The land is one of the most important aspects that has always been available to live beings on this planet. The term "real estate" encompasses land, buildings, and stabled structures that are used for a variety of purposes, including residential housing, commercial offices, trading spaces, theatres, hotels, retail outlets, and factories. The real estate industry is concerned with the acquisition and development of land to meet personal and commercial construction needs. Landlords, developers, builders, tenants, sellers, real estate agents, and others are key players in the entire process. The global real-estate sector's constant growth has provided leverage for other business sectors to enter and capture their respective markets.
The continued global growth of the real estate sector has provided leverage for other business sectors to enter and capture their respective markets.
The United Arab Emirates is one of the most popular tourist destinations in the world, and it is also home to millions of people from over 200 different countries. As a result, the area has a high demand for real estate and has proven to be a lucrative investment choice for international investors. This guide was written to assist investors and business professionals interested in investing in the UAE real estate sector by providing a comprehensive view of the industry from a regional perspective.
The Real Estate Market
Due to the region's abundant supply, the UAE's real estate market saw major changes in 2018, with a decrease in sales and rental prices. The year was considered as a buyer's market, as the number of buyers increased significantly. Emirates' government made a strategic move by incorporating new visa reforms and proposed rules. Expats living in the UAE who are 55 or older will be able to apply for a five-year retirement visa starting in 2019. Investors who make a Dh5 million property investment in the UAE will be awarded a five-year residency visa. The dramatic decision would have an impact on each emirate, resulting in a substantial increase in demand.
The government has taken the necessary steps in recent years to concentrate and diversify the real estate sector. Dubai, as the UAE's capital, has made a major contribution to coping with the necessary changes and, as a result, has focused heavily on all possible segments.
The government recently announced the introduction of a long-term residency permit known as the "Golden Card," which allows investors and outstanding employees in the fields of health, engineering, science, and art to stay in the country for an extended time. Almost 400 golden cards have been released so far in 2019, with a total of 6,800 expected by the end of the year.
When it comes to investing in the real estate business, business investors have full flexibility to invest in any of the available segments.
Office Market
Both aspiring entrepreneurs and seasoned professionals tend to execute their business plans on UAE soil. The demand for office, co-working, and customized office space has been steadily increasing, necessitating more office, co-working, and customized office space solutions. Investors tend to invest in the office real estate market because of the high demand.
Retail Market
The retail industry is one of the best-performing business sectors in the country, contributing significantly to the country's GDP. The demand for retail space has been steadily increasing, and it is expected to reach the next level in a few years. According to reports, eight new malls will open in the United Arab Emirates by the year 2020.
Hospitality Market
The expansion of the tourism industry has had a significant effect on the hospitality industry, which, like tourism, requires adequate land and space to carry out its operations. The hospitality industry in the United Arab Emirates has seen substantial growth in recent years, and it is expected to reach its next level by 2020 to meet the global visitor count of 25 million.
Residential Market
The number of visitors has been increasing, increasing the population of the UAE region. The population of Dubai has increased from approximately 8,60,000 in 2000 to 3.1 million in 2018, according to the Dubai Statistics Centre (DSC).
As the population grows, so does the residential market, which focuses on low sales prices to increase supply and strengthen the local currency. The average sales price in 2018 was AED 1.24 million, down about 8% from the previous year.
Office Market
The constant expansion of business establishments necessitates more office space, making it one of the most lucrative markets for real estate dealers and investors to meet the demand. The demand for office space in Dubai was low in the first quarter of 2019. As the World Expo 2020 approaches, every business sector is looking for new ways to expand, and there is a vast market to be captured. The average office rents and demands in Dubai are highlighted below by industry.
Industrial and Logistics Market
One of the most important business segments that contribute greatly to the economy's growth is the industries and logistics sector. The government has taken several steps to develop the warehousing and logistics industry to boost revenue.
PROCEDURE
The following procedures must be followed to incorporate a real estate company in the UAE:
1. Business Structure and Location
To a large extent, a company's success is determined by its location. The UAE offers investors a variety of business location options, allowing them to choose between Mainland, Free Zone, and Offshore locations based on the number of shareholders and available capital.
Following the completion of the business structure, which reflects the type of company that will be incorporated, the next step is to finalize the location. In the real estate industry, a business professional can choose from the following structures:
Sole Proprietorship
General Partnership
Partnership-en-Commendam
Joint Venture
Public Shareholding
Limited Liability Company
Professional Company
2. Trade Name
Once the business structure gets finalized, the next step is to register the trade name with the Department of Economic Development in the Emirates. It is to be kept in mind is to include “Real Estate” or “Broker” in the trade name, which will quickly speak about the business services that will be carried out during the business life-cycle of the business entity.
3. Business License
The next step is to acquire a business license for the business entity, which is a legal permit that allows the business entity to carry out its operations properly. It is a legal requirement in the United Arab Emirates for a business entity to obtain a business license to carry out its operations. The UAE Government and the Real Estate Regulatory Authority (RERA) in Dubai must both approve and authorize the real estate business.
4. Hire Back-Office Services
When it comes to maintaining a variety of operations such as back-office, real estate accounting, keeping track of company expenses and revenue generated, and so on, business entrepreneurs in the UAE tend to enlist the help of professional experts. The main reason for hiring professional services is to make better use of your time and devote as much time as possible to future planning and strategizing.
UAE’S FUTURE REAL ESTATE MARKET
According to forecasts, the real estate sector in each Emirate will experience significant growth. The forecasts for Abu Dhabi, the capital, and Dubai, the city of gold, which attracts the most tourists, are listed below.
Investing in the real estate industry is one of the best investments you can make. Business experts, on the other hand, are more interested in capturing the advantages that the ground offers for the money spent.
BENEFITS OF STARTING A REAL ESTATE BUSINESS
The following are some of the advantages of starting a real estate business in the United Arab Emirates:
1. Profitable Market
When it comes to the UAE, business incorporations and international ex-pat settlements have seen enormous growth. Investing in the real estate market appears to be a profitable venture because there is a high demand for all types of properties.
Every business sector, whether industrial, retail, or educational, requires land to carry out its operations. The government has taken several initiatives to boost the number of business sectors in the UAE, indicating that real estate will be in high demand in the future.
2. Tax-free Jurisdiction
The tax-free benefit that the UAE region offers is one of the driving factors that attract foreign investors to invest in the region. Individuals have full freedom to earn a lump sum without paying any taxes because the government has exempted them from paying income tax. However, the UAE government has been implementing VAT since 2018, which requires business professionals engaged in the supply chain process to pay a 5% consumption tax.
3. Complete Repatriation of Invested Capital and Profits
The UAE investment rules allow business investors to rest easy and worry less about repatriating their capital. No additional tax is due upon the company's closure or liquidation, and the owner may return the total capital and profits to his or her home country.
4. Ideal Investment Destination
For real estate experts, the United Arab Emirates is the ideal investment destination. The UAE Government has set specific rules for the incorporation of a company and the operation of related operations, which foreign investors must follow. Using business experts to assist with the incorporation process makes the process easier and more effective.
Comments