New Sharia-Compliant Pension For British Expatriates In Dubai
The federal government of the United Arab Emirates, has received a proposal from Dubai to create a sharia-compliant retirement savings scheme for overseas employees. This development will be something for all British expatriates in Dubai to watch for, as it affects their old age.
It is hoped the scheme will stretch over the entire country. However, if the federal government are not interested in involving themselves with the scheme, Dubai may have no other option but to implement the plan inside the emirate.
At the moment, companies in the UAE who have overseas employees, pay them end-of-service sums when they leave their positions. But under the proposed scheme, which companies are not obligated to enforce, employers will be paying money into a central system. This money is set aside by the employer for the employees future retirement, and Islamic principles would be applied in the management of these funds.
British expatriates in Dubai must negotiate confusing pension waters to look after their own retirement years
Through this scheme, overseas employees should get a sense of security, while benefiting from the fact that their fund will be managed with economies of scale. There is nothing indicating when the scheme will be launched, but it has been suggested by an unnamed source that the scheme has been given the green light.
There are 2.2 million people in Dubai at the moment, and the number of people in the UAE has been recorded as 9 million. Surprisingly, out of the 9 million, 80% are expatriates. There is one reason for this, and it is because the country relies on expatriates in a big way. Most of whom are required in the oil, service and construction sectors. One of the many reasons there are so many British expatriates in Dubai, and many would have one eye on their retirement savings.
Dubai have been working on becoming the leader for Islamic financial services, and earlier this year they launched a drive to realise this very ambition. However, should this scheme be accepted, it will be only serve to boost to its sharia-compliant funds industry.