International Investment

INVESTING IN DUBAI
FROM BELGIUM

A TOP BELGIAN INVESTOR DESTINATION

Dubai continues to lead as one of the fastest-growing luxury real estate markets, outpacing main competitors like London, New York, and Paris. Its economy is also on a similar trajectory, attracting global investors with its diverse and flourishing business landscape. As a result, Belgian investment activity in this Emirati city is on the rise with no signs of slowing down. 

Belgium is known for its prosperous economy and high-income citizens. However, with near stagnant real estate growth rates and modest rental yields, Belgian investors are looking elsewhere for potentially better markets to invest in. Dubai perfectly meets the criteria with its strategic location, strong economy, and unrivalled property market growth. 

PROPERTY MARKET COMPARISONS BETWEEN DUBAI AND BELGIUM

Before getting drawn to the allure of Dubai’s booming property market, Belgian investors must compare several factors to ensure the viability of their investments. 

Real Estate Performance

Belgium’s minimal nominal increase of 1.7% in Q1 2024 certainly appears positive, but this translates to just 0.6% when accounting for inflation. While Brussel’s property performance has remained stable, areas like Flanders and Wallonia saw drops of 8% and 6.5%, respectively. 

In contrast, Dubai’s property prices experienced a year-on-year increase of 20.07%. Sales transactions also saw significant progress, increasing by 44.3% annually. This growth can be attributed to the addition of thousands of new units and the launch of numerous off-plan projects, driving prices upward.

Overall, Belgians investing in local property should not expect significant value appreciation anytime soon.  Dubai, in comparison, presents a better opportunity for capital growth, with past and current data indicating a strong upward trend.

Rental Yields

Belgian investors can expect rental yields of 4.20%, with Brussels being on the higher end at 5.54%. While respectable, these figures are below Dubai’s average of 6.05%.

Furthermore, areas like Al Furjan and Jumeirah Village Circle offer even higher yields, up to 9.21% and 8.08%, respectively. Just note that property type also is key, with apartments typically offering better rental yields but less capital appreciation potential compared to villas.

Average Property Prices

Belgium’s median property price per square metre in 2024 is €3,466, making it a relatively affordable investor market.

Dubai, meanwhile, has a median property price per square metre of €3,973, making it slightly more expensive than Belgium. However, Dubai’s higher growth potential, luxury amenities, and tax-free environment help to justify its slightly higher prices. 

Return On Investment (ROI)

Dubai’s property ROI of 8-15% currently ranks it as one of the top cities worldwide. Achievements like this, among many others, help put Dubai on the map as one of the most sought-after investment spots globally.

Belgium is seen as a stable, long-term investment, yielding a return of 3.6% per annum. However, compared to Dubai or its other European counterparts, such as Germany, Spain, and Portugal, it may be best to wait until the market picks up.

As of today, Dubai is considered a more attractive investment destination than Belgium, with higher ROI potential and steady growth.

STRONG ECONOMIC AND INVESTMENT TIES BETWEEN DUBAI AND BELGIUM

Impressive Growth In Trade

Dubai and Belgium’s economic relationship is highly diverse, leading to improved cooperation across several sectors.

In 2022, the UAE’s total exports to Belgium were valued at $2.58 billion, including high-value products such as diamonds, hot-rolled iron bars, and gold. This trade emphasises quality over quantity, reflecting the premium nature of its exports.

Belgium’s exports to the UAE were valued at $3.69 billion in 2017, with diamonds, gold, and packaged medicaments being the leading commodities. This trading relation, between 1999 to 2017, grew at an annualised rate of 51.5%. Meanwhile, UAE’s exports to Belgium surged at an annualised rate of 80.9% from $133 million in 2017 to $2.58 billion in 2022.

These trades boost Belgium buyer confidence by knowing their home country is directly involved in Dubai’s economic prosperity and stability.

Local Support From The Belgian Business Council

Investors looking to set up in Dubai won’t have to navigate the market alone.

Thanks to the Belgian Business Council in Dubai, Belgian companies can seamlessly set up their organisations in the city. It aims to support and guide Belgian investors in the UAE, helping them understand its local regulations and market. They also organise networking events and conferences, providing opportunities for Belgian companies to connect with potential business partners in Dubai.

Additionally, approximately 3,600 Belgians live in the UAE, with most in Dubai. As such, guidance from fellow co-nationals can also be sought, allowing for a more seamless transition into the country.

Belgium’s Role In Dubai’s Sustainability Efforts

2023 was the year of sustainability for the UAE, making Belgium’s presence at major events such as COP28 even more important.

One notable Belgian contribution is the BESIX Group’s involvement in constructing the world’s largest energy-from-waste plant in Dubai. Partnering with Hitachi Zosen Inova, this joint venture will process 1,825,000 tons of municipal solid waste each year, transforming it into renewable energy to power roughly 120,000 homes. Situated at the Warsan landfill site, this facility will significantly cut down on landfill waste while promoting alternative energy sources.

These Belgian efforts, along with successful ongoing trade relations between the two countries, further solidify Belgium’s position as a key player in Dubai and the wider region.

TAX BENEFITS FOR BELGIAN PROPERTY BUYERS

If no capital gains, income, or property tax sounds too good to be true, welcome to Dubai. As a tax-free haven, Dubai property investors are maximising their returns with minimal tax obligations. This is especially enticing for Belgian investors who routinely pay the following:

  • Progressive income tax rates ranging from 25-50%
  • Capital gains tax of 16.5% for properties held for less than five years
  • Annual property tax based on cadastral income, with effective rates significantly increased by municipal surcharges and more

Dubai’s tax-free status, meaning no income tax and no capital gains tax, gives Belgian investors a significant advantage. This incentive has resulted in an ever-increasing number of foreign nationals investing in the Dubai property market. 

HOW DUBAI PROTECTS FOREIGN INVESTORS

Dubai’s real estate market has matured significantly in the last 20 years. Now, the city has a regulatory framework that protects investors, ensures transparency, and reduces risks.

Belgian investors can own property in designated freehold areas, as long as they’re overseen by the Dubai Land Department (DLD). Furthermore, buyers have access to title deeds and property records, ensuring that their investments are legitimate.

With stricter rules on developers from ‘The Real Estate Regulatory Agency’ (RERA), Belgian property investors have never been in a better position. One rule states that property purchases require large upfront payments (30% to 50% of the property value), helping to prevent residential flipping. This also helps to promote market stability and long-term investment, ensuring a more secure and sustainable real estate environment for all investors.  

VISA OPPORTUNITIES THAT FAVOUR BELGIAN INVESTORS

The Golden Visa Program is, as its name implies, a prestigious visa that opens the doors of Dubai to Belgian property investors.

This visa grants residents a 10-year residency in the UAE as long as they invest in property (off-plan, completed, or mortgaged) worth at least AED 2 million (€508,874). Furthermore, recent amendments no longer require investors to put a minimum down payment of AED 1 million – great news for newer, more budget-conscious Belgian investors.

Additionally, investors aren’t limited to seeking out just the Golden Visa Program. They can also apply for the UAE’s Green and Blue Visas, which offer 5-year and 10-year residency options, respectively. However, both require different investment criteria which aren’t involved in property ownership.

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