Sunday, May 03, 2009

Two good moves

I seem to have been writing things which people find controversial and as that's raised their stress levels I'd better stop doing it for a while.



So this post is on a couple of things I've banged on about several times in the past and which have popped up in the news over the past couple of days, paying bills and property-linked visas.

I've been suggesting that the simplest, quickest way to get money flowing through the economy would be for the government-linked major companies to bring their payments up to date.

Extra funding for them from the $10 billion raised by the Dubai government would allow them to pay any outstanding invoices from their contractors and through them the money would go all the way down the food chain, boosting the economy in general.

On Friday the DG of the Department of Finance was quoted as saying: Dubai government-linked companies should settle all overdue payments within a month as they use funds from a $10 billion state support facility.

That really is excellent news because the amounts involved are obviously very large indeed - a lot of people are hurting because their employers aren't being paid.

Then this morning the promised UAE-wide property-linked visa has been announced.

Tidying up the confusion over the issue was essential, having a federal law is better than having different laws for each emirate. Various real estate people have welcomed the move, but I'm not so sure that what's been announced is entirely the best way to go.

There's also a lack of clarity and detail.

It will not actually be a residency visa but a six-month multiple-entry visa. At the end of six months the holder has to go on a visa run. It does not, of course, allow the holder to be employed in the UAE, that's still subject to the separate labour card system.

The property must be completed and fit accommodation for a family, wholly owned by the individual who must have a title deed, should be worth at least Dh1 million and the applicant must have a regular income of at least Dh10,000 a month whether inside or outside the UAE.

There's a lot to commend it but things I'm not so sure about include:
- it's not really a residency visa and I don't like the visa run aspect of it.
- the minimum value of Dh1 million, which could cut out, say, owners of studio apartments in International City or in the cheaper northern emirates.

WAM reports that the move: underlines the government commitment to serve interests of all persons who view the country as an oasis of stability and peace, therefore possessing properties in it. On that basis I'd have thought that it would be more appropriate for a normal residency visa and for it to apply to all property owners.

Missing detail includes:
- how and when the valuation is made, by whom and on what basis. The price you paid, the current value? If the latter, who is authorised to give the valuation?
- what's the requirement to prove regular income? What paperwork is required?
- no fees are mentioned.

Dubai firms to pay dues in one month.

Property owner visa.

8 comments:

Emjay said...
This comment has been removed by the author.
Emjay said...

More good moves..

Rents slashedBut...

No good deed goes unpunished?!?

Reality Check said...

Good point, Seabee re: the values of the property. Also, I agree it should be a blanket visa for all properties regardless of value. People buy according to their means. I see no diff. between a person who owns in IC and a person that owns in JBR or Emirates Hills.

A good move, but yet another poorly thought out process. (i.e. 10 year old car bans and ID cards)

Cat Russell said...

Hi Seabee. This visa news really leaves you with more questions than answers. Are we to assume that if you purchase a property via a mortgage you would not qualify for a visa until you had paid it in full (i.e. would not be wholly owned)? Also it would be fair to assume that there would of course be a fee payable, and this would have to be paid every 6 months. Then there is the hassle and expense of having to leave the country and renew it. Essentially you could never own a property and retire here.
For my money not exactly an incentive to invest, especially as mortgages are so hard to come by. I would rather invest in the UK, its a known entity, you are better protected as a buyer and the exchange rate right now is attractive.
Difficult to make a completely informed decision though because, as you say, the details are somewhat sketchy.

Seabee said...

Cat it seems to be always the way. We're told announcements on a subject will be made in due course, then after a considerable period of, presumably, thinking about them the announcement is made.

They usually confuse the issue rather than clearing it up, raise more questions than they answer, so the denials and backtracking begin, clarifications are issued, changes are made...

alexander... said...

SeaBee - for better or worse, Monsignor, you're a voice.

I for one appreciate having access to that voice. I may concur with your thoughts (frequent, admittedly) and I may disagree with you (less frequent, but an occurence).

But the voice is still one I will continue to treat with respect.

Sod people's stress levels. Post away!!!!

Cat Russell said...

Hi Seabee, I am sure you saw the paper this morning (gulf news) where they reported the fee is 2,000 dirhams per visa (per person I assume), for both initial applications and of course renewals. You will also need to purchase health insurance, and will need to leave the UAE for at least one month each time your 6 month visa expires.
I see on their website they are also running a little poll to see if this will encourage investment, so far 53% odd say NO.
Crazytown..
Article here in case you missed it http://www.gulfnews.com/articles/09/05/05/10310753.html

Seabee said...

Thanks Cat, I'm about to try to write something about the 'clarifications' - having read Gulf News and two other reports I still have a few questions...

Alex, thank you for the vote of confidence! I'd hate it if people agreed with me all the time - who was it who said something along the lines of 'if people agree with me I assume I must be wrong'. Sounds like Wilde - I'll google to jog my memory...