Dubai: Looking to set up a company in the UAE? ‘Get a lifetime investor visa!’ is an offer you will be made by several business setup consultants in the UAE. But what does it really mean?
To be clear, there is no ‘lifetime visa’ option available officially from the UAE government. Residence visas are issued typically for two or three years, depending on the jurisdiction. So, when business setup companies offer a ‘visa for life’ or a ‘lifetime investor visa’ they essentially offer to help with the process of payment for the visa renewal costs on your behalf, every two or three years. Why? Because they can cover the administrative cost for that within the other charges you pay for, which are incurred as and when your business licence is renewed. The offer is essentially a marketing tactic employed by business setup consultants, offering a bundle of services, according to Sirajudeen Ummer, a Public Relations Officer with Dubai-based First Gate Business Services.
“Some business centres provide such offers, as the visa renewal costs are quite low, especially for the three-year investor visa. The centres pay that cost, instead of the client, and at the time of renewal, they would get the office rent, sponsorship fee and other renewal costs from the client. This is how they factor in the visa renewal costs for the client within their services,” Ummer said. With the visa renewal costs, including Emirates ID application, for a three-year investor visa at around Dh845 in Dubai, this is a cost they can easily absorb, Ummer added.
Some business centres provide such offers, as the visa renewal costs are quite low, especially for the three-year investor visa. The centres pay that cost, instead of the client, and at the time of renewal, they would get the office rent, sponsorship fee and other renewal costs from the client.
Saraa Gheewala, Head of Operations at Virtuzone, a business setup and company formation specialist in the UAE, spoke about how such packages had become popular, particularly during COVID-19 times. Virtuzone also offers a package – VZ4LIFE – along similar lines.
“Despite the global pandemic, we have seen an increasing demand for starting new businesses in the UAE. There is an amazing appetite for entrepreneurship in the UAE and the reasons are many. Some want to pursue a business idea they have had for some time as the costs of setting up a business are at an all-time low, others are looking to start a side hustle to support the income from their current job and some have lost their jobs due to the pandemic and now want to go all in on their own business. What’s common for the majority of aspiring entrepreneurs we are talking to is that they want to make sure their families are secure no matter what happens, plus they are more price sensitive due to the uncertainties brought upon us by COVID-19. For these reasons, we created the product, to make sure that these aspiring entrepreneurs can set up the business they are dreaming of without breaking the bank, while providing security for their families,” Gheewala said.
With business setup consultants paying for the visa renewal, and managing the renewal process from start to finish, it is one less cost which the investor or business owner would not need to worry about. However, when you are looking to setup a company and come across such an offer from agencies on a ‘lifetime investor visa’, you need to find out what the agency is charging you for and how you would continue to have a visa by paying for their services, to determine if it makes financial and business sense for you.
What’s common for the majority of aspiring entrepreneurs we are talking to is that they want to make sure their families are secure no matter what happens, plus they are more price sensitive due to the uncertainties brought upon us by COVID-19. For these reasons, we created the product, to make sure that these aspiring entrepreneurs can set up the business they are dreaming of without breaking the bank, while providing security for their families
Business setup packages
Gheewala also advised aspiring entrepreneurs to ask the right questions before signing up for a service, like the jurisdiction that would apply, depending on the emirate and whether it is a mainland or freezone company, how long the licence is valid for and what the annual intervals are, at which the visa would need to be renewed.
“It is important for every customer to ask relevant questions such as how many visas are included in the package (visa quota) and how many activities on the license are included? Basically, set up providers need to make it clear that you cannot have a lifetime investor visa, if the license is not valid. If this is not clear, customers should ask,” she said.
“Sometimes you can get a promotional offer so it is important to find out what future costs would be on the maintenance of a licence. For example, in Year 1 you might be offered a competitive rate due to an ongoing promotion or campaign from the free zone so, it’s important to know if the next year and future years’ renewal costs would be the same or different,” she added.
Consider your future expansion plans
Another cost factor to consider is the business activities that are permitted on the licence, as the types of business activities permitted on a licence are regulated by economic departments in each emirate. If you decide to change or modify your business model or offering in some way, you would need to ensure that the new business activities are permitted under the licence you have applied for, Gheewala said.
“Additionally, certain business activities require third party and municipality approval so, of course, these would be additional expenses,” she added.
For example, if you are applying for a sole proprietorship licence or professional licence, most of the business activities permitted on the licence are suitable for those with an expertise in the service sector. The business activities included on the licence include options including, but not limited to, advertising, entertainment, education and law. If you wish to expand your business to trading, however, you would need to apply for a separate trader’s licence, according to Ummer. This is why it is important to ask the right questions, before signing up with a consultant to setup your business.
“Like in all things consumer related, it is important to read the fine print and ensure that you’re partnering with a corporate service provider that is as transparent as possible. I’d like to stress additionally the importance of seeking advice from a company that has been in the region and industry for many years to have really gathered that experience and knowledge that is required to be able to provide unbiased and holistic counsel,” Gheewala said.
What is the typical duration of residence visas?
Visas are issued by the relevant authorities in the UAE, depending on your status. If you are under a family visa, you would be sponsored by your parent or spouse. For employees, they may have their employer provide an employment visa. Also, business owners in the UAE get an investor visa, when they complete the trade licence registration and subsequent renewal.
Residence visas are typically issued for two or three years, depending on the jurisdiction – mainland companies offer a two year visa, while in free zone companies, visas need to be renewed every three years. In rare cases, visas are offered for five or ten years. However, that is dependent on the sole discretion of the relevant UAE authority, and is granted in exceptional circumstances.