June 2018 - NewsletterPosted on: 12th June 2018
Dubai’s modern history began in the early 19th Century when its favoured geographic location and coastal inlet permitted the development of a maritime industry focused on fishing and pearling.
An ethos of openness began during this time, as traders and labourers seasonally visited Dubai, staying for only a portion of the year before returning to their home countries. It was also assisted by the various treaties signed with Great Britain including a full tax exemption for all foreign traders in 1894 that brought both stability and business to the area.
Throughout its history, Dubai has been able to adapt to changing internal and external conditions, often planning projects and initiatives many years before actual construction and eventual impact. Look at the example of forward planning in the works of Sheikh Rashid Bin Saeed Al Maktoum, the present Ruler’s father - the dredging of the Creek, construction of Port Rashid and Jebel Ali Port, Al Shindagha Tunnel under the Creek, Dubai Drydocks, and the World Trade Centre, all completed during the 1970s and 1980s.
During the early 2000s when an unrestricted real estate market threatened to harm its reputation, Dubai launched RERA and put in place strict rules for both developers and investors.
The recent announcement of the ten-year visa and 100% foreign ownership of expatriate businesses is a continuation of this planning. Though many in the media reacted with surprise to the news, it had been planned for several years, anticipating a time when it was required to be implemented to meet a need within the community.
Currently, foreign investors may hold 100% ownership of their companies in UAE’s free zones; however, within the rest of the UAE territory, companies must be at least 51% owned by UAE nationals. It is unclear whether the 100% foreign ownership permission will apply across the board, or will be limited to certain industries.
Visas are generally linked to the employment status of a person, and their employer, and issued for a maximum of three years. Now, certain categories of expatriates will qualify for up to 10-year residency visas. Also, selected students studying in the UAE will be able to obtain 5-year residency visas.
The new legislation is due to be in place later this year.
So why now?
Look at the wording of the announcement: “At today's Cabinet meeting, we decided to allow 100% foreign ownership of companies in UAE, with a ten-year visa for investors, scientists, doctors, engineers, entrepreneurs and innovators. The UAE has always welcomed, and always will, innovators and business leaders…Our open society, tolerant values, excellent infrastructure and flexible legislation, offer the best environment for international investment and exceptional talent.”
The key reasons for the initiative reflect old values developed from over 200 years of history as a city that welcomes people - an open society with tolerant values.
There are very few cities left in the world today where foreigners can easily move to, live and work in an environment of dizzying futuristic architecture, luxury shopping, excellence in diverse global cuisines, and infrastructure that aims to be the best in the world.
Business people have always appreciated Dubai’s hospitality, but today with this announcement, it offers the key factors that ultimately contribute to both individual and corporate business success - maturity, certainty, and stability.
Dubai has this knack of getting it right - coming up with timely solutions to meet a previously identified need.