Dubai's Retirement Visas could help stabilise expat population
The Dubai Government announced in early September that people who are over the age of 55 and meet the standard visa requirement will have the opportunity to apply for a five-year visa.
This requirement is an income of 20,000 UAE dirhams per month ($5,446) , 1 million UAE dirhams in savings or property investments worth 2 million UAE dirhams.
Thaddeus Best, Moody’s Analyst described the move as ‘credit positive’. “One of the longstanding constraints on the UAE’s credit profile is that you have this very unusual labour market structure where 90 percent of the residents are expats, who are here on visas that, for the vast majority, are tied to their employment, so you have quite a rigid labour market structure."
“The challenge is that [it] tends to exacerbate the economic cycle, because when you have a recession, people basically just leave, leading to slowdown in the growth of population or an outright contraction like we expect this year," he added.
“Any broad level steps the government takes to try and reduce that volatility in the population is credit positive.”
Best said there were many retirees from Western Europe and the USA who would be able to meet the criteria required for the retirement visa, as the property value of 2 million UAE dirhams is low in comparison to the five-year UAE property investment visa, announced last year, which is 5 million UAE dirhams.
The UAE is one of the few countries in the GCC that would be able to attract retirees from other parts of the world, he said, due to its tourism infrastructure and the quality of healthcare available, saying the other example could be Saudi Arabia for Muslim retirees wanting to be closer to Makkah.
Best said one of the benefits of having a longer-term visa is it offers opportunity for longer term financial planning, particularly investing in property, for example, as buying real estate requires a 20-25-year investment holding time.
Five-year retirement visas are not a significant departure, he added, due to the availability of the existing five-year investment visa.
Source: Zawya)
