‘Dubai Unlocked’: Developers Reveal Strict Real Estate Sales Processes - News | Khaleej Times

Recently, the United Arab Emirates (UAE) significantly tightened the rules for investment activities in real estate, requiring real estate agents, brokers, and law firms to report cash transactions of 55,000 dirhams and above. On Wednesday, May 16, 2024, developers in Dubai stated that they adhere to "strict" protocols to exclude unjustified cash flows into their projects. Anti-money laundering and counter-terrorism financing (AML/CFT) measures have been implemented for all investors purchasing real estate in the emirates.

Developers told the Khaleej Times that they are conducting checks on real estate buyers not only due to strict compliance with laws in the UAE but also in their own interest to ensure that all investors can legally make their investments. As reported by Khaleej Times in August 2022, the UAE has been strictly monitoring real estate investments and required agents, brokers, and legal firms to report cash transactions of 55,000 dirhams and above to the UAE Financial Intelligence Unit.

According to reports published on Tuesday, the UAE has allegedly become a safe haven for some of the world's most wanted criminals, which is said to be due to the anonymity provided by the real estate sector. However, official sources from the UAE denied this information on Wednesday.

Imran Farouk, CEO of Samana Developers, confirmed that the UAE has a well-regulated real estate market and fully complies with international standards in the areas of AML and CFT.“We have implemented a compliance system for AML/CFT, and every client undergoes a verification process before being accepted on board. Cash payments are limited to 55,000 dirhams per transaction. We use specialized software to monitor and ensure compliance with AML/CFT requirements. This software fully complies with FATF standards and is designed with consideration for the National Risk Assessment and regulatory requirements of the UAE, including modules based on international best practices. It has all the necessary features to manage AML/CFT compliance obligations.”- noted Faruk.

In February 2024, the UAE received praise from the FATF governing body for being removed from the gray list, which helps strengthen the country's international image. Farhad Azizi, CEO of Azizi Developments, added that at the beginning of the process,"When the buyer signs the purchase offer, they need to provide all their documents, including copies of their passport and, if applicable, their Emirates ID. We carefully verify the buyer's personal information and their sources of funding, as well as the payment for the deposit."

Azizi emphasized that the legitimacy of the funds must be thoroughly verified.“The payment must be cleared through one of the financial institutions in the UAE before we accept it.

Madhav Dar, co-founder and COO of ZāZEN Properties, emphasized that they do not neglect buyer verification and ensure that due diligence for compliance with AML regulations is conducted before they begin closing a deal. This is very important to protect the business from potential involvement in illegal activities.

Developers in the UAE accept a variety of payment methods, including cash and cryptocurrencies.“Nevertheless, these funds must be transferred to the escrow accounts of the respective projects, which buyers can only open through financial institutions in the UAE that will conduct their own verification.”- explained Tizyan K. G. Raab, head of PR and communications at the CEO office of Azizi Developments. He added that there is no limit for purchasing real estate with cash or cryptocurrency."provided that the funds are legitimate and accepted by the relevant financial institutions."

Raab emphasized that their activities are conducted under the supervision of competent organizations, such as the Dubai Land Department and the Central Bank of the UAE, all of which ensure transparency in funding sources. Madhav Dar pointed out that they accept no more than $10,000 in cash as a down payment for a specific unit."Nevertheless, even this deposit is now most often requested in the form of a check or bank transfer, as it is simpler and more efficient. We are keeping an eye on the development of cryptocurrencies to better understand the risks, and it is unlikely that we will allow their use until there is more regulation or guidelines in the real estate sector."- he noticed.

Imran Farouk added that most investors in Samana projects prefer cash deals.“Cryptocurrencies offer convenient payment options and are quite acceptable at Samana Developer. To control and comply with regulations, we have set a limit of 55,000 dirhams per transaction.”- he said, adding that the private developer sets an internal limit on the purchase of two floors for one buyer only if they make a 30% down payment. Additionally, Samana offers no more than one floor or 10 units per client under regular deposits to minimize financial risks in case the client fails to meet their payment obligations.