The law, due to come into effect in 2019, means any expat can qualify for the long-term visa as long as they have an investment in a property worth AED2m ($545,000, £416,000, €468,000) or have savings of no less than AED1m, or have an active income of no less than AED20,000 per month.
If an expat retiree meets these requirements and is over 55, they can apply for a five-year visa which would be automatically renewed.
Currently, expats in the UAE are expected to retire at 60 with an option to work until 65 with special approval from the authorities.
The retirement visa is part of a series of moves by the second-largest Gulf economy to diversify its economy away from a dependence on oil and oil-related services.
Lawmakers have already approved a 10-year visa for investors, innovators and talented specialists in the medical, scientific, research and technical fields, and have plans to introduce a law that will allow foreigners to own companies outright.
The government has also introduced a six-month visa for jobseekers, which takes away the requirement to leave the country just to re-enter it in order to extend a visa.
Nigel Green, founder and chief executive deVere Group, said the visa laws would make the UAE a more attractive location for overseas talent.
“Dubai and Abu Dhabi are perennially popular destinations for ambitious expatriates looking to embark upon or further their careers because of the incredible possibilities offered in terms of finance, trade and commerce.
“But they will become even more attractive locations for overseas talent thanks to the government passing these new laws that allow expats to stay on in the UAE long after they retire,” Green said in a statement.