diff --git a/src/libs/actions/Policy.ts b/src/libs/actions/Policy.ts
index 2c08dd321b11..681b53b0a854 100644
--- a/src/libs/actions/Policy.ts
+++ b/src/libs/actions/Policy.ts
@@ -2099,6 +2099,7 @@ function createDraftInitialWorkspace(policyOwnerEmail = '', policyName = '', pol
                 owner: sessionEmail,
                 ownerAccountID: sessionAccountID,
                 isPolicyExpenseChatEnabled: true,
+                areCategoriesEnabled: true,
                 outputCurrency,
                 pendingAction: CONST.RED_BRICK_ROAD_PENDING_ACTION.ADD,
                 customUnits,