UAE Offering Choice to its Investors and Residents
The United Arab Emirates is a hotbed for trialling and adopting sustainable, innovative products and services for its growing economy. There is a consistent government drive to shift the economy from relying on fossil fuel-related businesses. Strategically this is proving to be successful. In 2021, non-oil industries contributed 72.3% of the country's national GDP.
In 2022, the government has released several changes to laws and regulations, which could culminate in a perfect storm for continued growth.
Three New Contributing Factors
Although several factors are assisting the UAE in continued growth, three come to mind and make for an interesting analysis. These include personal taxes (or lack thereof), the regulation of cryptocurrency, and positive changes in residency requirements.
Personal income taxes - zero
There is no personal income tax in the UAE, and there is no reporting obligation for individual tax residents. Thousands of expats have specifically moved to the UAE to obtain residency and enjoy a tax-free lifestyle.
It's no secret that many crypto millionaires have made Dubai their home. The city offers the "glitz and glam" if you're after, but if that's not your cup of tea, a quieter lifestyle is on offer. A safe, clean, functional society can be enjoyed by individuals and their families.
Regulating Cryptocurrency
The regulation of cryptocurrency will lure many more cryptocurrency millionaires to the UAE.
Abu Dhabi Global Markets (ADGM) free zone has issued various licenses to companies looking to offer products and services relating to cryptocurrency. Global crypto exchanges like Kraken and Binance are completing their licensing process, and several smaller businesses have been issued licenses to be offer clients products and services relating to crypto assets.
Dubai's government has approved the Virtual Assets Law and established the Dubai Virtual Assets Regulatory Authority (VARA). The licensing process is almost complete. Companies expect that they will need to show that they have anti-money laundering, disclosure, transparency, and KYC procedures in place.
One of the blockages for cryptocurrency has been the off-ramp process to convert crypto to fiat currency. Banks often block any transactions relating to crypto. The Virtual Assets Law allows for transacting back and forth between crypto and fiat in a more accessible manner. The Law will make it easier for crypto millionaires to spend their fortunes in the UAE.
New Golden Residence and Green Residence Requirements
The UAE will roll out sweeping changes to the residence requirements in the country from September. The changes aim to attract investment and talent and retain existing residents for extended periods.
The investment requirement for the Golden Residence visa via real estate has been reduced to AED2m ($545,000) and, in certain circumstances, applicants may finance the investment. The visa is valid for ten-years.
The government will introduce the five-year Green Residence for freelancers. Freelancers who can show that they have earned no less than AED 360,000 ($98,000) for the two previous years will be eligible.
Damac - Adding to the Perfect Storm
Combining the three components of the UAE above is likely to attract thousands of investors and freelancers to the UAE. Damac Luxury Property Group has further increased the allure for crypto millionaires looking for long term residence and not paying income taxes making the UAE their home.
The luxury property group announced that they would accept Bitcoin and Ethereum from investors for property purchases. If someone wants to send 13.5 BTC (today's prices) to Damac, they will be issued an AED 2m property and receive the ten-year Golden Residence permit.
However, with Decentralised Finance (Defi), a savvy crypto investor can borrow against their BTC or ETH holdings, make a Defi mortgage purchase, and pay back their Defi loan over a multi-decade period.
The UAE is providing freedom of choice or multiple choices in that manner. Specifically, in the property industry, growth rates look positive for 2022 and beyond.
Take a look at the culminating perfect storm to attract investment to the UAE:
The reduced price point to AED 2m for the Golden Residence;
Dubai and Abu Dhabi are introducing crypto regulations;
Damac allowing payment for property in crypto; and
Personal income taxes are zero.
Make an enquiry with Our Plan B, and an expert will quickly determine if you should proceed with an application.