ECONOMY

UAE eases residency rules in bid to lure $150bn in foreign investment

United Arab Emirates updates

The United Arab Emirates has launched 50 economic initiatives aimed at making the country more competitive as it seeks to diversify its oil-dependent economy, including a drive to attract $150bn in overseas investment within nine years.

Ministers unveiled some of the reforms — which form the Gulf state’s Projects of the 50 programme that marks its golden jubilee — on Sunday. They include liberalising residency rules to attract and retain skilled workers; the emirates have for decades tied residency to employment, triggering expatriate departures during economic downturns. 

The UAE, which was founded in 1971, will also host a global summit next year to highlight investment opportunities with the aim of drawing $150bn into domestic projects by 2030, ministers said.

“Over the past five decades, the UAE has opened its doors, ports, skies and economic sectors to become a destination for all,” said Mohammad al-Gergawi, minister of cabinet affairs. “Projects of the 50 presents to the world a unified economic and investment identity for the next developmental stage.”

The measures announced on Sunday include new visa categories for freelancers and entrepreneurs, allowing skilled workers greater flexibility in sponsoring family members and more time to find a job if made redundant before being required to leave the country.

Other initiatives include allocation of $1.36bn to a national development bank to support Emirati projects and another $1.36bn to fund the adoption of advanced technology within industry, in a bid to raise productivity by 30 per cent.

The country will also target a 10 per cent increase in exports to 10 key markets, including China and the UK, as part of a 14 per cent growth in investment outflows by 2030.

The reform are the latest UAE attempt to boost efforts to diversify its hydrocarbon-dependent economy and prepare for a post-oil future. The government has over the past year shifted its focus from regional geopolitics towards economic development in a bid to boost growth as the country charts a path out of the coronavirus pandemic. 

The initiatives come as the Gulf state, especially the regional commercial hub of Dubai, faces increasing economic rivalry from its larger neighbour Saudi Arabia as the Middle East’s biggest economy introduces its own reforms to lure inward investment. 

Riyadh has threatened to cut multinationals out of lucrative government contracts if they do not relocate their regional headquarters to the country and has removed tariff concessions on imports from the UAE.

The UAE has already unveiled social reforms to make the country more attractive to expatriates, who make up 90 per cent of the 10m population. These include allowing cohabitation by unmarried couples, decriminalising the consumption of alcohol and allowing expatriates to use their home countries’ legal systems for personal matters such as divorce. 

Since earlier this year, the country has also allowed foreigners to own businesses outright, removing the requirement for onshore companies to be majority owned by an Emirati, and last year introduced a “golden visa” that allows extended 10-year residency periods for skilled expatriates. 

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