DUBAI 15 July 2o18: We have witnessed sweeping immigration reforms that are set to shape the future of the UAE.
On May 20th, it was announced that the UAE Cabinet identified certain highly technical fields and professions for longer-term residency (up to 10 years).
The cabinet also announced that ‘mainland’ UAE would soon be open to foreign investment through 100% ownership in certain industries, without the need of a local, majority stake-holding, partner.
Later that day, it was announced that the new measures would be rolled-out by Q3 2018.
While the overall reception of the announcement has been positive, with the population taking to social media to express their interest in these changes, specific procedural requirements (and their limitations) are not yet clear.
Certain questions are on the forefront of everyone’s mind:
- What does this mean for the 8.5 million expats that call the UAE their home
- What will these changes look like and
- What does this mean for the UAE business environment as a whole?
Background
To begin answering these questions, some background is important. The new visa law is in line with the general theme of recent Ministerial Resolutions, the updated Commercial Companies Law, the UAE’s Vision 2021, and Centennial 2071 – the latter two catering heavily to innovation, economic development, and business resilience (especially for SMEs).
The UAE is actively looking to position itself as a hub for innovation and thought leadership, with government-led initiatives leading the way for this change.
In fact, the national priorities include, but are not limited to, maintaining world-class healthcare facilities, building a competitive knowledge economy, and establishing first-rate education systems – all of which have spurred recent changes to visa/permit categories.
Target Professions
Given that the population is at the heart of driving this vision, it is no surprise that the UAE is giving even greater consideration to highly-skilled employees. The professions that have been specifically identified for longer-term residency (up to 10 years) pertain to the fields of medicine, research, engineering, academics, and scientific innovation – all technical fields that attract a skilled, white-collar work force.
The country’s primary immigration authorities, the Ministry of Human Resources and Emiratisation (Mohre), the General Directorate of Residency and Foreigners’ Affairs (GDRFA), the Federal Authority for Identify and Citizenship (ICA), and the Ministry of Foreign Affairs (Mofa) also actively recruit exceptional students and innovators graduating from various Information and Communications Technology (ICT) disciplines.
The underlying idea is for each of these authorities to stay-up-to-date on global technological trends and introduce these for all citizens and residents to benefit from.
What is Coming?
Now, what can residents of the UAE expect in the upcoming months? Given what is known about the announcement and its underlying drivers, we can speculate the following:
Corporate Sponsorship: Firstly, with procedural details still unclear at these very preliminary stages, it is safe to assume significant changes will be introduced to the underlying framework in order to make way for implementation. The UAE immigration framework centres on the concept of corporate sponsorship. The introduction of 10-year residence permits could look to delineate employment from sponsorship.
Since specific, highly technical professions have been identified, we could speculate this to be a transition into alternative routes that permit “self-sponsorship” similar to practices in other parts of the world whereby legal residency may be granted on the basis of a points-based assessment system that takes into consideration academic qualifications, years of experience, and even niche specialisations that tie in with the government’s broader policies.
Neighbouring Gulf States such as Bahrain already have self-sponsorship systems in place, while Saudi Arabia’s Vision 2030 paves the way for the introduction of Green Cards permitting longer-term legal residency. Although it is difficult to conclude at this stage whether these 10-year residence permits will be de-attached from a corporate sponsor, it is certainly conceivable that some degree of flexibility, whether through part-time work or through freelancing, would be granted.
Student Visas: Secondly, this could have a significant impact for students seeking jobs after graduation; more specifically, the ability for unemployed students to stay in the country once they are no longer sponsored by their university. Currently, students generally obtain residence permits that are valid for one year and can be renewed upon expiry. However, under the proposed framework, students that have demonstrated an exceptional understanding of their relevant discipline can remain in the country for much longer.
Male students above the age of 18 years are going to be the biggest group of beneficiaries of this change as they cannot, under the existing framework, be sponsored by their parent or guardian. This too falls in line with immigration policies in other countries such as the United States and Canada, which have historically been considered two of the most attractive destinations for high-performing international students.
100% Ownership: Lastly, 100% ownership in the mainland UAE will certainly have a significant impact on small business owners and investors, many of whom were previously limited to setting up within Free Zones and thus limiting their operational reach within the country.
Although this comes as a natural progression of the foundations laid out during the recent amendments to the Commercial Companies Law, it is possible this amendment will play out in tandem with recent Emiratisation initiatives.
In essence, although the business environment will be more flexible in the near future, potential investors should anticipate measures that look to further strengthen (and enforce) the existing Emiratisation framework and ultimately tie-in with the UAE’s longer-term national agenda.
As the dust settles on what is perhaps the UAE’s biggest immigration announcement in recent years, it is important to understand the underlying drivers to better anticipate, and plan for, implementation and the relevant procedural requirements. Future announcements will no doubt ensue, as the positive impact on the UAE business environment, and society as a whole, becomes increasingly clear.
Note: The author is with immigration specialists firm of Fragomen.