The UAE provide citizenship to foreigners and see financial potential
DUBAI, United Arab Emirates – The United Arab Emirates announced that the citizenship of the Emirates will now be officially available to foreigners, an important first for the Gulf state.
The move is a significant change of direction for a country whose economy is heavily dependent on expatriates, for whom residence is usually dependent on their work visa.
Ranked as one of the best in the world for mobility, the UAE pass is offered to foreigners and professionals, including “Investors, Doctors, Specialists, Inventors, Scientists, Talent, Intellectuals, Artists and Their Families,” the announcement.
“The United Arab Emirates has approved changes that will allow investors, professionals, special talent and their families to acquire Emirates citizenship and passport under certain conditions,” UAE government news agency WAM said in one Press release on Saturday.
“The move aims to appreciate the talent and skills in the UAE and attract smarter minds to the Emirati community, which will contribute to the development and prosperity of the country.”
However, foreigners cannot apply for citizenship. They have to be nominated by royals or UAE officials and the country’s cabinet would have the final say.
A sunbather watches as people play during a beach volleyball tournament in the Gulf emirate of Dubai on July 24, 2020.
KARIM SAHIB | AFP via Getty Images
The announcement, which has no precedent in the Gulf region, reflects how the little Arab sheikh plans to keep top talent as the coronavirus pandemic forced tens of thousands of expats to leave last year. Almost 90% of the UAE’s 10 million or so residents are foreigners.
While many specific details of the new policy are yet to be seen, this is a big deal for the future of the UAE, says Taufiq Rahim, a Dubai-based senior fellow on the New America Think Tank’s international security program.
“The path to citizenship for expatriates is limited and unclear in detail today, but a transformative development for the future,” Rahim told CNBC. “The announcement broke the barrier on a previously taboo topic and will lead to greater investment in the UAE over the long term.”
He added, “In the short term, however, it’s more of a feel-good story than a driver of economic returns.”
A series of reforms that are friendly to foreigners
The move is an important step in domestic politics and follows several months of historic reforms and diplomatic breakthroughs for the Middle East’s commercial and business hub. In August, the UAE became the first Gulf country to normalize relations and opened direct flights with Israel.
In the months that followed, the officially Muslim country introduced reforms that legalized coexistence, allowed the purchase of alcohol without a license, and allowed 100% foreign business ownership, compared to previous requirements of 51% local ownership outside a free zone.
UAE foreign residents typically have renewable visas that are tied to their employment and must be renewed every three years. This means they have little incentive to invest in the country for the long term and are discouraged from investing in areas such as real estate, a major pillar of the country’s economy.
“The expatriate model used to be,” Let’s make as much of this country as we can and then move home, “said Karim Jetha, chief investment officer at Longdean Capital, an emerging market wealth management firm.
“The new mindset that the government is trying to inspire is,” If you give this land as much as you can, you can call it home. ”
Greater investment incentives
At the end of 2020, the government of the United Arab Emirates expanded its existing “golden” visa program, which grants certain professionals and graduates a ten-year stay. Five-year retirement visas have also been introduced for those above a certain income level. Most recently, a remote work visa was introduced, which allows people who are employed abroad to stay for one year, provided they meet a salary requirement.
However, citizenship would allow permanent ownership of the land and increase the number of willing investors. For example, investors who want citizenship must own property in the UAE.
“The decision to grant citizenship is the latest in a series of moves by the United Arab Emirates government to make society more inclusive and encourage long-term expatriates,” said Jetha.
Shai Zamanian, a US licensed attorney who helps UAE foreigners relocate to the US, sees unprecedented opportunities in this for families seeking permanent residence in a stable market but not previously staying in the UAE indefinitely could.
“One of the immediate effects on the UAE economy will be families now choosing to make bigger investments in their businesses, real estate and long-term investments in the UAE knowing they don’t have to leave in the end,” said Zamanian , Director at the American Legal Center in Dubai.
UAE citizens are currently receiving very attractive benefits: high tax-free income; subsidized education, health care, and fuel; Incentive packages for buying houses and land; and pensions and retirement benefits from the age of 49.
“However, it cannot be sustainable to offer newly naturalized citizens the same benefits,” said Zamanian. Part of the complexity, the attorney added, the details of which are yet to be explained, “ultimately lies in the benefits that the newly naturalized citizen might receive.”