The government strategy is to retain investors, talents and professionals, including retirees, to continue to contribute to the growth and efficiency of the economy.
“The long-term visas, almost permanent residency, retiree-scheme and pension funds will generate a new group of potential investors. Along the way, a new breed of client is emerging for professional advisers. This market is waiting to be tapped effectively,” said R.Ramesh, chief executive, Veracity Consulting, UAE.
The UAE started issuing long-terms visas and more than a dozen prominent businessmen in the UAE have been issued the Golden Residence Permit, called the Golden Card, by the Federal Authority for Identity and Citizenship (ICA).
This forms part of the Investors Permanent Residence System implemented under a UAE Cabinet’s Resolution.
The Golden Card is part of a permanent residency scheme for investors, entrepreneurs, specialised talents, researchers and outstanding students residing in the UAE, with 6,800 residents from 70 countries already identified as qualifying for the card.
The benefits of the card also extend to the recipients’ immediate family members such as their wife and children who are also provided with a permanent residency status.
Earlier, the Federal Authority for Identity and Citizenship announced three new services:
- Six-month visa with several trips to complete the procedures for residency of an investor,
- Six-month visa with several trips to complete long-term residency procedures for both entrepreneurs and outstanding students,
- Six-month visa with only one trip to complete the residency procedures for the talented individuals.
Property market boost
The UAE’s property market, which is witnessing a revival after a long lull, got a shot in the arm in the form of the long-term visa for property investors.
The new visa rules have made it easier for those who view Dubai as a hub city to settle down and invest in new ventures. International investors had always looked at Dubai real estate as a source of steady returns.
In 2001, the Dubai government allowed foreigners to have a 99-year lease of certain properties and in 2002, a decree allowed them to buy property on freehold ownership.
The two initiatives generated interest from real estate investors in Dubai’s residential property at that time and later the market has seen a huge surge in sales, especially in off-plan properties.
The golden card system is likely to fetch buyers for around 59,800 properties scheduled for delivery in Dubai this year.
The new batch of investors, mainly the retirees, ends up putting their money in properties lured by glitzy promotions. Investment advisers have not effectively exploited these potential property investors.
NRI advisers have traditionally advised expatriates a bouquet of investments in securities, gold and funds of funds. Now they are increasingly recommending property market, in the UAE as well as India.
The government is providing retirement options for expats and they are looking at investments from a long-term perspective.
The UAE’s Federal Authority for Government Human Resources (FAHR) is planning to introduce a savings retirement fund for expatriate employees that will run in addition to the existing end-of-service gratuity system.
Under the current system, employees leaving a UAE-based organisation receive a gratuity payment after completing a minimum of one year of service.
“A sizeable number of expatriates plan to continue working in the UAE after retirement. Though a pension fund is in the offing and property investment is becoming attractive, many are clueless on where to invest their money for better returns and safety.
“Usually they have a herd mentality that ends up in either some ponzi schemes or less attractive funds,” said Jojo James, chief executive officer of Dubai-based Fosbury Wealth Managers, and partner, Tamim Chartered Accountants.
Investment advisers should come out in the open and canvass this class of potential investors by employing qualified consultants, James added.