Pros and cons of living in the UAE for expats

Pros and cons of living in the UAE for expats

11.01.2021 (updated 01.20.2023)

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  • Pros and cons of living in the UAE for expats

Expats constitute the majority of the population in the United Arab Emirates. Foreigners account for 90% of the 10.1 million people living in this country. It offers numerous advantages to immigrants, such as low taxes, an opportunity to start up a business easily, the right to apply for a permanent residence permit if you decide to purchase housing in the UAE, and other advantages related to standards of living and service.

Nevertheless, there are some substantial disadvantages to living here. The pros and cons of living in the UAE may vary for nationals of different countries: for instance, residents of Islamic states may get used to local rules and regulations faster. You should weigh all pros and cons before making a decision to relocate.

Contents:

Pros and cons of living in the UAE

Advantages of living in the Emirates

During periods of global disruptions, many foreigners are attracted by the Emirates’ stable economy. For instance, prices of everyday goods are not subject to fluctuations in the UAE, as the exchange rate of the dirham, the local currency, relative to the US dollar has remained the same since 1997. Real estate investment pays back because property value tends to grow consistently. According to Reuters, the average property prices in Dubai grew by 11.3% in the first quarter of 2022.

If you are considering this country as a place in which to develop your business, the lack of taxes is very enticing. For instance, the corporate profit tax will only be charged starting from June 1, 2023. It will reach 9% for companies whose revenue exceeds AED 375,000 (USD 102,000). Most businesses must only pay a 5% VAT, while in Europe this tax varies from 17% to 27% depending on the country.

The UAE values competent professionals. The average salary here is about AED 20,000 (USD 5,500) per month. Companies take care of their foreign employees. For instance, an employment agreement can stipulate that the employer pays the employee’s rent, provides them with a car, covers their medical insurance, and helps to apply for a residence permit.

Other factors mentioned as arguments for relocation are as follows: 

  • ClimateThere is an average of 27 rainy days a year in Dubai. For the rest of the time, the city is basking in the sunlight. The sea water temperature is 27 oC on average
  • HealthcareThis country’s healthcare is among the best in the world. It is free for UAE citizens, while expats have to get an insurance policy. The cost and the coverage depend on the list of services included and the client’s age
  • SafetyThe Emirates are considered to be a safe country. The local crime rate is quite low. According to the global database Numbeo, the UAE is number two in the global safety rating, second only to Qatar
  • AmenitiesThe hospitality industry is actively developing in the UAE. New hotels, restaurants, cafés, parks, and cycling lanes open here all the time. Well-designed districts have access to essential transport interchanges. Most large communities in Dubai and Abu Dhabi have shopping malls, schools, kindergartens, and hospitals on the premises. Dubai has climbed to the first place in the rating of top tourist destinations in 2022, according to TripAdvisor

Disadvantages of living in the Emirates

Despite so many benefits of living in the Arab Emirates, there are still a few shortcomings. The most common of them are:

  • Summer heatAlthough the hot and dry weather of the UAE may seem a paradise compared to long months of rain and cold in some other countries, living in a desert climate is not a great fit for everyone. The temperature can go above 40 oC in summer months, and even air conditioners at home, in the car, and at the office aren’t always a salvation. Nevertheless, most expats get used to new conditions, according to their posts on the forums, and are happy to spend more time on the beach
  • Sharia lawsThe strict rules of this Islamic country impose a lot of restrictions that concern drinking alcohol, eating food in public places during Ramadan, wearing scanty clothes, kissing and hugging in public, etc. Residents of Dubai are ready to turn a blind eye on much of the above, but violators can face penalties in more conservative emirates, such as Sharjah
  • Complexity of becoming a citizenA UAE passport is not easy to get. In the past, the only way was staying married to a local citizen for a long time, playing for this country in international competitions, or working for the benefit of the state for many years. However, under a new law passed in 2021, scientists, engineers, doctors, representatives of creative professions, and large-scale investors are also eligible for naturalization. In reality, such cases are exceptions, not the ruleEven buying real estate in the UAE does not guarantee citizenship, although the associated drawbacks and risks can be mitigated. The UAE now has many programs for foreigners whereby they can apply for a residence visa and enjoy an extended list of rights without having to become a citizen. The residence status is little different from that of a citizen in everyday life

Advantages of purchasing real estate in the UAE

Many foreigners who would like to protect their money from inflation and achieve capital gains opt for UAE real estate. Such a decision creates extensive opportunities for living and business. Dubai is the most in-demand location. In 2022, the British, Indians, and Italians were the top three nationalities purchasing real estate in this emirate. Experts are saying that Europeans tend to relocate because of the growing taxes. This demand boosts the sales.

If you buy housing in the UAE, the benefits will be as follows:

  1. property in Dubai
  2. Good bargains on real estate purchases For instance, you can take a mortgage or use an installment plan from the developer. The average interest rate on a loan is 3.5%, while purchasing an off-plan property will save you up to 20% of its final value. Real estate agents can help you to select the best option, provide all the necessary information, and guide you through the huge number of listings. If you wish to resell your property later, you can make a profit on the price differential
  3. You can hire a management company to monitor the condition of the premises and find tenants without your direct involvementYou do not have to live in the UAE all the time. Everything can be done remotely, and rental income will just arrive in your account

You will thus be able to return the investment in the purchase. The average rental yield of Dubai homes is 5–8.4% per annum

You should take into account several factors before making a purchase decision, such as the property’s location, floor area, and condition, as well as the demand for housing in this district. If your key purpose is return on investment, you must assess the property’s features ahead of time to make sure your investment is lucrative and your property does not stay vacant

Disadvantages and restrictions of purchasing real estate in the UAE

The disadvantages and drawbacks of owning real estate in the UAE are usually subjective. Nevertheless, they can dissuade some people from purchasing a home in this country:

  • Poor choicesYou should take into account several factors before making a purchase decision, such as the property’s location, floor area, and condition, as well as the demand for housing in this district. If you key purpose is return on investment, you must assess the property’s features ahead of time to make sure your investment is lucrative and your property does not stay vacant 
  • Inability to renovateThis could seem surprising, but making alterations or moving a doorway requires a special permit in the UAE, while glazing balconies or repainting façades is completely prohibited. You should take this into account when you select a property: if you are not exactly happy with it, you shouldn’t hope to remodel it drastically
  • Strict community rulesThese restrictions are imposed by each individual community or building and are not universal. Nevertheless, you should ask questions about things forbidden in a specific community ahead of time. The answers may surprise you: for instance, there can be a ban on hanging out your washing to dry outside, putting flowerpots on the terrace, or keeping pets

Contact AX CAPITAL to avoid any mistakes with property selection and make a wise property investment in Dubai and other emirates. The professional team at this real estate agency in Dubai will consult you on all aspects of selecting villas and apartments, while its lawyers will do all the paperwork.

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