Golden visas and golden passports, which offer citizenship rather than residency in exchange for investment, are provided by countries worldwide. The OECD has identified more than 100 countries that offer some form of residency for investment.
Following the Covid-19 pandemic, countries have sought ways to increase foreign direct investment (FDI), given the global decline in cross-border investment volumes. Golden visas are seen as a tool to boost FDI, with entrepreneurs and business owners assumed to be more likely to set up companies in a country where they have a right to reside.
The UAE is expanding its own scheme. In 2021, it introduced golden passports for the first time, a major departure from previous policies that had made it very difficult for non-Emirati to become citizens. In September 2022, it will also expand the eligibility for golden visas.
The scheme is now open to investors, entrepreneurs, scientists, outstanding students and highly skilled professionals across all sectors. The salary thresholds have been reduced for applicants, and the restriction on the maximum duration of stay outside of the UAE to retain residency has been removed.
Abdulla Abdul Aziz Al Shamsi, acting director-general of Abu Dhabi Investment Office (ADIO), told Sterling Migration that the UAE’s golden visa programme is “opening a pathway for more businesses and entrepreneurs to pursue high-growth opportunities in a world-class innovation ecosystem”.
Al Shamsi says the new visa rules are “in line with Abu Dhabi’s diversification strategy to grow the private sector and attract foreign investment”.
Although golden visas have been a popular tool for investment promotion, there is debate about how effective they are at attracting FDI.
Research by Kristin Surak of the London School of Economics found that residence by investment schemes raised €3bn for EU countries in 2020, while the UK raised €2.2bn through golden visas that year.
Her research found that countries tend to start these programmes following economic declines or crises. In Latvia and Portugal the schemes have been responsible for 10% of FDI over time, and 7% in Greece, “yet, put into perspective, the numbers are less eye-catching”, Surak states in her published report.
“FDI is only a small proportion of the overall economy,” she says. “And, indeed, in none of the countries do programme revenues bring in more than 0.3% of GDP.”
In Ireland, where FDI represents 14% of GDP, golden visas account for just 0.32% of that total, according to Surak’s research.
The UAE achieved strong FDI volumes in recent years despite Covid-related disruptions, yet a boost in FDI numbers may not be its only objective for golden visas. The country is investing heavily in diversifying its economy as it seeks to reduce its economic reliance on hydrocarbons.
“This move complements many recent initiatives that contribute to making Abu Dhabi one of the best places in the world to do business,” says Al Shamsi. “From programmes such as the golden visa that improve access to talent and opportunities, to the recent reduction of business set-up costs and requirements, the emirate has set its sights on nurturing the best ideas and brightest minds.”
The UAE is working to make Dubai a hub for start-ups and venture capital while supporting emerging financial and technology markets such as blockchain and cryptocurrencies. Abu Dhabi, meanwhile, is investing heavily in sectors such as MedTech and AgTech.
To achieve this goal, attracting the right talent will be as important as attracting volumes of investment. For Denison, it is clear that setting up a company is not the only contribution his residency will bring to the UAE.
“It is important for us to contribute to the local economy,” says Denison. “Doug and I both have PhDs, so we are reaching out to the universities here to help with their summer internships programmes and give guest lectures. That is important to us and ADIO wants us to do that.”
The UAE increasingly sees Golden Visas as a vital tool for revolutionising its talent pool and diversifying its economy.