Dubai: The new visa rules in the UAE, which would give some professionals a 10-year visa, would reduce the amount of money expats remit back to their home countries, industry experts said.
Currently 7.8 million expatriates live in the UAE, comprising 85 per cent of the total population. These expats are among the highest savers in the world. About Dh42 billion was remitted last year, with Dh14.8 billion going to India alone.
“Part of the money that the expats currently remit abroad may stay on onshore and be invested in local assets,” said Anita Yadav, head of fixed income research, wholesale banking at Emirates NBD.
The savings could be done in many ways and could be channelled to the local stock markets — the Dubai Financial Market and Abu Dhabi Securities Exchange — and to international markets through asset management companies in the country.
“The steps would help to remove the transitory mindset of expats, making them more likely to invest their savings in the local economy and markets instead of repatriating them back to their home country,” Salman Bajwa, head of asset management at Emirates NBD Asset Management said. “The areas that should benefit the most would be real estate and capital markets as residents can more easily put down roots and invest for the long term,” Bajwa said.
The UAE will also attract money from foreign investors, according to Adeeb Ahmad, Managing Director, LuLu Financial Group. “The decisions taken by the UAE Cabinet will boost international investments while fostering talent in a number of areas of expertise,” Ahamed said.
On the private equity side, according to Abhishek Sharma, chief executive officer, Foundation Holdings, the money may get channelled into various attractive themes.
“With this transformational UAE announcement, investment firms and PE [private equity] funds have the opportunity to latch onto the fundamental forces that have long made health care and education into such compelling investments: an ageing population, the rising prevalence of chronic disease, the continuous development of innovative drugs and devices, among others,” Sharma said.
According to a study, private equity raised a record $453 billion from investors in 2017 globally, bringing the available pool of money to invest to $1 trillion. The amount of money raised exceeded the previous record of $414 billion set in 2007.
As far as returns were concerned, health care companies in India have returned 60 per cent in investments on an average of the 23 companies that went public since 2015.