While it is important to note the charges, fees and taxes that are subject to the sale and purchase of real estate in Dubai, which I have all laid out and mentioned before, it is also essential to know the emirate on a deeper level—having enough information about Dubai’s economy as well as its data and figures that make it stand out among other cities.
On Covid-19 and Expo 2020 Dubai
The pandemic has indeed catapulted the world into a complete overhaul, with various cities grappling to adapt to the effects that came in its wake. However, Dubai is among the first and few to have successfully reflected its dexterity to be flexible amidst tough challenges. It has, for one, set the highest benchmarks in terms of efficient preventive measures against the disease—helping sectors and businesses survive the economic effects of COVID-19. This has made the emirate one of the most attractive cities for foreign investors and businesses.
Billionaires flocked Dubai during the pandemic, and their numbers increased especially with the opening of Expo 2020 Dubai. One of the visible results of this was the property market thriving now more than ever. In fact, just recently, the real estate transactions valued at AED 7 billion ($1.9 billion) in total, according to the Dubai Land Department!
Another thing that made Dubai garner further international attention is the Dubai International Airport, which was recently recognized once again as the world’s busiest airport for international passengers!
Dubai held on to the top spot with 3.54 million seats, about one million more than the next busiest airport, London Heathrow. This is according to the monthly World's Busiest Airports report of OAG, a global travel data provider with headquarters in the UK based in the UK.
The emirate's airport operator raised its forecast for annual passenger traffic for 2021 by two million, anticipating that traveler numbers will reach 28.7 million. For 2022, Dubai Airports is projecting to record 57 million passengers!
The UAE recently announced the introduction of a federal corporate tax in the country, which will be enforced in 2023.
Of course, this new tax regime—which will also be implemented in Dubai—shall be based on international best practices and will have low or even minimal compliance burden on companies, maintaining the UAE’s position as the best hub for investors and businesses.
The Newly Introduced UAE Corporate Tax: What you need to know
According to the UAE Federal Tax Authority, the headline corporate tax rate for taxable income exceeding AED375,000 is 9%, while the tax rate for taxable income earning up to AED375,000 will be 0% (a way to support small businesses and start-ups in the country).
With such rates, the UAE corporate tax regime will be amongst the most competitive in the world—making the country, as well as Dubai, still the ideal places for foreign investors and businesses.
Why invest in Dubai?
In 2020, Dubai was deemed 1st in Arab world in terms of Economic Performance, the Best City for Expats in the MENA region, as well as the third most resilient economy for post COVID-19 recovery. Prior to that, in 2019, it was also recognized as the World's Leading Business Travel and MICE Destination. In addition, Dubai attracted 523 Foreign Direct Investment (“FDI”) projects in 2018—over 40% higher than the previous year.
Time and again, Dubai has proven its ability to fortify its business activities, even in the midst of economic cycles and crises. It has successfully steered towards new directions in an effort to reactivate the economy and come out more resilient in the international arena. It has given an astute approach in terms of trade, which has allowed it to become one of the few nations to successfully thrive in the new era.
Many financial experts also believe that Dubai is one of the best places to invest in or start a business in because the emirate has shown paramount strength by stepping up ahead of the world through understanding the economy-wide phenomena surrounding these two downturns—basing its initial actions and initiatives on their thorough evaluation of the recent economic cycles.
If you still have more questions about Dubai and its real estate charges and taxes, just shoot me a message!
Tareq Al Wattar
Limitless Avenue Advisory