The UAE Ministry of Human Resources and Emiratisation has reversed its stance on a demographic diversity rule, previously cited by companies as the cause for multiple work visa rejections based on nationality.

The policy is still expected to be implemented at a later date.

AGBI recently reported that businesses in the UAE were encountering difficulties in procuring work visas for new employees of South Asian nationalities, after the government “reinstated” a directive aimed at boosting the mix of nationalities in the workforce.

“The enforcement of the demographic diversity rule, initiated last week, has been temporarily halted,” Abeer Al Husseini, Dubai-based partner at immigration law practice Fragomen, said.

“Applications that were initially rejected because companies did not meet the diversity requirements are currently being processed and considered for approval.”

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Al Husseini clarified that the policy is still anticipated to come into effect at some point.

“In our recent dialogue with [the ministry], it was conveyed that the demographic rule is being temporarily relaxed with the intention to grant organisations in mainland the opportunity to enhance their demographic composition,” she said.

“The ministry has not specified a timeline for reinstating this rule.”

Under the rule, companies must diversify the range of nationalities in their workforce. There may be limitations on applications for a nationality that already represents 20 percent or more of a company’s current workforce.

More than 200 nationalities live and work in the UAE.

The policy predominantly affects Indian nationals, who form the largest expatriate community, making up about 35 percent of the Gulf state’s population, followed by Pakistanis and Bangladeshis.

Evolving process

Libbie Burtinshaw, head of operations at visa services provider PRO Partner Group, confirmed that the ministry has currently “removed” the demographic diversity requirement but described the company’s experience processing applications as “varied”.

“This is a developing situation, and the processes and requirements are changing regularly, where we are seeing some applications for permits are open, others have remained closed,” she said.

“There have been cases where applicants for skilled positions, such as management, have been rejected based on the company’s demographic percentage having been reached, which have later been allowed to proceed on discussion with ministry officials.

“The permit applications that have been successful or rejected have very much been at the discretion of the ministry.”

Burtinshaw said the diversity requirements “may have the potential, without excessive monitoring, to block skilled and qualified talent, entrepreneurs, or corporations from accessing the market”.

A Dubai business owner, who declined to be named, called the new policy “difficult”.

“While workplace diversity is a great thing, it should not be forced as that could cause friction,” he said.

The policy, a subset of the mainland company classification regulation, primarily affects new work visa applications and, so far, does not apply in free zones.

Higher tiers of company classification offer special incentives and exemptions, and benefit in bids for government tenders.

The expatriate community outnumbers UAE nationals, with citizens making up around a tenth of the total population.