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Dubai continues to attract FDI by fully complying with ESR and AML regulations

Author: Zayd Maniar, Crowe UAE

Published: 15 Mar 2021

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Dubai continues to attract FDI (Foreign Direct Investment) in all strategic sectors and was recently ranked 3rd after Singapore and London in the latest Global Cities of the Future list. Real Estate, especially in the Travel, Tourism, and Hospitality sector has experienced an uptick in investors during Q1 2021. A steady supply of villas and homes makes it an attractive investment for the Holiday Let industry.

Attracting FDI is a one of the main economic stimulators for Dubai given its minimal dependency on Oil. The large flow of investment funds means Global regulators expect greater compliance. The UAE Government has implemented a series of measures which help them comply with ESR (Economic Substance Regulations) and AML (Anti Money Laundering) initiatives of the OECD and other regulating bodies.

Compliance with global regulations promote Dubai as a haven for investment funds. Investors are bullish on post Expo 2020 tourism. The luxury beach hotel sector in Dubai continues to be in strong demand, as hotels focus on occupancy at the expense of short-term ADR (Average Daily Rate).

I had a virtual coffee with a General Manager at a local 4-star hotel. He commented they continue to receive interest for managing properties acquired by European and US investors, especially REITs (Real Estate Investment Trusts). Evidenced by the recent acquisition of Dubai's Address Sky View Hotel, which was owned by a subsidiary of Emaar Properties by Evergreen Hospitality in a deal worth $204 million. “They are after something unique and Dubai can offer that”, he said.

*The views expressed are the author’s and not ICAEW