Investing In Dubai From India: A Guide For Indians

Dubai is a popular choice for Indians looking to invest in real estate abroad. The city's tax-friendly laws, residency benefits, and high rental yields make it an attractive option for investors seeking to maximise their financial gains and minimise their tax liability. In this guide, we will explore the benefits of investing in Dubai, the process of purchasing property, and key considerations for Indian investors. We will also discuss the impact of the recent changes to Dubai's Golden Visa rules and how they have fuelled demand for luxury residences in the city.

Indians can invest in Dubai real estate

Dubai is a popular destination for Indians looking to invest in real estate abroad. Here are some reasons why:

High Rental Yields

Dubai offers better rental returns than Indian cities like Mumbai and Delhi, with a rental yield of 5–7%. This means that real estate investors can earn a respectable return on their investment. Additionally, Dubai's rental market has been stable, with rental rates remaining consistent over the years.

Tax-Free Environment

Dubai's tax-free investment environment is another major attraction for Indian investors. The city imposes no income, capital gains, or property taxes, allowing investors to keep a larger portion of their rental income. There are also no tax repercussions when selling properties, making it a very alluring location for real estate investors.

Strong Economic Growth

Dubai's diverse economy, driven by industries like tourism, real estate, trade, and logistics, makes it an attractive location for real estate investment. The demand for business and residential real estate has been increasing, and this trend is expected to continue, making it an ideal time to invest in Dubai's real estate market.

Cheap Property Prices

Compared to other major cities like London or New York, Dubai's property costs are relatively low. This makes it an ideal destination for middle-class Indian investors seeking secure investments with high returns. Additionally, the Dubai government has implemented initiatives to attract real estate investors, such as offering resident visas to property investors.

High-Quality Infrastructure

Dubai's first-rate infrastructure, including state-of-the-art medical facilities, sophisticated airports, and efficient public transportation, is another factor that attracts Indian investors. The transparency and regulation of Dubai's real estate market also provide investors with confidence in their investments.

Ease of Property Registration

The process of registering a property in Dubai is much simpler than in India, making it a more attractive option for Indian investors.

Higher Value for Money

Dubai offers a better value proposition when it comes to property purchases. For instance, with $1 million, one can buy approximately 99 sq. m. of property in Mumbai, but 162 sq. m. of property in Dubai.

Steps for Indians to Invest in Dubai Real Estate:

• Determine Your Reason for Purchase: Decide if you want to buy property for investment purposes or for personal use. If you plan to rent out the property, look for areas with high rental yields, and consider that apartments generally have better rental yields than villas.
• Know the Type of Property You Want: Foreign investors often opt for townhouses, villas, or apartments in gated communities with leisure amenities. Research and identify the specific areas and property types that align with your investment goals.
• Connect with Legal and Experienced Real Estate Agencies: Engage with reputable and experienced real estate agencies in Dubai. Verify their credentials and ensure they are registered with the Real Estate Regulatory Agency (RERA).
• Understand Due Diligence: Ask as many questions as possible when considering a property. Verify the reputation and track record of both the developer and the real estate agent. If buying from a developer, cross-check their build quality and delivery commitments.
• Understand the Purchasing Process: In Dubai, you can buy property directly from a developer (off-plan) or from a private seller (resale). When buying off-plan, you'll need to submit your passport along with a reservation agreement specifying the terms of the deal.
• Documents Required: To buy property in Dubai, you'll need to provide your passport as identification. While a residency permit is not required for the purchase, you will need one to live in Dubai. The UAE government offers a 6-month "Property Holders Visa" for foreign investors to facilitate their stay during the research and purchase process.
• Calculate Taxes and Fees: Be aware of the various fees and taxes associated with buying property in Dubai, such as mortgage fees, real estate broker's fees, developer's fees, etc. Include these in your budget, along with the property cost, deposit, transfer fee, purchase fee, and currency exchange differences.
• Understand Mortgages: Obtaining mortgages in Dubai can be challenging, and self-certified mortgages are not allowed. Consult local real estate experts for the latest advice on mortgage regulations and ensure that your mortgage repayment, along with other monthly expenses, does not exceed 35% of your total monthly income.
• Understand Leasehold and Freehold Areas: Dubai allows expats to purchase property within specific regions known as freehold areas, such as Al Barsha, Emirates Hills, and Ras Al Khour. Leasehold areas, on the other hand, offer lease periods of 10 to 99 years without full ownership, including areas like Jumeirah and Deira.
• Pre-approved Mortgage: When you decide on a property, ensure that you have pre-approved financing from a lending institution to facilitate a smooth transaction process.

High rental yields of up to 7%

Dubai's real estate market is known for its high rental yields, which are a significant factor when considering a property investment. The average rental yield in Dubai is around 7%, significantly higher than in other global cities. For example, Hong Kong has a nominal return of 2.3%, London has 2.76%, and Singapore has 2.5%.

Jumeirah Village Circle (JVC)

JVC is a fast-growing, family-friendly area with a mix of villas and townhouses. It offers a good lifestyle at relatively affordable prices, making it attractive to long-term tenants. The average rental yield for JVC is 8.38% for studios, 8.24% for one-bedroom apartments, 7.63% for two-bedroom apartments, and 7.34% for three-bedroom apartments. The average sale price is also one of the lowest in Dubai, starting from $168,803 for a studio.

Jumeirah Lake Towers (JLT)

JLT is a densely populated hub with residential and commercial properties, known for its community-focused environment and diverse residences. It offers impressive rental yields, especially for studios, with an average yield of 9.07%. For one-, two-, and three-bedroom properties, the yields are 5.81%, 5.67%, and 5.14%, respectively. The average cost of a studio is $190,585, and you can expect a monthly rent of around $1,441.

Business Bay

Business Bay is Dubai's Central Business District (CBD), with residential, office, and commercial developments. Renting out a studio in this area can provide a rental yield of up to 7.48%, with an average buy price of $291,323. Apartments in Business Bay are more expensive, with a one-bedroom apartment costing around $457,404. Rental yields for apartments are also impressive, with yields of 6.55% for one-bedroom, 5.79% for two-bedroom, and 5.58% for three-bedroom rentals.

Dubai Marina

Dubai Marina is a sought-after waterfront location with excellent amenities and a cosmopolitan atmosphere. It offers an average net yield of 6.5%, ideal for short-term rentals or holiday homes. The average rental yield for studios in Dubai Marina is 6.31%, with monthly rents of approximately $1,860. For one-, two-, and three-bedroom apartments, the yields are 6.57%, 6.67%, and 6.86%, respectively.

Al Furjan

Al Furjan is gaining a reputation as one of Dubai's most outdoor-friendly neighbourhoods, with green spaces, bike tracks, and shared swimming pools. It is an excellent buy-to-let option, with a studio costing around $145,661 and fetching monthly rent of $1,021, resulting in a yield of 8.41%. For one- and two-bedroom apartments, the yields are 7.29% and 6.51%, respectively.

Other Notable Areas

• Dubai Silicon Oasis (DSO): An up-and-coming technology hub with an average net yield of 8.3%.
• Dubai Sports City (DSC): Budget-friendly living with a 7.8% net rental yield.
• Za'abeel: A relatively new and prestigious development in the centre of Old and New Dubai, offering a 7.3% net yield.
• Arabian Ranches: A suburban environment with good rental returns, averaging 6.5%.
• Jumeirah Beach Residence (JBR): Targeting young working professionals and families, with an average rental yield of 5.82%.

No personal income tax, capital gains tax, or wealth tax

Dubai is an attractive prospect for investors from India, particularly in the real estate market. One of the key draws is the absence of personal income tax, capital gains tax, and wealth tax. This means that investors can retain a larger proportion of their profits, increasing the profitability of investments.

The tax benefits in Dubai are significant when compared to India, where there is a 20% tax on international investments, including rental income earned from real estate investments. This tax is deducted at the source, so the income received is already reduced by 20%.

Dubai's lack of taxation on income, capital gains, and wealth means that investors can access their profits more readily and do not need to navigate a complex tax system. This is a key advantage for investors looking to diversify their portfolios and access new markets.

Additionally, Dubai has a Double Taxation Avoidance Agreement (DTAA) with India, which further mitigates the impact of taxes on investments. This agreement ensures that income earned in one country by a resident of the other is not subject to double taxation, providing further financial benefits for investors.

The combination of no personal income tax, capital gains tax, or wealth tax, along with the DTAA, makes Dubai a financially attractive destination for investors from India, particularly in the real estate sector.

Golden Visa programme

The Golden Visa programme is a long-term residence visa that enables eligible individuals to live, work, and study in the UAE, including in Dubai, for five or ten years. It is available to investors, entrepreneurs, scientists, outstanding students, graduates, humanitarian pioneers, and frontline heroes. The visa offers several benefits, including:

• No requirement for a sponsor
• The ability to stay outside the UAE for more than six months without losing visa validity
• The ability to sponsor family members, including spouses and children of any age, as well as an unlimited number of domestic helpers
• Access to various government services, such as healthcare, education, and utilities, on par with UAE citizens
• Opportunities to establish and expand businesses in the UAE, with support for entrepreneurship and innovation
• A favourable tax environment, with no personal income tax or capital gains tax
• High rental yields on real estate investments
• Excellent international flight connections through major airports in the UAE

To be eligible for the Golden Visa, individuals must meet specific requirements depending on their category. For example, investors in public investments must invest a minimum of AED two million in an investment fund, real estate, or a business and submit the relevant documentation. Real estate investors must own one or more properties with a total value of at least AED two million. Entrepreneurs must have an economic project of a technical or innovative nature with a value of at least AED 500,000. Skilled professionals must have specialised expertise or contributions that benefit Dubai's development. Outstanding students must be accepted by recognised universities or educational institutions in Dubai. Finally, retired individuals must meet specific financial criteria to demonstrate their financial stability.

Long-term residence visas

Dubai offers long-term residence visas for visits, work, and living. The type of long-term residence visa you can apply for depends on your eligibility.

10-year UAE Long-Term Residence Visa

You are eligible for a 10-year UAE long-term residence visa if you meet one of the following requirements:

• You invest at least AED 10 million in the public sector (UAE Investor Visa).
• You are a person with a specialized talent, such as a doctor, scientist, inventor, or specialist, or you have a special talent in the field of culture and art.

5-year UAE Long-Term Residence Visa

You are eligible for a 5-year UAE long-term residence visa if you meet one of the following requirements:

• You invest in a property in the UAE (UAE Investor Visa, also known as the Property Visa UAE). The property must have a gross value of at least AED 5 million, and the money you invest cannot be loaned from someone else.
• You are an entrepreneur with an existing project with a minimum capital of AED 500,000.
• You are an outstanding student with a minimum grade of 95% in a public or private secondary school or a GPA of at least 3.75 in a university in or outside the country after graduation.

Documents Required for the UAE Long-Term Residence Visa

When applying for the entry permit, you will need the following documents:

• Copy of your passport
• Passport-size pictures
• Bank statement for the past 6 months
• Any additional documents related to your purpose, such as a company trade license copy, copy of partnership contract, ID of other partners, or a copy of the memorandum of association.

When applying for the long-term residence visa once you are in the UAE, you will need the following documents:

• Immigration Establishment Card
• Any documents related to your purpose of travel

Please note that this is not an exhaustive list of documents, and you may need to obtain approval from the UAE authorities before applying for the visa. Due to the sensitive nature of this visa, you may need to get help from an attorney or other authorized legal entity.

How to Apply for a UAE Long-Term Residence Visa

For the UAE Investor Visa, the registered company will act as your sponsor, whereas for the UAE Property Visa, the property you purchase or invest in will serve as your sponsor.

Before applying for a Residence Visa, you must first obtain a UAE Entry Permit, which is issued for multiple entries and is valid for six months. You can apply for an Entry Permit online. Once you have entered the UAE with an entry permit, you must go to the relevant visa-issuing authorities in the UAE and request the long-term Residence Visa.

UAE Residence Visa applications are issued at the General Directorate of Residency and Foreigners Affairs (GDRFA) of the relevant emirate in which you will live. You must also undergo a medical test to prove your fitness before applying for the residence visa.

Frequently asked questions