Gulf Arab states are racing to attract high net worth individuals and skilled professionals willing to consider the region as a destination for living, working, and investing. New policy announcements – including golden visas, long-term residency schemes, and pathways to citizenship – highlight the lengths to which regional governments are willing to go to boost this demographic.
Yet regional governments are balancing efforts to attract high net worth individuals and skilled expatriates against the need to ensure the economic welfare of their citizenry. A windfall of government revenue from energy exports and robust growth makes this balancing act significantly easier. Cumulative crude oil exports by Gulf Cooperation Council countries are likely to exceed $500 billion in 2022, with Saudi Arabia’s crude oil export revenue alone estimated to reach $287 billion. This has enabled Saudi Arabia to post a $15.3 billion budget surplus in the first quarter of 2022 and achieve 11.8% growth in gross domestic product for the second quarter, compared to the same period in 2021.
Harnessing Foreign Power
The United Arab Emirates has accelerated efforts to attract global wealth and talent in recent months. On April 18, the UAE Cabinet approved an overhaul of the country’s entry and residence system, adding several new visa options and introducing other initiatives intended to position the UAE as a hub for wealthy expatriates and skilled professionals. The changes include the ability for visitors to stay for 60 days (up from the previous 30 days), discontinuing certain local sponsorship regulations, and expanding the golden visa program. The new system significantly expands benefits and eligibility for family members of visa holders in the UAE and is expected to come into effect in September.
The UAE also announced in June an unemployment insurance scheme to be implemented in 2023 that is designed to protect both expatriate and Emirati workers and enhance financial security. In 2021, the UAE government announced that certain foreigners with specialized skillsets and expertise would be eligible for Emirati nationality through a select nomination process.
The concerted effort to attract global wealth and talent appears to be working. Despite a small population of around 10 million residents, including expatriates and citizens, the UAE is set to attract 4,000 millionaires in 2022 and ranks first on the list of countries with the highest projected net inflow of high net worth individuals, according to the Henley Private Wealth Migration Dashboard. More hedge fund and property managers as well as crypto firms are relocating to the emirate of Dubai, bringing new wealth and financial assets into the country. The UAE’s modern infrastructure, low taxes, and light regulation offer additional incentives for inbound foreigners.
Other GCC states have rolled out similar visa- and residency-related initiatives to those in the UAE, in the hopes of replicating results. In February, Bahrain introduced a Golden Residency Visa with the possibility of indefinite renewal. Individuals who have resided in Bahrain for five years and earn at least $5,306 per month, as well as retirees and specialized professionals meeting specific criteria, can qualify for the new visa program.
In September 2021, Oman’s Ministry of Commerce, Industry and Investment Promotion launched the Investor Residency Programme to offer foreign investors and retirees long-term residence rights in the country. Omani officials signaled that the second phase of the program will extend long-term residence to innovators, creators, programmers, and entrepreneurs. Technology-oriented skillsets are in especially high demand across the region.
Rapid expatriate population growth is likewise central to multiple economic development plans under Saudi Vision 2030. The Saudi crown prince, Mohammed bin Salman, wants to transform the capital Riyadh into a greener, cooler city with twice the current population. Expatriates will constitute the bulk of this population growth, potentially turning Riyadh into a more cosmopolitan urban center. Mohammed bin Salman also expects 9 million people to live in Neom, a futuristic special economic zone and megaproject in the country’s northwest, by 2045.
Expatriate-oriented population growth in Riyadh and Neom is part of a broader development strategy for the entire country. The crown prince wants 100 million people living in Saudi Arabia by 2040, with foreign residents outnumbering national citizens. If all goes according to plan, expatriates should start outnumbering Saudis after 2030. In November 2021, Saudi Arabia also approved the granting of citizenship to foreigners with specialized skills, offering additional incentives for select individuals willing to align their professional careers with the country’s economic trajectory.
Citizens Shall Not Be Forgotten
Announcements by Gulf governments to attract and retain expatriates have coincided with efforts to improve the economic welfare of citizens. Following the UAE entry and residency system overhaul in April, the country’s Cabinet adopted a new system to increase the number of Emiratis working in the private sector. The UAE government hopes to boost Emiratization in the private sector to 10% by 2026, up from the 2% quota currently in effect for high-skilled jobs in firms with more than 50 employees. Private sector firms that support Emirati employment will receive financial benefits, according to Mohammed bin Rashid al-Maktoum, Dubai’s ruler.
Alongside new Emiratization policies, the UAE government is strengthening social safety nets for citizens. The country’s Cabinet approved a $3.13 billion outlay for a new housing policy benefitting 13,000 Emirati families. The new UAE president, Mohammed bin Zayed al-Nahyan, also restructured the social welfare program for low-income citizens, raising the annual allocation from $735 million to $1.36 billion. Moreover, a June presidential decree granted the same health and education benefits available for citizens to children with Emirati mothers and foreign fathers.
Workforce nationalization policies continue to emerge across the region. In July, Oman banned expatriates from being employed in more than 200 job roles in the country. The Saudi Ministry of Human Resources and Social Development began implementing the Saudization of marketing and administrative support jobs in April, while the ministry initiated similar Saudization processes of secretary, translator, storekeeper, and data entry operator roles in May. Semiskilled expatriate professionals, who hold roles that national citizens are willing and able to perform, appear most at risk of losing their jobs to locals.
Countries that have long managed majority-expatriate populations, such as Qatar and the UAE, are unlikely to experience transformative demographic changes with major socioeconomic implications for citizens because of these new policies. Saudi Arabia’s envisioned growth trajectory, however, entails a transformative shift in the country’s population from predominantly Saudi citizens to an expatriate majority. The financially weaker states of Oman and Bahrain have likewise dealt with labor-related protests and socioeconomic grievances among their citizenry, heightening the risks associated with granting generous incentives to expatriates. High energy prices can help regional governments keep a lid on any simmering discontent over expatriate-oriented growth plans for now, but energy markets are prone to change.
