Saudis Offer Permanent Residency to Some Expats in Landmark Move

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Saudi Arabia approved a program that offers permanent residency for some foreigners, the latest sign of how the quest for non-oil revenue is prompting Gulf Arab countries to rethink the role of expats in their societies.

Under the law, which allows foreigners to own property, those eligible can apply for an indefinite stay or a one-year renewable residency, according to the official Saudi Press Agency. The government will detail the program’s rules within 90 days.

The announcement is a landmark move in a region where many expats are subject to some of the world’s most restrictive residency rules, including the need for a local sponsor and permission to leave the country. The United Arab Emirates approved a plan to allow wealthy foreigners to apply for a 10-year stay, while Qatar passed a law that would grant some permanent residencies.

The Saudi move’s biggest beneficiaries will be thousands of wealthy Arabs, some of whom resided in the kingdom for decades “without being able to as much as own the homes they live in,” said Mazen Al-Sudairi, head of research at Al Rajhi Capital.

Millions of expats have greased the wheels of Gulf economies for decades as nationals flocked to high-paying government jobs and enjoyed generous state benefits. Yet the idea of allowing them to lay roots has been sometimes viewed as a threat to national identities in debates that echo current anti-immigration rhetoric in the West.

Read: In One of World’s Richest Nations, Anti-Immigrant Tide Is Rising

There are more than 12 million foreigners in Saudi Arabia, according to official statistics -- over a third of the total population. Requirements for the residency include that the applicant have sufficient funds and pay a so-far unspecified fee, according to local media. The Saudi-owned Al Arabiya television said the permits will be for investors entrepreneurs, and skilled expatriates.

While Saudi Arabia is seeking to encourage the affluent to stay, monthly fees imposed on foreign workers and their families, along with sluggish economic growth, have prompted hundreds of thousands to leave the country. The levy is designed to encourage private businesses to hire Saudi nationals.

The idea for a long-term Saudi residency program was first floated in 2016 by Crown Prince Mohammed bin Salman as a part of his plan to reduce the economy’s reliance on oil. The scheme will attract investors and enhance the economy’s competitiveness, Minister of Commerce Majid Al Qasabi said.

Read: U.A.E. Long-Term Visas Bypass Most of Country’s Residents

The program would not abolish the sponsorship system, only exempting certain privileged foreigners from it. They’ll be allowed to invest and buy residential, commercial or industrial property, according to local media.

The system is a "step in the right direction" rather than a "permanent solution," said Nasser Saidi, president of Nasser Saidi & Associates and former chief economist at the Dubai International Financial Centre.

"If you really want to move forward and innovate, the whole sponsorship system needs to be abolished," he said. "Only then you’ll have a truly dynamic economy and people would want to invest in the country instead of sending their money back home."

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