LIVING IN THE UAE: PROS AND CONS FOR EXPATS

Expats constitute the majority of the population in the United Arab Emirates, comprising about 90% of the 10.1 million residents.  It offers numerous advantages for immigrants, from a low-tax environment to hassle-free business startup opportunities. Add to this the high standard of living and exceptional services, and it’s easy to see why the UAE is a popular destination for expats. 

Yet, life in the UAE isn’t without its challenges. Adjusting to the local lifestyle can vary significantly based on your background; for instance, newcomers from Islamic countries might find it easier to adapt to local customs. Weighing the pros and cons carefully is crucial before making the leap to relocate.

Content:

• Advantages of Living in the UAE
• Disadvantages of Living in the UAE
• Why Buy Real Estate in the UAE: Key Benefits
• Potential Drawbacks and Limitations of Buying Real Estate in the UAE

Advantages of Living in the UAE

The UAE offers a stable economy, with the local currency remaining steady against the US dollar since 1997. This stability, coupled with consistently growing real estate values, makes it an attractive destination for foreigners. For instance, property prices in Dubai grew by 11.3% in the first quarter of 2022, according to Reuters.

If you are considering this country as a place in which to develop your business, the lack of taxes is very enticing. Starting from June 1, 2023, a corporate profit tax of 9% will apply only to companies with revenue exceeding AED 375,000 (USD 102,000). Most businesses only pay a 5% VAT, significantly lower than the 17% to 27% in Europe. 

Additionally, The UAE values skilled professionals, with an average salary of about AED 20,000 (USD 5,500) per month. Companies often provide additional benefits such as rent, a car, medical insurance, and assistance with residence permits.

Other appealing factors include:

Climate: While the UAE is known for its hot weather, which can be appealing for those who enjoy warm climates. The sea water temperature is around 27°C, making it ideal for beach activities and water sports.

Safety: The UAE has a low crime rate and is ranked second in global safety, according to Numbeo

Amenities: The UAE boasts a thriving hospitality industry with new hotels, restaurants, parks, and more. Most large communities have shopping malls, schools, kindergartens, and hospitals.

Disadvantages of Living in the UAE

Despite the numerous benefits of living in the United Arab Emirates, there are some notable drawbacks:

Summer Heat: While the UAE's hot and dry climate can be a welcome change from long, cold, and rainy seasons elsewhere, the intense summer heat can be challenging. Temperatures can soar above 40°C (104°F) during the summer months. Even with air conditioning at home, in the car, and at the office, it can still be uncomfortable. However, many expats adapt to the conditions and enjoy spending time on the beach.

Adapting to Local Customs: The strict Islamic laws in the UAE impose various restrictions that may be difficult for some foreigners to adapt to. These include regulations on drinking alcohol, eating in public during Ramadan, wearing revealing clothing, and public displays of affection. While Dubai is more lenient, other emirates like Sharjah are more conservative, and violations can result in penalties.

Complexity of Obtaining Citizenship: Gaining citizenship in the UAE remains challenging and typically requires long-term marriage to a local citizen, representing the country in international competitions, or serving the state for many years. However, obtaining residency has become more accessible. A new law passed in 2021 allows scientists, engineers, doctors, artists, and major investors to be eligible for naturalization. Likewise, purchasing real estate, investing in business, or meeting specific professional criteria can lead to a residence visa, providing many of the same benefits as citizenship in everyday life.

Why Buy Real Estate in the UAE: Key Benefits

Many foreigners looking to protect their money from inflation and achieve capital gains choose UAE real estate. This decision opens up extensive opportunities for living and business. Dubai, in particular, is the most sought-after location. In 2022, the British, Indians, and Italians were the top three nationalities purchasing real estate in this emirate. Experts attribute this trend to Europeans relocating due to rising taxes, which boosts sales.

If you consider buying property in the UAE, keep in mind these key benefits:

Attractive Financial Opportunities: The UAE real estate market offers compelling financial benefits. Investors can take advantage of favorable mortgage terms, with average interest rates around 3.5%. Additionally, purchasing off-plan properties can save up to 20% of the final value. This potential for savings and the opportunity to profit from price appreciation make real estate an appealing investment choice.

Flexibility and Convenience: Owning property in the UAE doesn’t require you to reside there full-time. You can manage your investment remotely and benefit from rental income, which can be easily deposited into your account. Hiring a property management company can further simplify the process, handling everything from maintenance to tenant relations on your behalf.

Strong Rental Yields: Dubai offers robust rental yields, with average returns ranging from 5% to 8.4% per annum. This high rental yield provides a solid return on investment, making it an attractive option for generating passive income.

Potential Drawbacks and Limitations of Buying Real Estate in the UAE

While investing in real estate in the UAE offers numerous advantages, there are some potential disadvantages that prospective buyers should be aware of. Understanding these factors can help you make a more informed decision and ensure that your investment aligns with your goals and expectations.

• Considerations for Purchase: Selecting the right property requires careful evaluation. Factors such as the property’s location, size, condition, and the demand in the area should be thoroughly assessed. If your primary goal is to achieve a high return on investment, ensuring that these aspects align with market trends is crucial to avoid a vacant property and to maximize your investment’s profitability.
• Renovation Restrictions: Unlike many other markets, the UAE imposes strict regulations on property modifications. Major changes, such as moving doorways or extensive renovations, often require special permits, and some alterations, like glazing balconies or repainting façades, may be prohibited altogether. This can limit your ability to personalize or enhance your property according to your preferences.
• Community Rules: Each community or building in the UAE may have its own set of rules and regulations. These can include restrictions on activities such as drying clothes outside, placing flowerpots on terraces, or keeping pets. It's important to familiarize yourself with these rules before purchasing a property to avoid any unexpected surprises or conflicts with community guidelines.