000 (depending on company size) – down from SAR 5,000-15,000.

Furthermore, as part of these changes, Saudi Arabia has amended the headcount figures it uses to categorize companies for the purpose of fines. Companies are now designated as Category C (liable to the lowest range of fines) if they have 20 or fewer workers (previously it was 10 or fewer). Meanwhile, Category B companies (liable to mid-range fines) are those with between 21 to 49 workers (previously it was 11 to 50). Category A companies (liable to the highest range of fines) are those with 50 or more workers (previously it was 51 or more). These various amendments aim to improve the labor market environment by ensuring that the penalty regime better coheres with the size of affected private sector entities.

22 December 2023 - Saudization Requirements Announced for Sales Professions in the Insurance Sector

Effective April 15, 2024, Saudi Arabia will implement Saudization requirements for sales professions in the insurance sector, requiring a certain percentage of workers to be Saudi nationals, according to an announcement made by the Insurance Authority. However, the government has not yet announced the specific job titles that will be affected or the Saudization rates. The Insurance Authority will oversee the implementation of the Saudization requirements, ensuring that employers reach the targeted localization percentage by the required dates. Affected employers in the insurance sector should be aware of the forthcoming requirements as non-compliant employers will be subject to penalties such as the suspension of work permit issuance or employment transfers.

22 December 2023 - Electronic Education Certificate Attestation Platform 'Mosadaqa' Expanded to Four New Countries

The Saudi Arabia Cultural Attaché now allows applicants to use the online platform to attest educational certificates issued in the following new countries: Bhutan, Nepal, Maldives and Myanmar.

KUWAIT

07 December 2023 - New Immigration Law Forthcoming

The government of Kuwait finalized a new law that will relax the country’s immigration policy and is expected to be approved in the coming months. The new law will apply to almost all categories of foreign nationals, including domestic workers, with the exception of members of diplomatic missions or other members of government or ruling families. The law will introduce a renewable residence permit issued for up to five years, except for foreign children of Kuwaiti women and real estate owners (issued for up to 10 years) and investors (issued for up to 15 years). Additionally, foreign nationals in a visitor status will be permitted to stay in Kuwait for up to three months, extendable for up to one year. Furthermore, Kuwaiti women married to a foreign national will be able to sponsor a residence permit for their husband and children,

which is not currently allowed. Domestic workers will be issued a residence permit equal to the duration of their employment contract and will be allowed to change sponsorship in Kuwait, which is also not currently allowed. Furthermore, the law includes a provision stating that foreign nationals, including dependents, can be deported due to reasons related to public interest, general security public morality or lack of a legal source of income. We will issue a further client alert once the law comes into effect.

QATAR

12 December 2023 - New Application Service Announced for Converting Family Residence Permits into Work Residence Permits

Through a new service on the Ministry of Labor (MOL) online portal, employers can now apply for a Work Residence Permit on behalf of foreign nationals who currently reside in Qatar under a Family Residence Permit. To qualify for this service, the employer must have offered a job to the affected permit holder. If the MOL grants discretionary approval of the application, the employer must then pay processing fees to the Ministry of Interior, after which the permit holder’s Family Residence Permit will be converted into a Work Residence Permit, and the permit holder can commence working. Previously, only the foreign national themselves could apply for conversion to a Work Residence Permit (via the MOL portal), which required proof of the permit holder’s job offer, among meeting other eligibility criteria. The new service seeks to streamline the work permit application process for foreign nationals who have a Family Residence Permit. The service is currently being further developed and may be subject to further changes.

OMAN

12 December 2023 - Temporary Suspension of New Visa Applications for Bangladeshi Nationals

Effective immediately, authorities have temporarily stopped accepting and processing new Omani visa applications from Bangladeshi nationals. The suspensions – which will remain in place until further notice – not only prevent filing of new visa applications but also mean that pending applications by Bangladeshi nationals for new Omani visas are currently paused. Omani authorities have confirmed, however, that this suspension does not affect the immigration/stay rights of existing Bangladeshi visa holders.

EGYPT

18 December 2023- Minimum Salary Level Increase Forthcoming for Private Sector Employees

The Ministry of Planning and Economic Development has increased the monthly minimum salary level by EGP 500 for employees in the private sector in Egypt to EGP 3,500 (approximately USD 113). This is an increase from EGP 3,000 from earlier this year and will come into effect on January 1,2024.

IRAQ

27 December 2023 - New Law on Pension and Social Security Implemented

A new pension and social security law has been implemented. The new law changes retirement ages as follows: for men, the retirement age will vary between 50 to 63 years and for women, the retirement age will vary between 50 to 58 years, depending on years of service. Previously, the retirement age for men was either 60 years after 20 years of service, or any age if they have reached 30 years of service. For women, the retirement age was 55 years after 20 years of service or any age if they have at last 25 years of service. Additionally, the new law requires the employer to pay a registration fee of IQD two million (approximately USD 9,160) per foreign national to the Pension and Social Security Department through the Social Security system. The fee is a one-time payment per foreign national following their entry into Iraq. Further, for foreign nationals already in Iraq as of December 1, 2023, employers must pay a fee of IQD 750,000. Previously, there were no registration fees. Moreover, employers must pay an increased social security contribution rate to an employee’s pension at 20 percent of the employee’s gross salary (base salary plus any allowances), up from 12 percent of an employee’s base salary. While eight percent of this fee is covered by the Iraqi state for Iraqi nationals, employers must pay the full amount for foreign nationals.

MIDDLE EAST AND NORTH AFRICA

27 December 2023 - Select Pension Authorities Announce Deadlines for Employers to Update Registered Employees' Salary Details

Select pension authorities in the Middle East and North Africa region have announced deadlines for employers to update their employees’ salary details. In select jurisdictions, once the deadline has lapsed, employers will no longer be able to update their employees’ salary details and must wait until the following year to do so. Inaccurate record keeping of an employee’s salary details will negatively impact both employers and employees alike, as follows:

- all correlative monthly pension contributions will be incorrect; and

- where a pension authority’s system is linked to an overseeing tax authority’s system, the employee’s taxable income will be incorrect.

Non-compliant employers risk incurring two sets of administrative penalties and monetary fines: one for incorrect payments and another for delayed payments (these penalties will reflect the difference between payments already made and those that should have been made throughout the year).

ABOUT FRAGOMEN

Fragomen is the world’s leading single-focus provider of immigration services and support. Our firm is comprised of law practices and immigration consultancies that work together to support our clients across all regions globally. At Fragomen, we leverage our collective immigration experience to offer clients targeted and trusted solutions that help them achieve their local, regional and worldwide business goals.

Fragomen’s team of dedicated immigration professionals has extensive experience in working with multinational businesses, local employers, start-ups and individual investors. We have a deep understanding of the region and maintain strong professional relationships with immigration authorities. Our MENA immigration team is supported on a global basis by over 3,800 immigration professionals in more than 50 offices worldwide. Together, we provide comprehensive immigration support in over 170 countries.

All we do is immigration, a sole focus that makes a considerable difference. Unlike many other providers, all of our thinking, passion and resources are dedicated to improving the immigration experiences of our clients and their employees. We have the track record, region specific experience and know-how to provide you with a streamlined and compliant immigration solution.

Visit our website www.fragomen.com or contact us at [email protected] to learn more about our company and services.