Over the past decades,the United Arab Emirates has changed its rules to attract money and investors to stir new business in a world with fewer oil reserve money. Now, it’s turning its attention to a slightly different issue: the talent to handle all that.
The government recently allowed foreigners to own 100% of businesses in the emirates and reformed its visa process, giving foreigners up to 10 years of permanent residency. When he announced the changes earlier this month, Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s prime minister and the ruler of Dubai, said he wants the UAE to be an incubator for exceptional talent and a preferred destination for international investors.
Currently, foreigners have to partner with a local owner in most parts of the region, while foreigners could be residents in the UAE for three years. “This goes a long way to being able to specifically target and attract certain skill sets and sectors that make Dubai more competitive and attractive,” says Jonathan Holmes, Korn Ferry’s managing director for the Middle East. The changes are expected to be in effect by year’s end.
The emirates are switching to a concept of permanent residency similar to the one Singapore uses. The Asian city-state offers renewable five-year permanent residence visas to entrepreneurs and investors, who in turn can get similar visas for their families. The permanent visas make it easier for non-Singapore citizens to move there, set up businesses, buy property, and even save money for healthcare or education.
Singapore’s visa concept has been on the radar of Dubai’s leaders for some time, Holmes says. Dubai’s new program will offer 10-year visas for expat specialists in medicine, science, research, and technical fields—and for their families. Students in the UAE will also be able to get five-year visas, and “exceptional” graduates could remain in the country for 10 years (at the moment, students have to renew their visas annually).
Over the decades and now more recently, the emirates in general, and Dubai in particular, have tried to diversify their economy away from oil, making huge forays into tourism and finance. While oil still is the major economic driver, the government wants it to account for less than 70% of foreign investment by 2021 (it is 80% now). But like many other parts of the world, the UAE faces a talent shortage of high-skilled workers. Left unchecked, in 2030 that talent shortage could result in about $8.5 trillion, worldwide in unrealized annual revenues, according to a new Korn Ferry report, with the UAE itself missing out on more than $15 billion. The UAE has fewer than 2 million Emirati citizens along with about 8 million expatriates. Realizing that educating its own citizens won’t be able to solve the skills shortage singlehandedly, the UAE government hopes the remodeled visa rules can attract more talented foreigners to close the gap. (Dubai is also aiming to make all of its residents happier.)
One industry that is on the UAE’s radar is fintech, Holmes says. The nascent industry has hubs in London, Singapore, and Hong Kong, but many of the people working there aren’t citizens of the United Kingdom, Singapore, or China, respectively. The extended visas could help build a new community in Dubai, Holmes says.