The UAE Cabinet has approved key "strategic decisions" to spur local growth, including new rules on foreign workers' insurance in the private sector, and a legislative visa package.
HH Sheikh Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, chaired the cabinet.
The introduction of an insurance scheme for workers’ guarantees was announced as one the new measures. This move could save the private sector billions of dollars, according to the Dubai Media Office.
A former compulsory deposit of $816 (AED3,000) per worker has been replaced by an insurance scheme costing $16 (AED60) per worker per year – a reduction of 98%.
In a cabinet meeting today we approved reforms including replacing the bank guarantee system for private sector employees, with a low-cost insurance scheme. This will release AED 14 billion back to the private sector companies and will further lower the cost of doing business . pic.twitter.com/4BYNzldJ0S— HH Sheikh Mohammed (@HHShkMohd) June 13, 2018
This new plan aims to secure workers’ rights in the private sector, and minimise the cost burden on employers. It could also help to spur private-sector investment, by allowing companies to recover up to $3.8bn (AED14bn) – a figure that represents the current value of guarantees paid by employers.
The system is part of the UAE's ongoing efforts to make it easier to do business in the country and stimulate economic growth.
The $16 annual insurance policy per foreign worker covers workplace entitlements, such as end of service benefits, holiday time, overtime, unpaid wages, a worker's return ticket, and cases of workplace injury.
Other measures approved included a new six-month visa plan for job seekers who are overstaying in the country on an expired visa, but wish to continue working in the UAE.
Visas can also be adjusted or renewed without having to leave and re-enter the country, although a fee will be charged for this service.
The Cabinet also adopted an agreement between the UAE and Russia on the mutual exemption of visa requirements, paving the way for "new horizons for mutual tourism, investment, and trade", Dubai Media Office said.
It also agreed a convention to avoid double taxation, and the prevention of financial evasion in taxes on income and capital, with Saudi Arabia's government.