Did you know that Indian investors account for 40 percent of all residential deals in Dubai, with Rs 35K crore worth in total, which is almost double what it netted in 2021?

So what’s attracting Indians to make property investments in Dubai? We’ll discuss it and much more in this article.

Dubai is a city that never ceases to amaze and inspire. It is a place where dreams come true, where innovation meets tradition, and where the sky is the limit. For Indian investors, Dubai is more than just a city. It is a destination that offers unparalleled opportunities, rewards and advantages. In this blog, we will explore why Dubai continues to lure Indian investors in 2023, and what are the factors that make it one of the most attractive markets in the world. We will also look at how the upcoming tax changes in India are influencing the investment decisions of Indian buyers, and how Dubai’s lifestyle and culture appeal to them.

Whether you are a businessman, a professional, or a high net worth individual, you will find something in Dubai that suits your needs and aspirations. So, let’s dive into the reasons why Dubai is the ultimate choice for Indian investors in 2023.

Reason Why Indians are Investing in Dubai Dubai’s Strategic Advantages

One of the main reasons why Indian investors are drawn to Dubai is its strategic advantages. Dubai is a gateway between East and West, located at the crossroads of Asia, Europe and Africa. This advantageous position allows Indian investors to easily access markets in the Middle East, Africa, and Europe, making it an ideal hub for international trade and commerce. 

Dubai has a stable political climate and a business-friendly government, which makes it a secure and reliable place for Indian investors to park their money. The government has consistently supported foreign investment and has taken several steps to make the region more attractive to investors. The city has implemented investor-friendly policies, ensuring a transparent legal system, minimal bureaucracy, and ample protection for businesses. This stability and conducive atmosphere provide a sense of security for Indian investors, encouraging them to explore opportunities in Dubai. Some of these steps include:

• Offering 100 percent foreign ownership of businesses and properties in Dubai.

• Providing tax exemption up to AED 375,000 on business income and profits, and no income tax on for salaried persons.

• Establishing free zones and special economic zones that offer incentives and benefits for investors in various sectors.

• Developing world-class infrastructure and facilities that cater to the needs and demands of investors and residents.

• Creating a diverse and multicultural society that welcomes people from different backgrounds and cultures.

Dubai's economic growth is also worth mentioning. The city has seen remarkable progress over the years, diversifying its economy beyond oil and focusing on sectors such as finance, tourism, real estate, and logistics. This diversification has created a robust and resilient economy that offers a wide range of investment opportunities for Indian investors.

These strategic advantages give Dubai an edge over other markets and make it a preferred destination for Indian investors who want to expand their businesses, diversify their portfolios, or enjoy a high standard of living.

Dubai’s Property Market

Another reason why Indian investors are flocking to Dubai is its property market. Dubai’s real estate sector has been booming in recent years, driven by its strong demand, high returns, and attractive prices. Dubai’s property market offers a wide range of options for investors, including lavish villas, upscale apartments, and commercial spaces.

However, the most popular segment among Indian buyers is the luxury and high-end segment, which offers premium quality, exclusivity, and prestige. According to the latest research, Indian investors accounted for 40 percent of all home-buying deals in the luxury and high-end segment in 2022, with an average cost of Rs 3.6 crore to Rs 3.8 crore. Some of the factors that make this segment appealing to Indian buyers are:

• The availability of spacious and well-designed properties that suit the tastes and preferences of Indian buyers.

• The presence of world-class amenities and facilities that enhance the comfort and convenience of living in Dubai.

• The proximity to landmarks and attractions that add value and charm to the properties.

• The potential for capital appreciation and rental income makes it an appealing investment avenue for Indian investors seeking long-term returns.

While there are challenges and market fluctuations to consider, the overall growth and potential of the real estate market in Dubai continue to attract Indian investors.

The Impact of Tax Changes

One of the most important factors that is influencing the investment decisions of Indian buyers in Dubai is the impact of tax changes. The Indian government has announced that it will increase the tax collected at source (TCS) for foreign remittances under the liberalised remittance scheme (LRS) from 5 percent to 20 percent, except for education and medical purposes. This means that Indian investors who want to bought properties in Dubai will have to pay an additional 15 percent tax on their remittances from July 1 onwards. This had prompted many Indian buyers to expedite their purchases before the tax hike comes into effect, resulting in a surge in transactions in the first half of 2023. The impact of this tax change on both India and Dubai is yet to be seen, but it is likely to have significant implications for the investment flows and the property market dynamics in both countries.

For India, the tax increase is aimed at curbing the outflow of foreign exchange and boosting the domestic economy. The government hopes that by discouraging foreign investments, it will encourage more savings and investments within India, which will help in reducing the current account deficit and strengthening the rupee. However, some experts argue that the tax hike may have adverse effects on India’s economy, such as:

• Reducing the competitiveness and attractiveness of India as an investment destination for foreign investors, especially in comparison to other emerging markets.

• Creating a negative sentiment among Indian investors who may feel that they are being penalised for investing abroad, and may lose confidence in the government’s policies.

• Affecting the remittances from non-resident Indians (NRIs) who may reduce their transfers to India due to the higher tax burden.

• Impacting the education and health sectors, which rely heavily on foreign remittances for funding.

For Dubai, the tax increase is expected to boost its real estate sector in the short term, as more Indian buyers rush to complete their purchases before July 1. Dubai’s property market may see a spike in demand, prices, and transactions in the second quarter of 2023, which will benefit its developers, brokers, and sellers. However, some experts warn that the tax hike may also have negative effects on Dubai’s real estate sector in the long term, such as:

• Reducing the supply and liquidity of properties in Dubai, as fewer Indian buyers enter the market after July 1.

• Creating a glut of unsold properties in Dubai, as more Indian sellers try to exit the market before July 1.

• Affecting the rental income and occupancy rates of properties in Dubai, as fewer Indian tenants and tourists visit Dubai due to the higher cost of travel.

• Impacting the overall economy and growth of Dubai, which depends largely on its real estate sector for revenue and employment.

Therefore, it is clear that the upcoming increase in taxes on outward remittances from India is driving a surge in investments from India to Dubai, and that it will have significant implications for both countries. It remains to be seen how both governments and markets will respond to this change, and what will be its long-term consequences for both economies.

Dubai’s Lifestyle and Culture

Indians invested a total of US $4.32bn in real estate investments in Dubai in 2022 says ZāZEN Properties.

Besides its strategic advantages and property market, Dubai also offers a rich and diverse lifestyle and culture for Indian investors. Dubai is a city that caters to the needs and interests of different people, from business people and professionals to families and tourists. Dubai has something for everyone, whether it is entertainment, leisure, education, or health. Some of the aspects of Dubai’s lifestyle and culture that attract Indian investors are:

• The job opportunities and high salaries that Dubai offers for skilled and qualified professionals in various sectors, such as finance, technology, hospitality, and healthcare.

• The entertainment options and events that Dubai hosts throughout the year, such as concerts, festivals, sports, and exhibitions.

• The leisure activities and attractions that Dubai provides for its residents and visitors, such as shopping malls, theme parks, beaches, and museums.

• The education and health facilities that Dubai boasts of, such as international schools, universities, hospitals, and clinics.

• The cultural diversity and tolerance that Dubai exhibits, with people from over 200 nationalities living and working together in harmony.

Dubai’s lifestyle and culture appeal to Indian investors who want to enjoy a high quality of life, experience new things, and mingle with different people. Dubai is a city that celebrates its diversity and welcomes its guests with open arms.

In conclusion, Dubai is a city that continues to lure Indian investors in 2023, and for good reasons. Dubai offers strategic advantages, a booming property market, a rich lifestyle and culture, and a host of opportunities and benefits for Indian buyers. Dubai also faced a surge in investments from India, driven by the impending tax hike on foreign remittances from India, which came into effect from July 1. This tax change will have significant implications for both India and Dubai, and will affect the investment flows and the property market dynamics in both countries. Therefore, it is important for Indian investors to be aware of this change, and to act accordingly. 

If you are an Indian investor who is looking to buy property in Dubai, Zoltan Properties’ smart real estate consultation and promising projects listed in its website can help you get some really good returns on your investments. If you are an Indian investor who is curious about the portential of property investments in Dubai, write us at info@zoltanproperties.com or call on +91 8448448804, and see what we have to offer for you.

Dubai is a city that never disappoints, and that always rewards its investors. Don’t miss this chance to invest in Dubai, and to enjoy its benefits. Contact us today, and we will help you find your dream property in Dubai.

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