Ras al-Khaimah, the northernmost emirate of the UAE, has now announced that it will allow expatriates to own land in certain designated areas. The hope is that the move will help open up the economy and encourage more foreign investment.
Sheikh Saud bin Saqr Al Qasimi, crown prince of Ras al-Khaimah, offered expatriates 100% freehold ownership if they set up a company inside the designated free zones in the emirate, Gulf News reported on January 22.
Expatriates would have to establish a company inside the Ras al-Khaimah Free Trade Zone and show their licence to real estate agents before they would be allowed to finalise any real estate deals. Foreigners that meet these criteria can then own one or more properties in areas predetermined by the government.
By dangling land ownership, which can be hard to come by in the Middle East, Ras al-Khaimah aims to attract more business to the north of the UAE, along with jumpstarting much needed investment in the emirate’s real estate, tourism and commercial sectors.
Ras al-Khaimah, the fourth-largest emirate after Abu Dhabi, Dubai and Sharjah, is located on the border of Musandum, the tip of the Arabian Peninsula owned by Oman. The emirate also controls a large area in the middle of the country near Sharjah and Fujairah.
It was the seventh and final emirate to join the UAE. Its rulers held out because they felt that their interests were not being weighted as highly as the larger emirates of Dubai and Abu Dhabi. When six emirates formed the UAE in 1971, Ras al-Khaimah’s leadership decided to delay membership, hoping that oil exploration in their territory would prove fruitful, enabling them to join the union as a more powerful oil-rich state.
Also part of Ras al-Khaimah’s grievance was the seizing by Iran in 1971 of two islands, Greater and Lesser Tunb.
When the oil proved not forthcoming and the UAE agreed to make common cause against the Iranian occupation, Ras al-Khaimah became part of the Emirates in 1972.
Individuality has always been a trait of Ras al-Khaimah. Recently though, it has had to contend with being less developed and less well known than Dubai and Abu Dhabi.
Fortunately for Ras al-Khaimah, property ownership may be an area where it may trump even its bigger and richer sisters. The emirate owns some of the best natural and unspoiled terrain in the UAE, making it an ideal location for tourism. Located where the Hajjar mountain range crashes into the sea, the scenery offers more than the flat desert of most of the rest of the country. To the north the mountains get taller and more spectacular, eventually giving way to a unique set of fjords.
The emirate should be able to use its already impressive landscape to bring in tourists and residents alike, eschewing the need for the expensive, flair-laden hotels that Dubai has become famous for, or the lavish resorts that Abu Dhabi plans to develop.
Ras al-Khaimah might also be able to capitalise on some of Dubai’s growing pains. As more people continue to flock to Dubai for business and leisure, the city is suffering from a lack of capacity – roads are clogged, hotels are always full and apartments are difficult to find. All of these problems have sent costs in Dubai through the roof.
In the past five years the working class has largely been priced out of Dubai, and they have been lured to the northern emirates by lower rents. But now even executives are deciding that the booming emirate is too expensive and are looking at Sharjah and even Ras al-Khaimah.
With the Emirates Road being extended to Ras al-Khaimah last summer, there is now a fast, direct route to Dubai, meaning that people can live up north and commute.
Tourists as well could be drawn to Ras al-Khaimah for a foil to Dubai, as it offers quieter beaches and a less-commercial atmosphere.
Getting the money to build the infrastructure will be a challenge though. Allowing foreigners to own land is a good first step, but Dubai and Abu Dhabi have already opened up their markets to foreign ownership of land – in 2002 and 2004 respectively – giving them a head start.
The other problem that scares away some potential property investors is that despite the proclamations from the individual emirates, there is no federal law that allows for foreign ownership of land.
In the constitution, land ownership laws are ascribed to each emirate, but UAE legislation would supersede any proclamations made on a local level. Until a definitive federal law is in place, the more wary investors are hesitant to join the real estate party even in Dubai and Abu Dhabi – let alone in Ras al-Khaimah.
At the same time, with all the seven emirates looking to attract real estate and tourism dirhams, it is unsure whether the pie will be big enough.
Dubai, for example, is planning on getting 15m tourists and 2m residents into the city by 2010. Yet if such targets are achieved, there will be a lot more people coming to the UAE overall who might potentially like a place that is a bit quieter and more naturally beautiful. If the emirates make efforts to complement their property and tourists markets across local boundaries, the whole country will benefit.
On the other hand, there is the danger that since Ras al-Khaimah might need to pry some residents, visitors and businesses from the other emirates – and marketing-savvy Dubai or oil-wealthy Abu Dhabi will not be easy competitors.
