The UAE’s step to provide citizenship to expatriates is a game-changer setting up the foundation for sustained growth, raising the country’s knowledge based-economy and its property market.
The decision will help local businesses attract and keep top talent and there is a potential overabundance for the financial sector in the country, with more savings staying in the UAE other than being repatriated, as per the analysts.
“It is a positive move that is a continuation of the recent reform agenda aimed at attracting and retaining foreign talent and investment,” said Scott Livermore, chief economist and managing director at Oxford Economics. “It potentially accelerates contribution foreigners make to the UAE economy.“
“The most immediate impact is likely to be felt in real estate as it increases the likelihood that individuals remain in the UAE for the long term and hence invest in property.“
On Saturday, the UAE declared it made unparalleled legal laws that allow selected expatriates to have citizenship with the goal of attracting talent. Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai provided the process for investors, specialized talents, and professionals including scientists, doctors, engineers, artists, authors and their families to become citizens of the Arab world’s second-largest economy.
The UAE cabinet, local Emiri courts, and executive councils will nominate those eligible for citizenship under criteria set for each category.
The new development “sets the base for the more sustained economic growth of the country“, said Jaap Meijer, managing director and head of research at Dubai-based investment bank Arqaam Capital. “It’s a historical move and could be further liberalized down the line.“
Countries like the UK and some European nations have gained in terms of long-term reservation of talent and investment flows, he provided, putting on that the UAE has a very strong passport hence making it very attractive for skilled professionals.
A UAE passport holder can travel to 173 countries without the need for pre-visa demand and is placed in the 16th position among the strongest in the world by citizenship firm Henley and Partners, in its Passport Index of 2021.
“While it will help many people who have played a significant role in the development of the country through the years … it will also help to attract new talent,” said Dr. Azad Moopen, founder chairman and managing director of Aster DM Healthcare in the UAE. “This will further propel the UAE to be one among the most progressive countries in the world.“
The citizenship capability is part of the government’s continuous efforts to change its 50-year extending goals. In recent months, the country’s leadership has provided various changes to legislation in connection to immigration and commerce.
These contain laws to the commercial companies’ law which allows 100 percent foreign title of businesses and commercial transactions law-making such as the legitimizing of cheques. The government has also revised bankruptcy and consumer protection laws.
“The biggest impact will probably be on the knowledge-based [economic] sectors … and these are more of a focus of the UAE’s growth strategy,” Mr. Livermore said.
“To stimulate growth in these sectors, the UAE needs to attract – and as importantly retain – talent and that has been the focus of much of the recent reforms in the UAE.”
Carla Slim, Standard Chartered’s Middle East North Africa and Pakistan economist said the latest measures are part and parcel of the country’s goal to “nurture new economic growth drivers, such as innovation and technology“, over from the traditional ones.
“This will have the natural consequence of expanding the high-skilled labor force,” she said.
The real estate sector that lowered on the back of a slump in oil prices in 2014 and encountered further headwinds in current quarters on oversupply concerns and the Covid-19 pandemic, is to be expected to see a growth in demand from long-term investors, as per the Farhad Azizi, chief executive of Azizi Developments.
Taimoor Labib, founding partner and head of Mena at Affirma Capital, said the latest development “could help revive demand over the medium-term in the housing and stock markets particularly after the expected boost from this year’s World Expo in Dubai“.