Since the start of the pandemic, the UAE has been working tirelessly to update policies and create reform in a bid to meet its ambition to be in the Top 10 for global foreign direct investment (FDI) by 2030. The new visa regulations, including the Golden Visa and Green Visa, are the latest complementary government policy to be announced, targeting talent attraction.
The Kearney FDI Confidence Index 2022 showed the UAE rose one place to 14th in the world and is the second-highest developing nation behind China, as FDI begins to bounce back following the devastating impact of COVID-19 on investor confidence.
The Golden Visa will see the eligibility criteria for the 10-year residency permit expanded from September 2022, and a five-year Green Visa was also introduced, aimed at exceptional talents, skilled professionals, freelancers, investors, and entrepreneurs.
This distinguishes the UAE from many countries, where reforms have only focused on the business environment in order to draw in FDI. Having first introduced the Golden Visa in 2019, the policy was initially aimed at those who provided significant investment or offered valuable contribution over years. The latest changes make the new visa regulations more forward-looking and dynamic, and open up the UAE labour market to a greater pool of talent.
The value of talent in attracting, but also maintaining, FDI cannot be underestimated. The Kearney FDI Attractiveness ranking shows ‘Talent/skill level of labour pool’ is in the Top 10 factors determining investment intentions. Its importance has grown compared to the 2021 survey and continue to grow, as the digital economy begins to take shape.
Talent draws in FDI too
Visa reforms have the potential to expand the pool of labour that will draw in FDI, rather than investors also having to plan to attract labour following an investment. In theory, this creates a virtuous cycle, whereby deeper talent pools attract investment and which creates further job opportunities.
Coupled with the longevity and security of the visas, those migrating will be encouraged to adopt a more permanent mindset, which will likely lead to greater investment in local real estate and support the UAE’s financial sector. With a less transient pool of labour, investor confidence will also rise with the knowledge that business expansion can be driven through workforce investment, generating long-term return and reducing the risk from high staff turnover.
The reforms to the visa regulation seem an important step for attracting and retaining talent and this will increase the UAE’s attractiveness to investors. COVID-19 has caused significant change, disrupting the job market and accelerating digital transformation, which has created a period of transition for many.
This has led to Dubai’s population surpassing 3.5 million people, following a post-pandemic rise in migration. The UAE has moved swiftly to introduce new visa reforms to attract talent, maximising the opportunity of an unsettled job market.
Future-proof job market
With talent central to future-proofing the job market, the UAE’s broadening of the visa rules signals it sees a future beyond the traditional definition of skilled labour. Technology is paving the way, and the UAE has acted promptly to position itself for a new reality that will centre around the fourth industrial revolution.
By making the visas accessible to multiple different groups of individuals - including exceptional students - the UAE leadership recognises the depth of talent needed for the economy to flourish.
The UAE’s 2030 FDI target requires planning toward a future that may look very different. This policy reform ties in with the broader government strategy that is rapidly transitioning towards the digital economy.
The post-pandemic era has seen the UAE shift its FDI strategy away from encouraging investment through low-cost labour and tax incentives, to evolving its policies to increase investor confidence – ahead of many other developing nations. The UAE has recognised the future - and well prepared for the fourth industrial revolution.