Stock Dubai skyline
UAE citizenship or tax residency options to invest and how much you need to start saving. Picture of Dubai skyline used for illustrative purposes. Image Credit: Antonin Kelian Kallouche/Gulf News

Dubai: A series of recent reforms in the UAE makes it ideal for you to potentially invest and possibly retire in the country.

However, this also involves knowing all the options that are made available to you in order for you to attain a citizen’s status, while thinking of spending your retirement years in the emirates.

If you’re interested in relocating to Dubai, Abu Dhabi, Ajman or any of the seven emirates, you may have already started thinking about the financial prospects. With recent positive changes to retirement visas, there are more reasons than ever to make the move and invest your money in your retirement.

With business incentives, licensing platforms for freelancers, small businesses, the UAE now presents people from across the globe with various cost-effective ways of starting a business, or investing in the country.

The UAE government has developed funding platforms as well as access to infrastructure needed for specialists to obtain residency while working remotely, or businesses to trade locally or internationally while being based in the UAE.

What are my options?

Investment options include freelance licensing for as low as Dh580, e-trader online license for as low as Dh1,200, 100 per cent foreign ownership for Department of Economic Development (DED) entities - versus previous requirements of 51 per cent local ownership when based outside of a free zone.

Among others are, remote work residency visa for entrepreneurs, the Golden five or 10 years visas for entrepreneurs, remote business setup and notary services, which are only a very few projects and products UAE government has on offer to local and international investors.

Moreover, latest civil law changes as well as a range of changes to social and lifestyle reforms, offer security and safety of one’s residency, as well as savings and assets. These changes are the latest in a series of reforms that have been accelerated in the UAE since the COVID-19 pandemic.

Can I retire in Dubai with a tax residency?

If Dubai is more to your taste for retirement or a holiday home, you'll be pleased to learn it's not excessively expensive to qualify for residency there. The emirate offers visas to foreign nationals who invest a minimum of $272,000 (nearly Dh1 million) in property.

The UAE does not grant permanent residency to expatriates but only multi-entry residency visas.

For real estate investments lesser than Dh1 million, you are granted a six-month multi-entry residency visa. It is much like having a tourist visa, but with the ability to make multiple entries over a six month period.

Three-year property investor visa is granted for those that invest Dh1 million and more, and for those who invest in property worth over Dh5 million are eligible for a five-year residency visa.

Apart from that there are also three- and five-year multiple entry Dubai property visa that comes at a higher investment cost.

Golden visa is available to those who provide a minimum investment of Dh10 million, but only 40 per cent of that can be in real estate.

How else can I invest in UAE residency?

Residence by Investment (RBI) and Citizenship by Investment (CBI) is a market estimated at $21.7 billion (Dh79.7 billion) and growing by 23 per cent a year – and forecasted to reach $100 billion by 2023 (Dh367 billion).

You can either set up a company or purchase shares of an existing one, but you must own shares with a value of at least Dh50,000.

Once you have incorporated your company or purchased shares, the company may sponsor your business visa. This visa will be valid for up to 3 years, with unlimited renewability, as long as you still own capital shares of a company and you visit the country at least once every 180 days.

Once you have obtained the business visa, you can sponsor your relatives, who may apply for a 3-year visa, renewable. You must demonstrate family ties and get at least Dh4,000 per month.

As there is no permanent residence visa, this means that every three years you must renew the business visa. Moreover, this visa does not lead you to citizenship.

What has changed now?

Dual citizenship was up until now not an option in the UAE, and to become a citizen, you had to renounce your previous nationality.

The UAE announced in January 2021 that it intends to launch a citizenship by investment programme for selected investors.

The Golden Visa programme will allow foreign residents to establish dual citizenship if the specific requirements are met.

How much do I start saving?

If one intends to retire at the age of 65, and for easier calculation factoring the global average life expectancy currently averages at 80, saving at least for a minimum of 15 years post-retirement is vital.

So, the cost of living in UAE for about 15 years post-retirement can be estimated at between Dh1.5 million to Dh2 million. This cost should be factored in when retiring in the UAE.

Moreover, given that you need to at least have Dh1 million in savings when applying for a five-year retirement visa in the UAE, and re-apply for the visa every five years if you want to continue in the country, such an amount of savings should be maintained each time you re-apply for the visa.

What are the related costs?

According to data from Numbeo, a crowd-sourced global database, which aggregates statistical data pertaining to cost of living, rent, etc., monthly costs for a single person costs Dh3,500 without rent.

Rent averages between Dh2,500 to Dh7,000 a-month – varying considerably on the type of accommodation, multiple property platforms indicate. Then total expenses range between Dh6,000 to Dh8,000 a month, or about Dh85,000 for living a year in UAE.

In a new analysis by US-based online lender NetCredit, which crunched the numbers to find out what it would cost to retire comfortably in every single country around the world, and the analysis showed that if you're planning on retiring in UAE, you're going to need over $600,000 (Dh2 million) in the bank to do it comfortably.

How much it costs on average for people in different age groups?
Let’s say a 40-year-old earns the aforementioned median pay of Dh21,500 a month, with expenses estimating at about Dh8,000, so the net savings a person will average at is about Dh13,500.

If the person sets aside 85 per cent of those savings (Dh13,500) for retirement every month, which comes to Dh11,475, he or she by the end of retirement can save Dh3.4 million, by the age of 65 – which would more than suffice for him or her to live in the UAE for about 15 years, while reapplying for the visa every five years.

Similarly, for a 22-year old UAE-based millennial who on average earns a monthly salary of Dh12,243, like the survey cited initially, with zero savings currently and whose expenses are estimated at about Dh6,000 - the net savings of the person would be Dh6,243.

If the 22-year-old millennial were to set aside 85 per cent of the net savings (Dh6,243) every month, which amounts to Dh5,306 monthly, when retiring at age 65 he or she can have Dh2.7 million – which can suffice for him or her to live in the UAE for about 15 years, after factoring in total expenses of Dh85,000 per year and reapplying for the visa every five years.