With world-class infrastructure, technological developments, business investments, and trading opportunities, Dubai is a hotbed for foreign investments. The breathtaking skylines, excellent infrastructure, renowned architecture, and grand shopping malls make Dubai an ideal destination for property investors.
Owing to the factors stated above, Dubai is emerging as one of the global leaders in the real estate market, generating a higher return on investment (ROI) than other prominent cities in the world.
As per the August 2022 report, the real estate market recorded an average of Dh1.4 billion sales transactions on a single day.
The recent introduction of the golden visa scheme for real estate investors and buyers who invest in or purchase property worth AED 2 million has increased the popularity of Dubai properties. The 10-year residence permit stimulates real estate investments, making Dubai ideal for buyers compared to any other metropolitan city.
The real estate business in the UAE has changed drastically and shifted its focus to the long-term investment option, a sign of Dubai’s unprecedented growth rate.
Establish your real estate brokerage business with 100% ownership
As per the UAE legislation reform, expats or foreigners can establish a real estate brokerage company with full ownership.
These regulations came into effect in 2021, removing real estate brokerage from the ‘restricted category’, and allowing more foreign brokerage firms to start real estate businesses in Dubai with 100 per cent ownership.
Moreover, the government has made the overall process more seamless. New businesses can apply for a licence through the Department of Economy and Tourism (DET) and obtain a Real Estate Regulatory Agency (RERA) approval through the Trakheesi system.
Trakheesi, managed by the Dubai Land Department (DLD), was developed to streamline the real estate sector and its services, such as licences, e-cards, and approvals. It is integrated with DET to gather centralized data. Recently, the government made it mandatory for brokerages to register and get unique Trakheesi numbers.
Role of local sponsor
A local sponsor act as a service agent to register the professional business activities in Dubai Economy and Tourism (DET).
They facilitate documentation for the company with government authorities and municipalities, but do not involve in the functioning or management of the business. Moreover, local sponsor does not hold any equity stake in the business.
Anti-money laundering and CTF regulations
The UAE has taken steps to prevent money laundering in real estate transactions. The government strictly forces regulators to make the sector more controlled and monitored.
The underlying law for anti-money laundering in the UAE is Decree-Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations.
Under the AML regulations, real estate brokers must identify suspicious transactions and comply with the following requirements in the UAE:
l Understand the source of funds transferred
l Implement necessary customer due diligence (CDD) based on screening, profiling, and previous professional status.
l Manage necessary measures such as internal governance, policies, and monitoring to ensure mitigation of ML risks.
Real estate brokerage companies must register with the Financial Intelligent Unit- goAML service portal. It’s an anti-money laundering reporting platform launched by the Central Bank of UAE to restrict money laundering (ML), terrorism financing (TF) and other unlawful activities.
Real estate brokerage activities
Under real estate brokerage, there are two types of business activities involved:
> Buying and selling
> Leasing
Most brokerage companies can have both activities under one licence. However, companies can be involved in related real estate activities with additional approval from the authorities.
Set up a real estate business
1. Registration
Upon deciding on the trade name, you must submit the required business documents to complete the registration process through the online portal. Meanwhile, you will have to get a Real Estate Regulatory Agency (RERA) certification.
2. RERA Certification
To become a real estate agent, you must get Certified Training for Real Estate Brokers issued by the RERA.
You receive the certification by attending a four-day training session and clearing the subsequent exam. The real estate agent employed by the company must be a holder of the broker's card issued by RERA.
3. DET licence
You must submit the RERA approval, tenancy contract, passport copies, and trade name certificate to receive the final real estate licence from the authorities. Once you submit all the required documents, the Department of Economy and Tourism (DET) will give you a payment voucher. After payment, DET will issue the licence.
4. RERA registration
Now you can register your real estate company with RERA with the following documents:
· RERA application form
· DET business licence copy
· Payment receipt
· RERA course certificate
· Tenancy control/Ejari copy of the office
The governing authority will then grant you a commercial license to conduct operations.
To hire and sponsor employees, like any other mainland company, the company must register with the Ministry of Labor (MOL) and Directorate of Residency and Foreigners Affairs (DNRD).
5. Office space
According to the Department of Economy and Tourism rules, you must have leased office space in a business center or a completely independent office anywhere in Dubai to get a real estate brokerage licence.
Even if you set up your own real estate business, you can outsource some of your operations, such as your accounting services, to cut costs and set up your business efficiently. The cost of getting a real estate brokerage permit depends on factors such as your business activities, company size, and location. In addition to that, you pay for the certification.
Conclusion
The real estate market has been generating about 5.5% of the overall gross domestic product (GDP) annually, making it one of the most lucrative business setup options. It is an excellent investment for those interested in earning profits in this sect.
*As published on Khaleej Times