A guide to retirement in the UAE

The UAE, traditionally known for its magnetism as a business and career destination, is now witnessing a growing trend of expatriates choosing to stay in the country beyond their working life and into retirement. This has always presented a challenge since residency in the country has traditionally been contingent on having employment in the country. However, thanks to evolving visa policies and the introduction of long-term visa options, retirees now have more opportunities to make the UAE their permanent home. Additionally, changes to foreign ownership laws, allowing expatriates to have 100% ownership of their businesses in most business sectors is providing retirees with another means of securing an income and financial security into their retirement years.

This article looks at the options expats have for retirement in the UAE and some of the main things to consider before making the decision to retire in the country.

What are the main considerations when retiring in the UAE?

If you’re considering retirement in Dubai, there are a few key areas to address in order to ensure a smooth transition. These include securing the appropriate visa or residency status, financial planning to cover living expenses and healthcare, selecting suitable housing and obtaining legal and financial advice to ensure proper estate planning and long-term goal setting.

Residency options

Over the last few years, residency policies in the UAE have undergone a complete overhaul. The introduction of programmes such as the golden visa, retirement visa and investor visa have opened up avenues for investors, entrepreneurs, skilled professionals, and retirees to stay in the country indefinitely and begin reevaluating their retirement options.

Golden visa / retirement visa

The UAE Golden Visa, initially designed to attract investors, entrepreneurs, and skilled professionals, has also introduced a retirement option.

Introduced in 2018, it allows individuals to stay in the UAE as long as they meet certain criteria. Firstly, in order to apply, you must be 55 years of age or above and be able to demonstrate sufficient financial stability by one of the following means:

• Stable monthly income: Those earning a monthly income of AED 15,000 or more (equivalent to AED 180,000 annually) qualify. This income can originate from pensions, investment plans, annuities, or rental property earnings.
• Savings: Holding savings of up to AED 1 million satisfies the savings requirement for the retirement visa.
• Property investment or ownership: Qualification is also possible by having a minimum of AED 1 million in property investments or ownership in Dubai. The property may be mortgaged, as long as the retiree maintains AED 1 million in equity.
• Combination of income and savings: In cases where income or savings alone do not meet the criteria, a combination of the two is acceptable. To qualify, the combined income and savings should total at least AED 1 million.

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Investor visa

The UAE Investor Visa doesn’t typically provide a direct retirement option, but it can indirectly enable retirees to live in the country if they meet certain conditions. It can be obtained under four different categories: investment in residential property, investment in a company, long-term residence or retirement:

• Investment in residential property: This is open to individuals who have invested in a residential property with a value of at least AED 1 million, with no more than 50% of the property value under mortgage. It must be a single, freehold property and is not obtainable with an off-plan property.
• Company investment: Many investors choose to establish a business in the UAE as their qualifying investment. This could be a company in a free zone or on the mainland. It can be through owning shares in an existing company worth at least AED 72,000 or by establishing a new company with a capital investment of the same amount.
• Long-term residence: This avenue provides eligibility for either 5-year or 10-year residency which can be renewed provided the criteria continue to be met. You’ll need to be able to prove investment in the country of at least AED 10 million, through either a local investment fund, company establishment, partnership in an existing company or a combination of all three. The 5-year option is open to investors in a property of at least AED 5 million or entrepreneurs with shares in an existing business that has a minimum capital of AED 500,000.

Healthcare

Health insurance is mandatory for all residents in the UAE, including retirees. Expatriates often rely on private health insurance plans provided by their employers. However, once retired, you may need to purchase private health insurance independently. It’s crucial to choose a comprehensive policy that covers your medical needs, including doctor visits, hospitalisation, and medication.

The cost of health insurance in the UAE can vary significantly based on several factors, including your age, the level of coverage you require, and the insurance provider. Basic plans, often referred to as Essential Benefits Plans (EBPs), are relatively affordable, at around AED 600 to AED 1,500 per year. However, they come with significant limitations. These include restricted coverage for certain medical services, higher out-of-pocket expenses, limited choice of hospitals and clinics, and potentially longer waiting times for non-urgent treatments. While these plans provide essential coverage, most people will find them insufficient and will want to consider higher-tier plans with greater coverage.

If you want more extensive coverage, such as access to private hospitals and specialised treatments, a comprehensive health insurance plan is a better option. These plans can range from AED 2,000 to AED 6,000 or more per year for individuals, depending on the coverage scope, age, and insurer. You may also want to consider a family health insurance plan if you have multiple family members with you in the country. These range in price from AED 4,000 to AED 20,000 or higher per year.

Legal and financial planning

Legal and financial planning is another critical step to securing a comfortable and worry-free retirement. You should first assess your existing pension funds, investments, and savings to ensure that you can sustain a stable income throughout retirement. Consulting with financial advisors is a good idea since they have a thorough understanding of the UAE’s tax laws and can help you work on strategies to optimise these assets and minimise any cross-border tax complications. Additionally, it’s essential to have a well-thought-out legacy plan, including a will, to ensure that your assets are distributed according to your wishes and to minimise any potential inheritance disputes.

Offshore structures can assist you in this regard. Entities such as trusts and foundations are valuable tools for estate planning and can help you minimise your tax liabilities while providing a layer of asset protection and financial privacy.

How can The Knightsbridge Group help? 

The Knightsbridge Group has over 20 years of experience in the domain of corporate structuring and wealth management. We have unparalleled knowledge of business practices and legal requirements in the UAE as well as an international network of contacts and a deep understanding of the needs of modern-day high net worth clients and international businesses.

We can assist you with your retirement planning in the UAE. We can conduct a comprehensive financial assessment to evaluate your current financial position, including income, expenses, assets, and liabilities. We can then design investment strategies that align with your retirement goals and risk tolerance, providing guidance on tax-efficient investments and structures to minimise tax liabilities. We can also help you create a comprehensive legacy and estate plan, including drafting wills, establishing trusts, and ensuring a smooth transition of assets to your beneficiaries.

If you need help with this or any other immigration, financial or corporate structuring issue, please don’t hesitate to contact us on info@kbgroup.ae and we will be happy to help.