As the new year approaches, the United Arab Emirates (UAE) is gearing up to implement an ambitious agenda for 2025 aimed at improving healthcare access, protecting the environment, and reforming tax strategies. These landmark initiatives reflect the government’s commitment to fostering a more equitable and sustainable society.
Key Initiatives to Revitalize the UAE Economy
In addition to introducing flagship policies, the UAE government is also prioritizing the growth of its local workforce. With a renewed focus on Emiratisation, private sector companies are expected to align with new employment targets, promoting the inclusion of Emiratis in various roles. As we enter 2025, businesses should be prepared for significant changes in the financial landscape, particularly with the introduction of new tax regulations aimed at large corporations.
Nationwide Health Insurance Effective January 1, 2025
Beginning January 1, 2025, basic health insurance will become mandatory for all private sector and domestic workers in the UAE who do not already have coverage. This major reform, which mirrors existing provisions in Abu Dhabi and Dubai, will extend to employees across the Northern Emirates, including Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah. Key Details:
- Employers must secure health insurance for employees as a condition of issuing or renewing residency permits.
- The new insurance policy will be valid for two years and will cost approximately Dh320 ($87) annually.
- The policy covers individuals up to 64 years of age, providing immediate coverage for those with chronic illnesses.
According to Neeraj Gupta, CEO of Policybazaar.ae, this pricing strategy enhances accessibility, allowing a larger segment of the population to secure essential health coverage for their families.
Enhanced Plastic Waste Management in Dubai
Starting January 1, 2025, Dubai will intensify its efforts to combat plastic waste by expanding its ban on single-use plastic items. Following the successful ban on single-use bags in June 2024, the new regulations will prohibit Styrofoam containers, plastic stirrers, straws, and more.
Future Phases: In January 2026, the ban will expand to include single-use plastic cups, lids, cutlery, and food containers. These measures are part of a broader, nationwide initiative aimed at minimizing plastic waste and fostering a culture of recycling among residents and businesses alike.
Corporate Tax Changes
15% Tax on Major Multinationals In a move to align with international standards, the UAE will enforce a minimum corporate tax rate of 15% on large multinational enterprises (MNEs) starting January 1, 2025. This tax will apply to companies with consolidated global revenues exceeding €750 million ($793 million) in at least two of the previous four financial years. This update follows the introduction of the initial federal corporate tax of 9% implemented in June 2023.
Ambitious Emiratisation Goals Set for 2025
As part of a broader strategy to increase the participation of Emiratis in the workforce, the UAE government will revise its Emiratisation goals effective January 1, 2025. By the end of 2026, the target is for 10% of the skilled workforce in the private sector to be Emirati.
Requirements for Private Companies:
- Companies with 50 or more employees must hire 7% Emirati staff by June 2025, rising to 8% by the end of the same year.
- Smaller businesses (20-49 employees) are required to hire at least one Emirati in a skilled position by the end of 2024.
Conclusion
As the UAE prepares to implement these critical policies, businesses and residents alike should stay informed about the upcoming legal and economic changes that could significantly influence various sectors. From health care to environmental protections and tax strategies, 2025 promises to be a transformative year for the nation.
The article on Corporate Tax Landscape in Mergers and Acquisitions might help you gain a holistic view of the future of AEU’s economy.
