UAE's traditionally transient expatriate population may now be more inclined to stay and will contribute to stable demand in the property market, according to experts
Allowing full foreign ownership in companies and granting long-term visas to some investors and professionals will help encourage foreign investment and have a positive impact on the UAE’s real estate sector, according to experts.
The new rules will allow for residency visas of up to 10 years for specialists in scientific, medical, research and technical fields, and are a departure from previous regulations which called for expatriates establishing businesses to have a local partner owning 51 percent of the venture.
According to experts, the new rules will help encourage more expatriates to establish businesses in the UAE.
“Many people held back from investing here as they felt there was no long-term tenure, dependent on a short-term visa, etc,” Chavan Bhogaita, the head of market insights and strategy at First Abu Dhabi Bank told Bloomberg.
“Now with a 10-year visa and 100 percent foreign ownership, investors and people looking to set up and grow business here would have more confidence.”
Jaap Meijer, the managing director and head of equity research at Arqaam Capital Ltd. Investment bank told Bloomberg that the bank expects “significant positive effect” on foreign direct investments to the UAE.
“100 percent ownership will help spur FDIs outside the existing free-zones,” he said.
According to many experts, the decision should also a positive effect on the real estate sector, as the UAE’s expatriate population is encouraged to remain in the country for longer periods of time.
“Longevity of residence for expats is going to be a game changer as the population’s historically transient nature gives way to semi-permanency,” Faisal Durrani, partner and head of research at Cluttons, told Arabian Business.
“The move will clearly go some way to stemming the loss of human talent from the UAE and will also contribute to more stable and sustainable demand for residential and commercial property from domestic buyers.”
“This privileged group of expats will undoubtedly feel a greater sense of belonging, which will facilitate the emergency of stronger and deeper communities,” he added.
Similarly, Core Savills partner Edward Macura said that the announcement will bring a boost to both supply and demand in the property sector, “by way of attracting and retaining long-term investors and also skills professionals.”
“Direct and indirect effects are expected to come into play, such as population stabilization and growth, renewed confidence in the property market and an increase in expat end-user purchasers, who are likely to invest in their own homes within the UAE instead of repatriation to their home markets,” he added.For all the latest real estate 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.