Real Estate Investors and Law Firms in UAE Must Report Cash Deals Worth Dh55k and above: Details Inside

Real Estate Investors and Law Firms in UAE Must Report Cash Deals Worth Dh55k and above: Details Inside

As per the latest report circulated recently in the UAE, it is stated that the property agents, brokers as well as all law firms must report cash transactions worth Dh55,000 and above to the UAE’s Financial Intelligence Unit. The Ministry of Economy (MoE) and the Ministry of Justice (MoJ) have developed this new criterion in collaboration with the UAE’s Financial Intelligence Unit (FIU).

 

Why is this new regulation in the UAE real estate market introduced recently?

UAE has finally tightened the policies and regulations of real estate investment to strengthen its regulatory framework. This is done keeping two chief factors in mind- one is to troubleshoot anti-money laundering and second, countering the arrangement of money for terrorism.

 

According to Abdulla bin Touq Al Marri, minister of economy, the adoption of the highest standards of governance and transparency, as well as the necessary laws to guarantee economic and financial stability and combat business community fraud, are all top priorities for the ministry and its associates in the local, federal, and private sectors. According to Al Marri, "the new requirements, with regard to the reporting rules of both the real estate and legal sectors, ensure the development of their regulatory frameworks, leaving little to no room for manipulation or illegal practices that could adversely impact the work environment, the economy, and investment within these sectors."

 

 

According to this new regulation, real estate agents, brokers and law firms are subjected to report the cash transactions for the following methods of payments (that is applicable for the payment of any portion or the whole property value)

 

1)Single or multiple cash payments of Dh55,000 and above virtual asset related payments

2)And, the payments that are derived from any virtual assets

 

Who is obliged to follow this payment transaction guideline?

 

Both individuals and business entities that are involved in the aforementioned real estate transactions are subject to the restrictions. The new rule is also applicable to the legal and real estate industries.

 

What are experts’ opinions on this?

However, experts believe that this latest upgradation of the real estate rule may bring significant many unpleasant scenarios in the UAE real estate market, resulting in a slowdown in the economy since UAE's 55% of overall GDP is heavily dependent on the real estate industry. 

 

According to Saad Maniar, senior partner at Crowe, real estate is one of the main drivers of economic growth and the most recent action may result in a brief slowdown, which is necessary at the moment to manage inflation. He added that the new rule will assist prevent fraud and guarantee long-term sustainable growth at the same time.

 

Maniar stated to Khaleej Times on Monday that "with such a decision, the UAE raises the threshold of regulatory compliance and it is a step in the correct path to strengthen the stability of the financial sector."

 

Abdullah Sultan bin Awwad Al Nuaimi, Minister of Justice added "The UAE is able to act quickly to protect the economy from known and developing threats by working closely together to establish a clear regulatory framework and effective reporting tools".

 

Final Words

If you run a corporate company or a business, it’s high time you are aware of the new reporting rules of UAE cash transactions. We can help you with it!

 

Schedule a consultation with one of our business consultants to stay in compliance with the cash transactions guidelines of the UAE Government.

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