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Dubai is now becoming one of the global leaders in the real estate market and generating a higher return on investment (ROI) than any other famous city in the world
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Local sponsors register professional business events with Dubai Economy and Tourism (DET) as service agents. — file photo
With its world-class infrastructure, technological development, business investment and trade opportunities, Dubai is a hotbed for foreign investment. The breathtaking skyline, top-notch infrastructure, famous buildings and magnificent malls make Dubai an ideal destination for real estate investors.
Due to the above factors, Dubai is becoming one of the global leaders in the real estate market, generating a higher return on investment (ROI) than other famous cities in the world.
According to the August 2022 report, the real estate market recorded an average of AED1.4 billion in sales transactions in a single day.
The recent launch of the Golden Visa scheme for real estate investors and buyers who invest in or purchase properties worth AED 2 million has boosted the profile of Dubai real estate. The 10-year residence permit stimulates real estate investment, making Dubai an ideal choice for buyers more than any other metropolis.
The real estate industry in the UAE has undergone a sea change, with a focus on long-term investment options, a sign of Dubai’s unprecedented growth rate.
Build Your Real Estate Brokerage with 930 Ownership
Under UAE legislative reforms, expatriates or foreigners can set up a real estate agency with full ownership.
The rules, which come into force in 2021, remove real estate brokerage from a “restricted category” and allow more foreign brokerage firms to operate real estate in Dubai with 100% ownership.
Plus, the government has made the whole process more seamless. New businesses can apply for a license through the Department of Economy and Tourism (DET) and get approval from the Real Estate Regulatory Agency (RERA) through the Trakheesi system.
Managed by the Dubai Land Department (DLD), Trakheesi aims to simplify the real estate industry and its services such as permits, e-cards and approvals. It integrates with DET to collect centralized data. Recently, the government made it mandatory for brokerage companies to register and obtain a unique Trakheesi number.
Local sponsors register professional business events with Dubai Economy and Tourism (DET) as service agents.
They assist companies in filing documents with government authorities and municipalities, but are not involved in the operation or management of the business. Additionally, the local sponsor does not hold any equity in the business.
Anti-Money Laundering and CTF Regulations
The UAE has taken steps to prevent money laundering in real estate transactions. Regulators are strictly required by the government to strengthen control and supervision of the industry.
The fundamental law for anti-money laundering in the UAE is Decree No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations.
According to anti-money laundering regulations, real estate agents must identify suspicious transactions and comply with the following requirements in the UAE:
> understand Source of funds for transfer
> implement the necessary Client Due Diligence (CDD) based on screening, analysis and previous professional status.
> management necessary Measures such as internal governance, policy, and monitoring to ensure that ML risks are mitigated.
Real estate agencies must be registered with the financial intelligence unit – goAML service portal. It is an anti-money laundering reporting platform launched by the Central Bank of the UAE to limit money laundering (ML), terrorist financing (TF) and other illegal activities.
real estate brokerage activity
Under real estate brokerage, two types of business activities are involved:
Most brokerage firms can carry out both activities under one license. However, companies can engage in related real estate activities with additional approval from the authorities.
Form a real estate company
After deciding on a business name, you must submit the required business documents to complete the registration process through the online portal. Also, you must be certified by the Real Estate Regulatory Agency (RERA).
To become a real estate agent, you must obtain real estate agent certification training from RERA.
You earn certification by taking a four-day training course and passing a follow-up exam. The real estate agent employed by the company must have a broker card issued by RERA.
You must submit RERA approval, tenancy contract, passport copy and trade title certificate to obtain a final real estate license from the authorities. Once you have submitted all the required documents, the Department of Economy and Tourism (DET) will issue you a payment voucher. After payment, DET will issue the license.
Now you can register your real estate company with RERA using the following documents:
· Copy of DET business license
· RERA course certificate
· Copy of Lease Control/Ejari in the office
The governing body will then grant you a commercial license to start your business.
Like any other mainland company, to hire and sponsor employees, the company must be registered with the Ministry of Labor (MOL) and the Directorate of Residence and Foreigners Affairs (DNRD).
According to the Ministry of Economy and Tourism, you must rent an office space or a fully self-contained office in a business center anywhere in Dubai to obtain a real estate brokerage license.
Even if you set up your own real estate business, you can outsource parts of your business, such as accounting services, to reduce costs and run your business efficiently. The cost of obtaining a real estate brokerage license depends on factors such as your business activities, company size and location. In addition to this, you will need to pay for the certification.
The real estate market generates approximately 5.5% of the Gross Domestic Product (GDP) annually, making it one of the most lucrative business setup options. It is an excellent investment for those interested in making a profit in this industry.
Pratik Rawal is the Managing Partner of Ascent Partners, a firm that provides bespoke business setup and advisory services to entrepreneurs looking to establish their next business in Dubai. The views expressed are his own and do not reflect the policy of the newspaper.
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