The H1-B visa upset is a golden opportunity for Gulf Arab states

The biggest battle in the world does not involve drones or satellites or any form of artillery. It is a battle for minds and talent. It is a battle whose outcome is shaped in boardrooms and government agencies, where relatively smaller players such as Singapore punch above their weight.

The US administration's surprise announcement last weekend that they would be charging $100,000 for the new H-1B visas rattled not only nerves around the world but also major US companies. Flights were grounded as passengers disembarked and videos flooded the internet of young IT professionals trying to return to the US in a panic.

The H-1B visa programme has been one of the pillars of the growth of the US technology industry. In 2024, the United States Citizenship and Immigration Services issued nearly 400,000 H-1B visas. However, only 141,207 of these were for new employment, with the remaining 258,196 being renewals of existing visas. According to sources 71 per cent of the beneficiaries were Indian citizens.

Although the US administration has since clarified that these new fee structures will only come into effect from February, it is likely that some startups will consider relocating to India. Within 48 hours of the US announcement British Prime Minister Keir Starmer announced that his country is exploring proposals to abolish some visa fees for top global talent. Thus, the Gulf states should act fast to attract some of these firms that will relocate to India.

According to various 2024 estimates, H-1B visa holders contribute roughly $86 billion annually to the American economy, $24 billion of which being through taxes, notwithstanding their payments to medicare and social security. Despite their economic impact, only 10 per cent of H-1B visa holders earn $200,000 annually, a figure that is perhaps too low for most mid-size to small companies to warrant a large capital investment.

A large number, 46 per cent in fact, are employed in what the US Department of Labour calls “professional, scientific, and technical services,” which is overwhelmingly filled with tech and tech-adjacent jobs. Some estimates put the number of IT industry jobs even higher at 65 per cent. Following the announcement, listed Indian IT firms lost upwards of 4.2 per cent as investors rushed to sell their shares.

Arab Gulf States should take advantage of the H-1B visa disruption in the US and attract these highly skilled people to contribute to their growing tech and AI sectors. Already in 2019 the UAE launched its golden visa scheme while Saudi Arabia introduced its premium residency programme as part of its Vision 2030. Bahrain and Qatar, and most recently, Oman also launched similar schemes.

To take advantage of the situation in the US the Arab Gulf States could expedite the process of issuing golden visas to talented IT specialists, reduce costs of setting up businesses and launch an IT investment fund.

In 2024 Abu Dhabi launched MGX, an investment firm focusing on artificial intelligence technologies. The private sector in the Gulf should also launch similar investment funds to create a critical mass. The UAE today is not content merely with being a regional player, as can be seen from its dominant roles in industries such as logistics and travel. It was the first country in the world to appoint in 2017 a Minister of State for Artificial Intelligence in Omar Al Olama, not to mention the launch of Dubai Internet City in 1999. Abu Dhabi’s launch of MBZUAI in 2019 is another example of moving swiftly and decisively.

It is likely that large and wealthy corporations will be able to absorb some of these costs. Startups, however, will certainly suffer the biggest losses. It is precisely this strata of companies that some may argue are amongst the most innovative that may be attracted to set up in the Gulf, where tech monopolies are not as entrenched as in the US, leaving more room for growth.

Although this is an extremely challenging task, the UAE has pulled it off before. When Emirates Airline was launched in 1985, Dubai Airport facilitated the travel of a few million travellers. Today it is the busiest international airport carrying nearly 92 million passengers annually. Not all these travellers fly on Emirates but the airline has allowed for an industry to not only be born but flourish.

Similarly, when Dubai announced the founding of the Dubai International Financial Centre in 2003 the financial industry accounted for $2.8billion of the emirate's gross domestic product. Today the finance and insurance industry in Dubai has grown to almost $40 billion.

The ad hoc nature of immigration-related legislation such as the H-1B visa announcement, and the June 2025 visa ban prior to that, hint at a possibility of continued restrictions and further uncertainty.

There is no doubt that US-based companies have already started preparing contingency plans in anticipation for further industry disrupting announcements. Such firms prefer stable environments that the UAE and GCC can offer. A place where they can set up with a great quality of life and long-term planning prospects. Arab Gulf States can harness their strengths and act fast to capture what author Taufiq Rahim suggested could be a "once in a century opportunity".