Why Dubai is attractive for foreigners 1

Why Dubai is attractive for foreigners 1

08.10.2022 (updated 11.30.2022)

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  • Why Dubai is attractive for foreigners

Nationals of various countries often select Dubai as a summer holiday destination. The reasons are obvious: first-class service, warm sea, and comfortable hotels. But what are the incentives to relocate to this emirate? Dmitry Zolotko, Senior Sales Manager, and Aram Grigoryan, Senior Consultant at AX CAPITAL (a real estate agency), explain why Dubai is so popular, what the crucial reason for relocation is, and what changed in expats’ views under the new geopolitical circumstances.

Contents:

Key expectations from moving to Dubai

Dmitry Zolotko remarked that expats choose this destination for several reasons. Some want to keep their money safe from inflation (citizens and immigrants don’t even pay profit taxes under the local laws). Others want to apply for a permanent residence permit and provide a high standard of living for themselves and their families. The UAE is attractive because people of any age and gender feel safe there. Their expectations are usually fulfilled. Many immigrants, however, are surprised to find out that some types of taxes are actually levied in this country, such as a startup tax or a road use tax. This does not affect the quality of living, though, as everyone gets used to that quickly.

Aram Grigoryan believes that many citizens of colder countries are going to Dubai for the sake of the warm climate, stability, comfort, development opportunities, and a high level of service. Their expectations are justified in most cases but you should remember that some people might not be satisfied with other aspects, such as the excessively strict local laws.

What is attractive about Dubai and the Emirates

There are many aspects of living in the Arab Emirates and its most cosmopolitan city to interest nationals of other countries. Mr. Grigoryan lists the proximity to the sea, the climate, the transparent processes of starting and doing business, and the tax policy. For instance, most companies pay only a 5% VAT, which is a very competitive rate in the global market. The new corporate profit tax will come into effect only on June 1, 2023.

Dmitry Zolotko also named the climate and the extremely comfortable weather (even from September to May, when the weather is not great in most other places) as attractive factors. He also noted that starting up a business is a really well-designed process, especially in Dubai. For instance, local analysts study the business plan before allowing a person to start their business, to make sure their idea is viable. As a result, many entrepreneurs take the decision of starting a firm much more seriously and calculate the risks better.

Relocation incentives related to the pandemic and the current political circumstances

The demand for relocation is currently affected by several drivers, including the pandemic, the special military operation, as well economic and geopolitical changes around the world.

According to Dmitry Zolotko, the reasons motivating citizens of other countries to move to the UAE have somewhat changed recently. Businessmen attracted by the transparency and ease of doing business in this country and those who wanted to deal with cryptocurrencies banned in their home countries used to relocate to the Emirates a lot. Now, expats are pursuing different goals. When strict measures to contain the spread of the coronavirus were adopted, many preferred Dubai to other destinations because the Emirati Government took proper and quick steps to resume normal life. Another reason to move, although not the only one, was the recent political events and changes.

Adam Grigoryan commented on the motivation behind living in the Arabic Emirates as follows: people are striving to improve their standard of living, and for many, it is becoming increasingly difficult to stay at home. Mr. Grigoryan agreed with his colleague that one of the reasons to relocate during the pandemic was the UAE’s quickly recovering and returning to the old ways. Now, the key driver is that this country remains neutral on the political arena and embodies stability.

Residence vs. investment

The experts said that purchasing a buy-to-live property in Dubai has lately become more popular but the key goal is still turning a property into an asset. Aram Grigoryan remarked that buyers of real estate for permanent residence can pursue one of the two goals: making a long-term investment or a short-term profit by purchasing an off-plan project and reselling it upon construction completion. In both cases, however, the key motive is protecting your earnings.

Adaptation to the new place and assistance from the agency team

As for adaptation to the new lifestyle, Mr. Zolotko noted that getting used to it can take from three to six months.

The real estate experts confirmed that they could assist clients even after closing the deal on the purchase, if the business relationship turned into a friendship, which happens quite often. Mr. Grigoryan emphasized that he was always happy to share his experience with those who are only starting a life in the new place. Dmitry Zolotko confirmed that members of the AX CAPITAL team assisted their clients in many things, for instance, explained how to pay utility bills and helped with registering a business or opening a bank account.

Potential reasons to leave the UAE

The experts are unanimous: there are very few cases of expats selling their property in the UAE and leaving. Aram Grigoryan says that such a change of heart could be caused by family reasons or a job-related transfer. He knows cases when expats left the Arab Emirates but returned there in a few months, realizing they didn’t want to accept a lower quality of life.

According to Mr. Zolotko, emigrants are mostly people who have stayed in the UAE for 10 – 15 years and want to experience living in another country and see what it has to offer. Another reason to leave could be that immigrants who moved to the Emirates many years ago are not IT- or crypto-savvy. These areas are now booming in Dubai, so some professionals who have been living far from their homeland for years can no longer find a job and are replaced by the new generation of expats with freshly acquired knowledge in these sectors. Dubai is an expensive city, so people forced out of their jobs by newcomers are no longer able to make enough money. This stimulates some of them to leave.

AX CAPITAL is a real estate agency in Dubai that offers a wide range of services in the UAE market: from selecting a property to after-sales service. Our experienced team members will gladly help you to cut through the red tape and make sure the deal is immaculate.

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