H1B visa fee surge: America's loss is UAE's gain, say recruitment consultants

Dubai: The United States' decision to dramatically increase H1B visa sponsorship fees could trigger a massive talent migration to the Gulf, particularly the UAE, according to leading recruitment consultants and education experts.

The new policy, which raises the annual fee for sponsoring H1B visa holders to $100,000, is expected to reshape global employment patterns and potentially strengthen the UAE’s position as a technology hub.

“Both companies and talent will migrate here,” predicts Mahesh Shahdadpuri, Founder & CEO - TASC Group of Companies. “What does this region have to offer? One of the best infrastructures in the world, zero tax, great lifestyle – and the region is one of the fastest growing, investing billions into AI."

Major US technology companies, including Meta, Google, and Microsoft, already have a sizeable presence in the region, and these new costs could encourage the companies to expand their Gulf operations to tap into available talent, according to Shahdadpuri. "These companies would like to attract and hire more here to develop services for their global operations."

For example, Microsoft invested $1.5 billion in G42, the Abu Dhabi-based AI technology company, for a minority stake and joined its board of directors in April 2024. The US has also approved the sale of Nvidia chips to G42, supporting the Gulf country's efforts to become a global leader in artificial intelligence.

Dr Sathya Menon, Group CEO of Blue Ocean Corporation, believes Dubai holds advantages over other regional competitors. "Dubai will benefit more than Singapore – Dubai is expandable, whilst Singapore has limits for expansion," he explained.

"From an Asian and Indian perspective, Dubai is the second home for most people. It keeps them closer to home with better connectivity, and for US companies, many of their data centres are already in Europe,” said Menon.

The immediate impact could disrupt established talent supply chains, particularly affecting major Indian IT services companies. "A big company like TCS processes 5,000 H1Bs a year," said Shahdadpuri. "These companies will need to look at alternative talent supplies when certain critical projects can't access the skills they need."

However, the long-term implications could be more profound. "The future Satya Nadellas and Sundar Pichais that came on H1Bs – where will they come from? The US risks compromising the long-term generation of human talent," warns Shahdadpuri.

Universities in the region are already adapting to capitalise on this potential shift. Lourd Johnson Fernando, Deputy Manager of Corporate Alliances at Manipal Academy of Higher Education Dubai, reports strategic preparations are underway.

"We are embedding advanced skills such as AI, cybersecurity, data analytics, and cross-cultural communication into our career readiness programmes," Fernando said. "This ensures our students are positioned as globally competitive talent for multinational firms relocating or expanding in the Gulf."

The fee increase affects approximately 85,000 highly qualified professionals annually – including IT workers, financial analysts, and business graduates. "These H1B workers were earning significantly and spending in the US economy. They will spend in the UAE and Saudi Arabia instead – our economies will boom," predicts Shahdadpuri.

For American companies, the $100,000 fee represents more than double the previous cost, though some analysts suggest it may not deter larger corporations. "For a CEO with a million-dollar salary, an additional $100,000 is not a big deal," notes Shahdadpuri.

Despite the geographical shift, compensation packages are expected to adjust to local market conditions. "A million-dollar salary in the US, taxed at 40%, becomes $700-800k. Salaries will conform to local market conditions," explains Shahdadpuri.

Starting salaries for technology professionals in the US currently range from $4,000 to $5,000 monthly.

The shift could also benefit multiple Gulf states, with Saudi Arabia's growing technology sector also positioned to gain. "Saudi is growing well – it's becoming a pretty good place for the overseas workforce that was migrating to the US," observed Shahdadpuri.

However, Dubai's established infrastructure and connectivity advantages position it as the primary beneficiary of any talent exodus from traditional US-bound migration patterns.

The policy change raises questions about America's ability to maintain its technological edge. "The whole premise is built on the American Dream," said Shahdadpuri. "I would have preferred a system that validates and addresses abuse concerns whilst maintaining space for workers who contribute positively to the economy."

For the UAE and broader Gulf region, the development presents an unprecedented opportunity to accelerate their transformation into global technology hubs, potentially reshaping the international talent landscape for years to come.