Changes to UAE Policies on Business Ownership and Residency

The United Arab Emirates, which previously did not allow 100% ownership of foreign business entities or long residency, recently changed both policies. In a move that’s delighted business leaders right across the board, the country’s cabinet announced the changes would come into effect at the end of the year.

The Changes in Detail

The changes will permit STEM professionals (science, technology, engineering, mathematics) including medical and research professionals, to stay in UAE for up to 10 years. There are also changes to the student visa programmes; 5-year visas are available for all students while those considered “exceptional” may be allowed to stay for up to 10 years.
 
The changes also mean the end of the policy for businesses established within the country to take on local partners who would be legally obliged to hold a minimum of 51% ownership. It is believed the steps will improve opportunities for foreign investors in UAE:
 

• A greater level of foreign investment and international cooperation
• Attracting even more highly-skilled people to the country for longer-term residency
• Specifically, it is believed these moves will boost the expanding real estate sector in UAE

 

UAE Branches Out on the International Stage

So far, Abu Dhabi and Dubai (the two main Emirates) business interests have focused on airlines, financial services and – of course – the tourist sector. But now, it’s seen as prudent to diversify towards a growing technology sector to ensure long-term sustainable growth in such areas as technology & science, and in real estate. The policy to allow 100% foreign ownership is seen as a positive step for UAE’s need to divest from the oil and petrochemical industry.

With many global institutes divesting from oil, UAE believes taking the initiative will improve non-oil based FDI (Foreign Direct Investment). UAE’s economy is heavily reliant on foreign investment and workforce. This will ensure the best of the best will now see the country as an attractive proposition and be drawn to the Emirates as well as the Free Zones where no such restrictions were previously in place.

The country also realised that short-term residents were sending money out of the country ahead of the expiry of their work visa. This new move should limit this issue too.
 

How Will UAE Real Estate Benefit?

Students and science/tech professionals provision will certainly improve in UAE. However, the industry which expects the most growth is real estate. As foreign visitors and investors are now permitted to stay longer-term, the benefits are enormous. Industry analysts and operators have stated the changes will be a “game changer” as foreign residents move from a transient to a more settled status, creating sustainable demand for housing and commercial property, and foster a greater sense of belonging for those living in the country temporarily – ideal for creating communities while benefiting economically from a skilled foreign workforce.
 
As demand increases, so will supply, fuelling real estate from the building sector as well as the rental and sales market through population stability, sustainable growth, a confident and buoyant property market and the potential for the immigrant workforce to purchase properties.