In 2019, the United Arab Emirates made changes that allowed foreigners to obtain extended residency visas after they retire, a major policy shift designed to give expatriates a bigger stake in the economy and foster longer-term growth.
Foreign residents from around the globe make up more than 80% of the UAE 's current population. Expats have for decades been a mainstay of the UAE's economy by working, buying homes and splashing their cash in the local shops and other local establishments.
However, they were only welcome as long as they could work, meaning that once you retire your future in UAE is uncertain. Now there have been some big changes to the visa residency for expats, in this article we’ll be looking at:
New regulations have come into play that give 100% foreign ownership of companies in the UAE with a 10-year visa for investors, scientists, doctors, engineers, entrepreneurs and innovators. This will be a major incentive to attract foreign direct investment (FDI) as well as the top talent into the UAE.
This is currently only permitted in the free zones, allowing 100% foreign ownership of companies will make the UAE a much more attractive destination for investors looking to acquire local companies, or set up businesses in the UAE.
Investors will be eligible for either a five or ten-year residency visa, depending on the size of their investment in the UAE. An investor’s spouse, children, as well as one executive director and one adviser will also be eligible to obtain long-term visas.
This is great news for people who always loved to work and live in the UAE, but didn’t have anywhere to go after retirement and struggled to relocate themselves.
“The move will add value to the UAE’s economy as it will encourage professionals to live and work in the country post-retirement and attract people of advanced skills amid the UAE’s goals to build a knowledge-based economy,” Dr Al Khazraji added.
So what is the 5-year residency visa?
The new residency rules state that expatriates over the age of 55 will be granted a five-year retirement visa if they meet a set of clauses, with the possibility of renewal for those retirees who wish to stay longer, should they still meet the following eligibility criteria:
What are the benefits?
For a long time, living in the UAE has been seen as a short-term plan with a goal to earn money and accumulate savings for the future before moving back home again.
This was the most feasible plan, as expats had to be sponsored by a company or family member to be in the UAE. The announcement of the 5-year residence visa for retirees, paired with the earlier announced 10-year visa and 100% ownership of foreign companies is shifting the dynamics for expats in the UAE.
The government plans to change the way end-of-service benefits are collected so that contributions from employers or institutions will be paid to the beneficiary employee at once, upon retirement or termination, plus investment returns, making the employee a partner in investment decisions.
The financial free zone is planning to replace its current end of service gratuity system, with a lump sum paid to a worker when they leave employment, with the DIFC Employee Workplace Savings (DEWS) Trust savings scheme.
Setting up investment funds for the retirement benefits of UAE expats will help employees and officials to properly plan for the future by taking advantage of end of service benefits, and utilise their financial resources after retirement.
The shift from “defined benefit schemes” to “defined contribution schemes” is
This is a type of pension plan whereby an employer pays directly into a specified pension payment or lump sum, sometimes even a combination. The employee has limited say in where this money is invested and can only receive this at the year of retirement.
This is a new type of pension planning, which allows the employer to contribute any portion of their earnings to a scheme and their employer will match this within the agreements of the employment contract.
The contributions from both parties are invested at the discretion of the employee into mutual funds like stocks and annuities. This type of plan is very flexible and can move with the employee from job to job.
Retirement planning can be a daunting task, but we understand that you won’t be working forever and that should be something to look forward to. The decisions you make for your retirement today will determine your future. At Ai InvestmentGroup, we create custom strategies to position you well for all unforeseen changes or challenges ahead.