The UAE’s new foreign ownership and visa rules send a message that the country is “open for business” and help employers while at the same time freeing Emiratis of the liabilities they face as local partners, according to lawyers, free zone experts and management consultants.
Speaking to Arabian Business, Chris Macbeth, a counsel at Cleary Gottlieb Steen & Hamilton law firm in Abu Dhabi, said that while the exact details of the changes have yet to be revealed, the new rules should have an overall positive effect on the country’s investment environment.
“By announcing this change, the UAE government is sending a clear message that the UAE is very much open for business, not only in the free zones but across the country as a whole,” he said.
In his remarks, Macbeth added that the huge change will not be without “negative consequences” for some.
“Some nominal local partners or sponsors will not be pleased and the future growth of some of the smaller free zones will probably be affected as new investors locate onshore instead,” he said. “However, on balance, the change should lead to increased investment in the UAE and that is to be welcomed.”
Virtuzone chairman Neil Petch, however, said that the rules will be welcomed by UAE nationals, who will now largely be free of being held legally responsible for expatriate partners.
“The new mandate will remove the worry of personality liability from PSCs (professional services company) whilst at the same time not removing the revenue stream for local agents which would have caused resistance to this highly positive move,” he said.
"Indeed, Emiratis exposed to liabilities from defaulting expats would no longer concern. In short, [it’s] a win-win, boosting confidence and thus the economy.”
Suellen Tomlinson, a senior client partner at Korn Ferry, a leadership, organization and management consulting firm, said that one of the main benefits of the law is in that it provides stability for the “emerging workforce” leaving university and the development of skills that align with the future of work.
“Top students who are finding their way into the workforce will have a longer window of opportunity to find their feet early in their career, identifying the right companies to invest in them and develop their behavioural and technical skills as they transition into the workforce,” she said.
“Employers will also have to a longer window to spot talent and recruit talent that will be encouraged to remain and look for work locally.”
Tomlinson added that that the new rules will also create a “more stable ecosystem” in which students can explore different career paths and first – and second – jobs before hitting their professional stride.
“The risk without the ten year visa is that students will only have a few months to secure a job, or have to return to their home country or another country to look for work, rather than remain in the UAE,” she said.
“I think this is a great opportunity for the UAE and one employers will be most grateful for in the future.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.