The UAE is now among the first nations to use this technique for real estate deals incorporating virtual assets thanks to the new regulation. The following information is essential.
A new UAE order mandates that payments for real estate transactions made in the country using virtual assets, the sale of virtual assets, or cash payments over AED55,000 be subject to further reporting to the appropriate authorities.
It demonstrates how the UAE is adapting its strategy in the worldwide struggle against money laundering and terrorist financing and makes the nation one of the first nations to deploy such a system for real estate transactions involving virtual assets.
The MoE, MoJ, FIU, and other agencies including the Executive Office for Anti-Money Laundering (AML) and Countering the Financing of Terrorism participated in numerous meetings and discussions that resulted in the decision (CFT).
You Need To Know About The new Real Estate Rule In UAE:
The UAE Financial Intelligence Unit (FIU) now requires all real estate agents, brokers, and law firms to submit reports for all freehold real estate property purchase and sale transactions that use any of the three payment methods.
Here are some of the payment options:
- AED 55,000 or more in one or more cash payments
- transactions involving virtual assets
- payments made using virtual assets as the source of the transaction’s fund
The Ministry of Economy (MoE), the Ministry of Justice (MoJ), and the Financial Intelligence Unit (FIU) together announced the adoption of new reporting requirements.
The MoE, MoJ, FIU, and additional agencies including the Executive Office for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (EOAML) all participated in the decision-making process, which involved numerous meetings and debates (CFT).
According to Ali Faisal Ba’Alawi, director of the UAE Financial Intelligence Unit, “These new measures will improve the quality of financial intelligence available to the FIU and will be used to trace the suspicious movement of funds or investments as part of our fight against money laundering and terrorism financing.
Importantly, the criteria further improve the stability and integrity of the UAE’s real estate industry and offer all stakeholders with greater transparency in a sector that is a vital contributor to the UAE’s economy.
The Ministry of Economy and its associates in local, federal, and private sector entities have made adopting the highest standards of openness and governance, as well as the necessary laws to ensure economic and financial stability while combating business community fraud, a top priority.
The introduction of reporting requirements for specific real estate transactions is another illustration of how the UAE is coordinating with the private sector and other government agencies to strengthen the legal framework for fighting money laundering and terrorist financing, according to Abdullah Sultan Bin Awwad Al Nuaimi, Minister of Justice.
Obtaining and recording the identity documents of the parties to the applicable transaction should also be the responsibility of the agents, brokers, and legal firms. The laws apply to both private individuals and businesses.
The necessary private sector organizations have been made aware of the precise requirements via regulatory circulars released by the MoE and MoJ.
In order to help these parties understand the new standards and improve their familiarity with the FIU’s goAML system, the authorities are also working together to organize three separate workshops with them.
Regulation Of Real Estate Transactions
The UAE Virtual Assets Market, a recently released research by PwC, discusses the real estate industry’s vulnerabilities and how Dubai’s high-end luxury real estate market is vulnerable to money laundering threats because it has been exposed to cash transactions and has a highly internalized clientele.
In preparation for the announcement, the following is a summary of recent activities:
- Dubai’s virtual asset law will encourage cryptocurrency real estate investment, according to experts.
- When paying rent or for real estate, Nakheel accepts cryptocurrency payments.
- Using the rise of cryptocurrencies in real estate, Damac allows buyers to pay with Bitcoin and Ethereum.
Experts: Dubai’s Virtual Assets Law Will Encourage Cryptocurrency Real Estate Investment
In his capacity as Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum issued the Dubai Virtual Asset Regulation Law to protect investors and govern the virtual asset industry. Experts in the sector believe that this action is both necessary and timely to promote growth in the virtual asset sector.
Services related to virtual assets will be governed, supervised, and controlled by the recently founded Dubai Virtual Asset Regulatory Authority (VARA).
In addition to identifying certain types of virtual assets, the authority will establish the rules and controls that direct the performance of operations involving virtual assets, such as management, clearing, and settlement services.
It is a stride forward for Dubai that the law governing virtual assets has been approved and that the Dubai Virtual Assets Regulatory Authority has been established. The city continues to be on the cutting edge of new technologies and keeps pace with global development.
This will, in my opinion, have an impact on new and existing firms opening offices in Dubai, innovation, creation, and much more, demonstrating once more that Dubai’s vision is focused on the advancement of the future.
The law governing virtual assets and the new regulatory body are also anticipated to be well-received by UAE citizens and foreign investors, which will expand the Dubai real estate market.
“The real estate and vacation home industries would undoubtedly reap significant benefits. The ability to purchase real estate using cryptocurrencies will, in my opinion, attract real estate investors.
Nakheel Accepts Cryptocurrency Payments
Back in April 2022, Nakheel revealed that as a result of an exclusive agreement between the Dubai real estate juggernaut and Hayvn, a worldwide institutional digital currency platform, clients may now pay their rent, service charges, and real estate purchases using cryptocurrency.
An asset class worth $1.8 trillion is cryptocurrency. Some investors will transfer from cryptocurrency to UAE real estate when a market is opened up to investors who collectively represent $1.8 trillion.
Since the announcement of the Palm Jumeirah, this is the biggest transformation to UAE real estate. Working with Nakheel, the first developer in Dubai, shows how important it is for us to be ADGM regulated.
The ongoing transformation of real estate in the UAE is demonstrated by this exclusive cryptocurrency arrangement.
DAMAC Allows Cryptocurrency Payments In Bitcoin and Ethereum As The Use Of Cryptocurrencies In Real Estate Increases
Damac Properties of the United Arab Emirates stated in April that they would start taking Bitcoin and Ethereum as payment for real estate purchases.
Not only does Damac accept cryptocurrencies as payment, but other real estate companies do as well. The business is one of an expanding number that accepts payments in digital currency.
The organization’s initiatives for digital transformation are being led by Ali Sajwani, general manager of operations at Damac and leader of the organization’s move toward customers holding cryptocurrency. “This move toward customers holding cryptocurrency is one of our initiatives to accelerate the new economy for newer generations and for the future of our industry.
“Staying on the cutting edge of evolution is vital for multinational corporations like DAMAC. We are happy to acknowledge the value this technology delivers to our customers and are excited to be able to offer yet another transactional option.
Apart from the real estate industry, certain restaurants and other companies, including startups, have started to accept bitcoins as payment.
The real estate sector in Dubai has undergone tremendous upheaval recently. Regardless of whether real estate deals took place in a freezone or on the mainland, the FATF evaluated the real estate industry as medium-high risk.
By developing a National Action Plan to increase the efficiency of its AML/CTF system, the UAE has been focused on resolving the FAFT issues.
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