Last month the United Arab Emirates announced it would ease restrictions on foreign business ownership and residency rights in a move to increase investment and attract fresh talent.
The changes — expected to be implemented by the end of the year — will allow full foreign control of businesses outside of economic free zones and long-term residency visas of up to 10 years for skilled professionals and students.
The big beneficiary of the reforms are global investors. Under the new rules, non-Emiratis can control 100% of the company anywhere in the country, without needing to find a local partner or a free zone.
Foreign direct investment in the UAE has remained stagnant for several years. Despite it leading within the Gulf, foreign investment in the UAE has dropped from a peak of $14.2 billion in 2007 to $8.9 billion in 2016, according to data from the World Bank.
“(The new policy) reduces the cost of doing business in and out of the UAE,” says Khaldoon Tabaza, the founder of iMena, a UAE investment company specializing in the consumer internet industry, thus making it easier to establish startups and entrepreneurial businesses.
Ray Dargham, CEO and founder of Step Group, a digital media company that runs tech and startup conferences, agrees that the changes will benefit fast-growing startups with limited funds.
Longer student visas will also help. “Startups will be able to hire more fresh grads for internships or jobs without worrying about their visas,” Dargham adds.
But the long-term benefit will be for the Dubai economy. “Companies will have a wider and cheaper talent pool to choose from and more expats will reinject their income into the UAE economy, instead of investing it back home,” Dargham says.