Dubai has one of the most lucrative real estate sectors in the world that is presently on a high, drawing investors, expatriates, and entrepreneurs from around the world. Beginning a real estate business in the UAE means great opportunities, as demand for property rises, further tax advantages, and yet another food for thought-the region’s unique safety and lifestyle attractions.
Benefits of Starting a Real Estate Business
- Tremendous Growth: Shortly after the pandemic, the resurgence of the real estate market in Dubai is staggering. The city of Dubai has a growing number of opportunities and tax benefits and is attractive to families and investors alike.
- International Appeal: The expatriate population is fast on the rise, and Dubai is still considered a major hub of international investments.
- Tax Benefits: A tax-free environment across personal incomes and attractive corporate tax systems have made it an attraction for global entrepreneurs.
- Great Location: Dubai is well-placed, thus a point of access for broader investors and clientele on either side of the world.
Rising Demand for Real Estate Services
Post-pandemic recovery tells a tale of steady growth in real estate success stories in the city of Dubai. There are several motivators for great demand:
High-net-worth individuals and families: relocating for tax benefits and better lifestyle living.
Foreign investors: looking to have a secure market to diversify their portfolios.
Expatriates: looking to invest in homes or rental income-generating properties in an active market.
The costs involved in setting up a real estate business.
Starting a real estate business is bound by the actual costs associated with it and approval. Quick to the point:
Estimated license costs.
Department of Economic Development (DED):
- Initial registration: AED 1,350;
- License Fee: AED 15,000 plus 5% of total rent.
RERA Activity Fee: AED 5,000 by activity.
Approvals and Certifications
- RERA Approval: A license of good standing allows one to work legally within Dubai’s real estate sector.
- RERA Registration: A regulatory check to find out whether things are compliant or not; it gives your customers a reason to trust you heavily.
- RERA Broker Card: An utmost requirement to perform any real estate transactions.
- ORN Certificate: A mandatory requirement for the trade name and operating number, adding important credibility to your business.
Choosing the Right Jurisdiction
DED Mainland: Mainland will be the right choice if you plan to operate as a real estate agent in the UAE, ensuring free access to the local market.
FreeZone: This is recommended if you consider properties outside the UAE.
DMCC offers similar real estate activities and provides a tax-free and flexible path toward international operations.
Corporate Tax Registration
Introducing Corporate Tax registration as mandatory for all businesses in the UAE; when the annual profits exceed AED 375,000, a 9% corporate tax will apply. This ensures compliance with the financial regulations of the UAE while also boosting the reputation of their establishments.
The threshold of VAT for real estate businesses
Real estate businesses must register for VAT if their supplies exceed AED 375,000 in a calendar year. After registration,
- VAT should be charged on the sale of property, leasing, or renting it out.
- It is imperative to register with the Federal Tax Authority (FTA).
The need for a business bank account
Setting up a business bank account is very important for the following reasons:
- To ensure that transactions can be handled properly.
- To offer assurance to the clients and investors.
- To provide smooth payment for property deals.
Learn how to set up a business bank account here.
The following steps should be followed to launch a real estate business.
- Register the business with the DED.
- Get all the final approvals for the RERA, broker cards, and certification for an ORN.
- Open a business bank account to handle the financials.
- Register for corporate tax and VAT.
- Start working on building a real estate portfolio and networking.
How Can RAS Corporate Advisors Help You
With their years of experience in business setups, licensing, and compliance requirements, RAS Corporate Advisors can assist you through all stages of starting a real estate business in Dubai. They take care of everything from getting approvals to tax compliance; everything is done smoothly and without hassle.
Would you be interested in building up a real estate empire? Get in touch with us today!