How the UAE's new expat retiree visa will impact construction
Construction contractors in the Middle East all face similar challenges, but the UAE’s expat retiree visa may solve some local industry problems in the long term
The construction sector has many problems to contend with, both globally and in the Middle East. In more mature markets such as the US and the UK, these hurdles include delays on large, often infrastructural schemes that struggle to secure adequate funding or timely approvals. And industry challenges are not too different in the Middle East.
Contractors agree that payment delays, variations, and poorly drafted contracts must be mitigated to ensure that they can afford the resources required for quality delivery, as experts at the Construction Week: Leaders in Construction Summit UAE 2018 agreed.
The onus to improve the situation lies mainly with real estate developers, who must ensure their projects can be constructed without delays in terms of time or payment, and that these assets will find takers upon completion.
However, it appears that change is on the way, and most notably so in the UAE, where a flurry of activity has taken place in the last few days. The UAE cabinet, chaired by Vice President and Prime Minister of the UAE, and Ruler of Dubai, HH Sheikh Mohammed bin Rashid Al Maktoum, last week approved a visa law to allow expatriates to retire in the country.
Dubai Media Office announced that the visa’s eligibility requirements would include having an investment in property worth $544,510 (AED2m); having financial savings worth no less than $272,255 (AED1m); or having an active income of no less than $5,445 (AED20,000) per month.
In the days since the announcement, industry experts have voiced their views on the potential impact of the visa. Mark Andrews, managing director of Laing O’Rourke Middle East, told Construction Week that the move was positive, but that it was unlikely to curb property oversupply in the country.
Nevertheless, local developers have had much to be excited about since the law’s announcement. Sudhakar Rao, chairman of Dubai-based Gemini Property Developers, said the rule was likely to “attract millions of dirhams into UAE properties”.
Indeed, the UAE’s new expat retiree visa’s long-term ramifications could well be significant for the construction industry. The requirement of asset ownership may promote greater activity in the real estate segment, which in turn could benefit contractors experienced in fast-track construction. This increased demand may also improve cash flow across the supply chain.
Perhaps equally important is the effect that the visa will have on talent management in the construction industry. Expats migrating to the UAE may no longer feel the need to have an ‘exit strategy’ in place, and might instead map out long-term careers in the Emirates.
While it may not be immediately evident, the country’s expat retiree visa certainly shows promise when it comes to solving the construction industry’s long-term problems.