New UAE visa regulations to drive FDI, as labour attraction and retention expected to strengthen

New UAE visa regulations to drive FDI, as labour attraction and retention expected to strengthen 

By: Contributor
Thought Leadership

The new rules for the UAE Golden Visa, which will see the eligibility criteria for the 10-year residency permit expanded from September 2022, and the five-year Green Visa, aimed at exceptional talents, skilled professionals, freelancers, investors, and entrepreneurs, signals a positive move from the UAE leadership to attract and retain skilled labour and boost foreign direct investment, according to ICAEW (Institute of Chartered Accountants in England and Wales).

By: Scott Livermore, ICAEW Economic Advisor, and Chief Economist and Managing Director, Oxford Economics Middle East

The UAE’s amendments to its visa regulations come at a time when the Leadership is looking at how they can continue to grow and diversify the economy, with the understanding that talent and foreign investment will play a vital role. This distinguishes the UAE from many countries around the world, and within the region, where reforms have only focused on the business environment in order to draw in FDI.

The amendments offer greater certainty to those looking to relocate to the UAE and this will generate spillover benefits to investors, especially in those sectors dependent on highly-skilled labour. For example, the Golden Visa was previously more attentive of the past, looking exclusively at those who have made sizeable investments or contributed to the economy over a number of years. The latest changes make the Golden Visa more forward-looking and dynamic. 

By offering visa security to a wider range of skills and talent, individuals will feel secure in moving even if, for example, their employment situation changes. This will encourage a broader pool of talent to come to the UAE with a more permanent mindset, which will likely lead to greater investment in local real estate and support the UAE’s financial sector. With a less transient pool of labour, investor confidence will also rise with the knowledge that business expansion can be driven through workforce investment, generating longer-term return and reducing the risk from high staff turnover. The reforms to the visa regulation seem an important step for attracting and retaining talent and this will increase the UAE’s attractiveness to investors.

Ideally, the attraction of talent creates a virtuous cycle, whereby deeper talent pools attract investment which creates further job opportunity. Covid has caused a period of unsettlement, with a spike in global unemployment, and the UAE has acted promptly to attract talent in time for the job market to begin to settle again.

The Golden Visa amendments have captured the headlines so far, but other introductions to the visa regulation are equally significant, such as the Green Visa and the job-seekers Visa. This will open up the UAE to a wider range of individuals and further increase the access to talent available to businesses. In order to carry on attracting talent, the government will need to continue to broaden its business and social reforms to promote the UAE as a place to settle and develop a career.

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