The UAE Cabinet announced a number of changes to the existing visa and immigration requirements for non GCC nationals on 13 June 2018. These include the abolishment of the mandatory bank guarantee for workers, a new extended visa for job-seekers, a new visa for transiting passengers and new procedures for those who have overstayed their visa or entered the country illegally.

The objectives of these changes are to free up capital for employers, encourage unemployed workers to remain in the UAE whilst seeking employment and allow for easier amendments and renewals of visas. Whilst some of the details are still pending, we have set out below an overview of our current understanding of the expected changes below. It has been reported that the changes could be introduced as early as October 2018, across all emirates and free zones in the UAE. .

Abolishment of mandatory bank guarantee

Currently there is a requirement for a deposit of AED3,000 per worker, which is retained to cover the repatriation and end of service gratuity payments for workers upon termination of their employment, should their employer not be able to fund these costs.

In practice, the AED3,000 is often insufficient to cover the amount of end of service gratuity due on termination, in which case employees would not be fully protected in any event. Further, this can result in a significant amount of capital being locked up in the deposit scheme (without accruing interest). For employers with large workforces, this could be a relatively sizable sum, which could be more usefully deployed elsewhere in their business.

The reforms will replace the deposit scheme with an insurance scheme covering repatriation costs, end of service gratuity, unpaid wages, overtime payments, accrued holiday allowance and workplace injuries. The cost of this equates to around AED60 per employee, per year. This will offer comprehensive protection for employees as well as releasing the funds tied up in the current deposits back to employers.

New six month visa for job seekers

Currently, an employee’s visa must be cancelled within 30 days of the date of termination of their employment. The terminated employee must then find alternative employment or leave the UAE within 30 days of the visa cancellation date. This gives only a relatively short period of time to find alternative employment, which often forces individuals to return to their home country.

Under the new regulations, job-seekers will have a six-month period in which to find alternative employment. This will assist the existing workforce to remain in the country upon termination, and should encourage the retention of talent in the UAE market.

Free visas for transiting passengers

A new, free, visa for passengers transiting through the UAE for up to 48 hours has been introduced. There will be a fast track system upon arrival for transiting visitors to obtain this visa. The visa can be extended to 96 hours for a fee of just AED50.

New visa procedures for dependents, overstaying and illegal entry

There are a number of new procedures to cover existing immigration issues, including:

  • Two year visa for dependents of residents upon completion of the dependent’s university degree (it would appear this may be conditional upon the degree being obtained in the UAE, but clarification on this will be required);
  • Those who have overstayed their visa can leave the country without a “No Entry” stamp and existing fines are to be reviewed – to help encourage departing expats to return;
  • Those who have entered the UAE illegally can leave the country, with a “No Entry” stamp valid for two years only and existing fines are to be reviewed; and
  • Visa adjustments and renewals will be available for a fee, without a requirement to leave and re-enter the country.

Empowering “People of Determination”

The Cabinet also adopted a resolution on the empowerment of “People of Determination”. The resolution seeks to provide support and access to the job market and to obtain equal employment opportunities. This is in line with the various social development programs the Government has been pursuing.

This is the first move towards an equal opportunities framework in the UAE labour market, and it will be interesting to see how this develops.