The United Arab Emirates recently announced the unemployment insurance scheme to further improve its approach to the regional competition for talent and investment. The scheme, which is available to both nationals and expatriates, will further enhance the country's ability to attract talent by providing employees with a financial safety net should they lose their jobs and to encourage expats to remain in the country. This will likely facilitate recruitment by providing employers with a greater pool of local talent and reducing recruitment costs, as more talent in the market will result in a reduced need to relocate new recruits and their families to the United Arab Emirates.

Some further reform of the current visa regime may be introduced to compliment the new unemployment insurance scheme. At present, expatriate employees sponsored by their employers must leave the United Arab Emirates or secure alternative sponsorship within 30 days of the cancellation of their residence visa. The reforms, therefore, could lead to an extension to the 30-day grace period or perhaps an obligation for employers to continue to sponsor the visa during the period in which the employee is entitled to receive funds under the scheme.

The announcement of the new scheme is the most recent in a number of measures designed to enhance the United Arab Emirates' economy. These measures also include:

  • the introduction of new employment laws;
  • the switch to a Saturday-Sunday weekend; and
  • the introduction of an annual 2% Emiratisation rate in respect of highly skilled jobs in the commercial sector.

Emiratisation is a key pillar of the United Arab Emirates' economic agenda and it is expected that there will soon be further developments in this space.

For further information on this topic please contact at Joanna Matthews-Taylor Baker McKenzie by telephone (+61 2 9225 0200) or email ([email protected]). The Baker McKenzie website can be accessed at

An earlier version of this article was published in Arabian Business.