A group of 73 foreigners have become the first to benefit from Saudi Arabia’s latest effort to open up its economy, after being granted ‘premium residency’ visas.
They are paying handsomely for the privilege. A permanent ‘green card’ (as they are sometimes called) costs a one-off fee of SR800,000 ($213,000), while the one-year, renewable version will set you back SR100,000. In return, the Saudi government is promising permit holders will find it easier to get business licenses, buy property and move between jobs. They will also be able to issue their own exit and entry visas and obtain visit visas for family members.
It is a bargain many appear keen to take. Premium Residency Center CEO Bandar Al-Ayed said his team has received thousands of applications since it launched its online portal in June.
The first cohort to be approved are a mix of people already living in the kingdom and others wanting to come from abroad. They comprise 19 nationalities and their jobs include investors, doctors and engineers.
As that brief profile suggests, Saudi Arabia is not trying to attract a particularly broad range of people with its new visas. It wants to entice foreigners with money and skills, both of which are desperately needed for Vision 2030, the economic reform strategy championed by Crown Prince Mohammed bin Salman.
Saudi Arabia is far from alone in this. Weak economic growth and a need to diversify away from oil and gas revenues means countries across the Gulf are clambering over one another to attract those with capital to invest and knowledge to pass on to locals.
Even Iran is doing what it can to make itself more appealing. It might not be at the top of many fleet-footed investors’ list of places to go these days, but the country’s economy, laid low by sanctions, needs foreign capital more than ever to keep things moving.
In late July, Iran’s Interior Ministry announced that anyone investing at least $250,000 could receive a five-year residency permit. Just as helpfully, a month earlier President Hassan Rouhani told border guards to stop marking visitors’ passports with entry and exit stamps – a trick also used by Israel to help its visitors avoid unwanted attention when crossing other frontiers.
Many Gulf countries have long offered outsiders sun-kissed, tax-free living in return for their toil, but foreigners were only welcome for as long as they had a job. These days, at a time of high political tensions, governments are having to work much harder to draw in entrepreneurs. Hence a rush to loosen visa rules, slash fees and generally appear more welcoming.
Since May, the UAE has been awarding ‘golden visas’ to investors and other sought-after individuals, offering them five and ten-year residency in return for investing at least AED5m ($1.4m) or AED10m respectively. Some 6,800 of the visas are due to be handed out in total. Locals note most of the early beneficiaries were already inside the country, so it looks like a reward for loyalty more than a way to bring in new faces, but that may change over time.
On 12 November, Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum said 2,500 scientists, researchers, innovators and investors had been granted long-term residency so far. “We welcome them among us,” he tweeted.
Qatar – which has had to cope with a trade boycott by Bahrain, Saudi Arabia, the UAE and Egypt since June 2017 – is competing in the same market. Immediately after the boycott was announced it began to offer visa-free entry to dozens more nationalities. It is now among the ten most open countries in the world, according to the UN World Tourism Organisation. In September last year, Qatar claimed to be the first GCC state to offer permanent residency to foreigners, although only 100 permits were to be offered a year. On 16 September this year, Emir Sheikh Tamim Bin Hamad Al-Thani issued a decree offering five-year residency permits for investors, although the announcement didn’t say how much they would need to commit.
The liberalizing trend is reaching into areas long closed-off to outsiders, like property ownership and the totemic oil and gas industry. Earlier this year, Qatar’s cabinet approved a plan to allow foreigners to own homes in the country. Bahrain – which along with Oman has the weakest economy among the Arab Gulf states – announced over the summer it would allow international companies to take full ownership of oil and gas drilling subsidiaries. Riyadh is inching towards the sale of a minority stake in the world’s most profitable company, oil giant Saudi Aramco. Other industries are also opening up. In July, the UAE announced it would allow 100% foreign ownership in 122 business activities.
Local firms are also benefitting from the race to be more pro-business. The UAE has launched several waves of fee-cutting over the past couple of years. In July, it cut or cancelled fees on 1,500 government services, including those for issuing work permits and amending employment contracts. The authorities said they acted after studying the fees charged in neighbouring countries. Others are responding in kind. On 5 August, Bahrain’s government cancelled fees on 200 services.
Some prominent locals are pushing for even more assistance, not least to offset investor nerves stemming from regional political tensions. In early August, prominent Dubai businessman Khalaf Al-Habtoor noted on Twitter that political conditions were leading to “investor fear in the UAE and Dubai.” Among his proposed solutions he said “it is very important to reconsider the abolition of a large number of fees and taxes.”
There is another side to this though. While the Gulf countries are keen to attract wealthy foreign business owners and those with in-demand skills, they are far more ambivalent – and sometimes downright hostile – to lowlier expat workers who toil on construction sites or in low-status service jobs. In the face of the hostile environment, millions are returning to their home countries, leaving behind jobs that locals are unenthusiastic about filling and which wealthy foreigners are just as likely to shun.