In the business of empowering business
The UAE’s economy is hitting a sweet spot, being turbo-charged by the country’s leaders in order to make it future-ready and future-proof. Not a week passes by without the government announcing a bevy of measures to accelerate growth. The Cabinet on Wednesday gave the economy a massive shot in the arm by unveiling sweeping reforms in visa regulations for workers as well as for jobseekers and transit passengers.
In one fell swoop, the Cabinet installed forward-looking policies, doing away with the dated requirement of bank guarantees and replacing them with an innovative insurance system at a fraction of the earlier cost. This single measure will release no less than Dh14 billion in cash flow for local businesses, giving them a generous cushion of capital.
The shelving of the need for individuals to exit the country to change their visa status, and the introduction of a 180-day jobseeker visa are the other gamechanging reforms that come close on the heels of the massive economic stimuli announced by Abu Dhabi and Dubai, slashing the cost of doing business and the cost of living for residents.
The UAE has always been a business- and resident-friendly destination. With an eye on Expo 2020, the UAE is unveiling measures that herald a paradigm shift in the way business is conducted in the country, offering incentives to gifted students, exceptional experts and seasoned professionals. Welcome to the era of academic excellence, the age of scientific superiority, a haven for meritocracy. Welcome to the UAE.
dubai — The UAE Cabinet’s decision to scrap a mandatory bank guarantee for employment visas was hailed by businessmen and corporate leaders as a surprise Eid bonanza that will lead to a Dh14 billion liquidity infusion, providing a major stimuluss to a cashstrapped market.
MA Yusuff Ali, chairman of Lulu Group International & director board member of Abu Dhabi Chamber, said the decision will surely further boost various industries, especially Small and Medium Enterprises (SMEs), in the country.
“Elimination of bank guarantee will surely ease recruitment process, helping various organisations to bring in human resources from diverse nationalities. Not to forget the mandatory insurance at nominal fee of Dh60 will definitely add value to staff welfare. The various recent initiatives such as 100 per cent investment, long term visa for professionals, various economic stimulus packages and the current new visa regulations are surely going to make UAE the investment and economic hub of the region,” Ali said.
Paras Shahdadpuri, chairman of Nikai Group of Companies, said the decision to abolish bank guarantee is vital for all businesses, particularly for those with large number of employees. “The other steps — giving six months free period to employees after expiry of their employment contract to provide them time to seek employment — would also help better movement of human resources without incurring costs on their return air tickets,” said Shahdadpuri.
Ram Buxani, chairman of ITL Cosmos Group, described the new measures as pragmatic as bank guarantees helped neither the government nor the employer, but only helped to boost liquidity of banks. “It was a strain on the cash flow of employer. But with the new system of insurance, costing a fraction of earlier amount, the job market would improve.” Buxani said the government should look into issuing provisional employment visa at competitive rate to cover the probation period of six months and firm it into a two-year visa after the probation period is over and the employer confirms the services of an employee. At present, terminating services during probation period becomes very expensive.
Low-cost carrier flydubai welcomed the new transit visa rule. “Flydubai supports the government’s commitment to removing barriers of travel, creating free flows of trade and tourism and enhancing Dubai’s development.” Raju Menon, chairman and group managing partner, Morison Menon Chartered Accountants, said the Dh14 billion bank guarantee to be ploughed back into business would act as an impetus for further expansion of entities while boosting liquidity in the market.
Adeeb Ahamed, managing director, LuLu Financial Group & Twenty14 Holdings, said he hoped the new measures would have an immediate effect on businesses and the general economy of the country. Y. Sudhir Kumar Shetty, president, UAE Exchange, said replacing of the mandatory deposit by a new insurance scheme would have far-reaching positive impact in the labour market. “Making the jobseekers’ process easier by granting six months temporary visa would make recruitment easier for companies in the UAE,” said Shetty. Lalu Samuel, chairman of Kingston Holdings, said the easing of visa rules for jobseekers, tourists and students would encourage people to come, stay longer and spend more. “The government’s move will give more confidence to invest in the UAE at a time when investors are looking at options and new locations,” said Samuel. Kamal Vachani, group director, Al Maya Group, said the new system of replacing the bank guarantee requirement for the employees would have a positive impact on businesses across all sectors. “Allowing 48 hours visa to transit passengers will allow visitors to enter Dubai easily. Providing six-month temporary visa without fees for jobseekers is yet another bold step to boost the overall economy,” said Vachani.
Dony Cyril, director of Dome Exhibitions, said the reforms are historic and reduce the cost of doing business. “The Dh14 billion bank guarantee fund will help the private sector utilise it for operations and growth. The new visa rules will help the exhibition, conference business and tourist flow during events like Expo 2020.”
Osama Al Rahma, CEO of Al Fardan Exchange and chairman of Foreign Exchange and Remittance Group, said the new visa and job regulations would enhance level of confidence in the whole economy. “This will show that there is a lot of engagement from the government to ensure that better facilities are in place to make people grow their businesses, especially with the refund scheme that will inject more than Dh14 billion into the economy and companies with high number of employees will greatly benefit from this liquidity,” said Al Rahma. Atif Rahman, partner and director of Danube Properties, said: “It will also help real estate sector a great deal as foreign investors will no longer worry about their visa, stay and the fees — all are being made flexible. We expect a solid flow of investment from foreign countries as the new announcement will boost investor confidence.”
issacjohn@khaleejtimes.com