In a bid to enhance its global competitiveness, the United Arab Emirates will grant long-term residency visas for up to 10 years to investors, professionals, scientists, innovators, exceptional students, and specialists in the medical, scientific, research, and technical fields, the cabinet announced May 20.

Students studying in the UAE will be eligible for five-year residency visas, the official WAM news agency reported, and the residency of dependant students currently in the UAE will be reviewed, enabling them to extend their residency after completing their studies to “give them the opportunity to study their practical options in the future.”

“The UAE will remain a global incubator for exceptional talents and a permanent destination for international investors,” Mohammed bin Rashid Al Maktoum, UAE vice president and prime minister, said in comments reported by WAM. “Our open environment, tolerant values, infrastructure, and flexible legislation are the best plan to attract global investment and exceptional talents.”

The details and cost of the new visas were not announced.

In a further liberalization, the cabinet said it would allow Emirati businesses to be 100 percent foreign owned by the end of 2018—up from the current foreign ownership limit of 49 percent. 

Strengthen Competitiveness

The moves were seen as an acknowledgment that the UAE needs to attract more long-term residents and investment to develop its economy, which is currently dependent on a large and transitory cohort of expatriate workers.

The decision to allow complete foreign ownership of companies will help the UAE economy to “strengthen competition at a regional and international level” and will be “a major incentive for attracting foreign investment,” Saif Mohammad Al Hajiri, chairman of the Abu Dhabi Department of Economic Development, said on Twitter May 20. 

The decision conforms with the UAE's Vision 2021 strategy “to make the UAE a knowledge and skills-based economy, and central to this is the ability to attract and retain leading talents (and potential leading talents) in strategically important industries such as science and medicine,” said Amir Mayo, senior manager, international tax at Deloitte Middle East. “The UAE is the most diverse economy in the Middle East, but the long-term rewards of these initiatives are likely to see the UAE's economy compete favorably on a global scale.”

“To create new visa categories to accommodate specialists represents a significant movement toward having a visa system that more closely resembles a number of European and North American states,” Mayo said by email from Dubai May 22. The new visas would be similar to the U.K.'s Tier 1 visa and the EB2 visa in the U.S. 

The plan is also “a positive step for employers,” Mayo said. If visas were issued centrally rather than through employer sponsorship, it “would be a considerable incentive to employers as the cost implications for visas, renewals, and associated fees over this period can often reach $20,000 for one employee.”

‘Huge Boost'

Until the regulations are published, eligibility for the new visas isn't clear but they appear to be “a huge boost to the UAE as a global hub and a knowledge economy,” said Sara Khoja, a partner at Clyde and Co. law firm in Dubai.

“There may be a capital contribution requirement and also a minimum shareholding requirement” for the visas allocated to investors, Khoja said by email May 22.

“The move should encourage highly skilled people to settle in the UAE and invest in their long-term future in the country,” she said. “The labor market will grow more sophisticated and have a higher skill set to choose from with a potential move away from a short-term assignment remuneration structure to a long-term incentive structure based on actual growth of the business. Entrepreneurship should also be boosted if individuals can settle long term with their families.”

An extended visa for students means they won't have to renew visas annually as they do now, enabling the UAE to retain the best and brightest. It will also be a “major incentive to foreign undergraduates who are deciding on where to study as the UAE will begin to offer them mid- to long-term stability and prospects for the first time,” Mayo said.

The potential for students graduating from UAE higher education institutions to acquire longer-term visas “opens up possibilities for individuals in the UAE,” Khoja said.

Editor's Note: This article was originally published in Bloomberg News on Thursday May 24th, 2018 http://bit.ly/BBNLongtermvisa