Business in Dubai

7/30/2019 Business in Dubai

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UNDERSTANDING BUSINESS IN A

CHANGING GLOBAL ENVIRONMENT

BY : DIVITA AGARWAL

ROLL NO: 26

DIVISION: A


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PROFILE

NATU DEVELOPERS PVT. LTD established in 2003 by Mr.

Gordhan Agarwal, my father in Jaipur.

VISION STATEMENT

NATU DEVELOPERS PVT. LTD is a premier builder &

developer of real estate sector in Jaipur. The company has

made significant gains and achieved its shorts team goals

and objectives. Now looking towards the future NDPL has

decided to target a large and more diversified market

segments with newer and more of real estate development

in the residential and commercial sectors.

The company wishes to forget ahead, experiment with new

ideas and challenge new frontiers. NDPL will endeavor to

achive excellence in all their undertaking and intend to

provide customer satisfaction by being efficient and

competitive.


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EXPANSION OF REAL ESTATE BUSINESS IN DUBAI

Dubai is known as a tourist hub in the entire gulf region.

Since 1990s Dubai real estate sector shows appreciating

growth. But during the previous 3 years this sector is not

enjoying favorable conditions. Yet government and other

parties are trying hard to set its track towards growth again.

Real estate businesses enjoy range of opportunities,

relaxing terms and conditions and flexible policies in Dubai.

That is why this business is alluring to the people around

the globe. There is a proper procedure of opening a real

estate business in Dubai. Lets discuss its start up rules and

regulations:

Select the form of Business:

First of all, select the form of real estate business. Mostly in

Dubai seven types of structures of organization are there to

choose from including partnership, sole proprietorship,

corporate form, partnership in commendams, joint venture

and many more. However, partnership, sole proprietorship

and corporate form are most popular in Dubai.

Selecting location of a business:

Then, select the area in which you want to open your real

estate office. You can also take the building onrent in
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Dubaifor opening up a commercial office. If it is a sole

proprietorship business, opening up office in free zone

areas is quite beneficial. Many commercial areas in Dubai

are designated free zone areas which give 100 percent

ownership to its owners. While in the rest of the regions

51% ownership is in the hands of UAE government. Other

benefits like tax exemptions and import duties exemptions

are also given to the businesses operating in free zone

areas.

Apply for the licenses:

A professional as well as a commercial license is required to

open up real estate business through RERA. Department of

economic development helps you in identifying the exact

licensing requirements as per your business needs. Also,

you need training specifically required by the RERA. You are

required to complete the course of Real estate executive

diploma course.

Register your real estate business:

Register your company by department of economic

development. Registration process requires several

documents to be filed with. As a result, an initial approval is

given to you and afterwards final approval is given on

meeting of further formalities. In the end, official

commercial license is given to you that allow you to buy and

sellDubai propertiesofficially.
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Open up a legal office:

Then obtain establishment immigration cards from the

Ministry of Labor to hire further employees in yourcompany. After meeting all these requirements you can

open up your legal business easily.

FACTORS EFFECTING DUBAI REAL ESTATE BUSINESS

ESTABLISHMENT IN DUBAI

1. The determinants of demand and supply are thosefactors within a defined real estate market that cause

demand and supply to shift and lead to price changes. The

primary determinants of real estate demand are

population, income, buyers' tastes and preferences, price

changes of other goods, the cost and availability of

financing, and the expectations of buyers about the future.

The primary determinants of real estate supply are the

costs of production inputs, cost of financing, advances in

technological know-how, and expectations regarding future

demand.

2. The demand for real estate can be boosted by

encouraging people to come to Dubai, whether as investors,

business travellers, employees, tourists, attending events

and conferences and for health and education purposes. To

do this, more liberalization and simplification of laws, rules

and measures are necessary in the following areas: (i)

immigration and residence laws and procedures (ii) labour


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laws and procedures (iii) business and commercial laws and

procedures (iv) real estate and tenancy laws and procedures

(v) administration of courts and dispensing of justice.

3. Dubai Strategic Plan (DSP), which was recently

announced by Dubai government, has projected 11 per cent

annual real GDP growth during the time frame of the

strategy 2007-2015. If Dubai long term population growth

rate of 7 per cent, which is based of its historical trend for

the last 30 years, is coupled with the DSP projected growthrate of real GDP of 11 per cent, then this gives a real per

capita income growth rate of 4 per cent during the years of

the strategy. Therefore, the past trend of per capita income

growth is expected to be sustained into the coming years.

This is good news for the real estate market. Most of this

income growth accrues to the upper and middle incomegroups who are the primary targets of the real estate

developers. Their rising purchasing power is expected to

fuel the demand for real estate.

4. The demand for real estate can be enhanced if the

availability and cost of real estate financing are further

enhanced. Further opening up and liberalization of

mortgage financing markets is expected to promote

competition in this market and therefore bring more

financial resources for lending and encourage more product

innovations that cater for the different needs of the

customers. The competition is expected to render the cost


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of financing and its conditions affordable and therefore

entice more people to be involved in the real estate market

as investors and buyers.

5. The demand for real estate can be promoted by

developing and cementing of the tastes and preferences of

the people for Dubai. This can be done through Dubai

government aggressive promotional campaigns in other

countries through its Department of Tourism and

Commercial Marketing and investment promotion agencies.Successful promotional campaigns are expected to develop

peoples tastes and preferences for Dubai and consequently

people will scramble for Dubai.

6. The credibility of the government economic polices is

extremely important because people base their

expectations about the future on those policies. Generally

speaking, Dubai government economic policies and

measures are credible and the public have faith in them.

One stark exception to this credibility is the inflation issue.

In the past, people were not confident about the official

inflation figures published by the government because they

did not reflect realities on the grounds as they saw and

experienced them daily. Buyers of real estate need to

correctly anticipate their financing cost based on inflation

figures provided by the government. To create positive

expectations that promote demand for real estate, the


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government needs to boost its economic policy credibility in

fronts such inflation, employment and economic growth.

7.The research has shown that market dynamics will taketime to adjust supply and demand. Therefore, it is expected

that it will take some time before Dubai real estate market

cools down. It is expected that the market will not cool

down before at least 5 years from now, assuming that the

government has done nothing to promote the demand and

supply of real estate. Any government policy measures thatboost the demand and supply of real estate are expected to

keep the market momentum on and push it further in time.

8. The research has shown that the real estate price has

increased by cumulative annual growth rate (CAGR) of 10

per cent in the medium term. In the long term, the price has

increased by CAGR of 4 per cent. If the government is

looking for an objective criterion for setting a rent cap, then

the 10 per cent makes a lot of sense for the medium term.

The long term real estate price increase of 4 per cent is very

consistent with some EU countries rent cap such as the

Netherlands. This means that when Dubai real estate

market becomes mature and reaches its steady state, then

the annual price increase will just be covering the inflation

rate plus a small margin as real return on real estate.

9. The research has shown that if the government would

like to keep the heat in Dubai real estate market then

demand boosting policy measures are needed. Any policy


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measures that positively influence population, income, cost

and availability of financing, buyers' tastes and preferences,

and the expectations of buyers about the future will

contribute to the increase in real estate demand.

10. The research has shown that if the government would

like to take the heat out of Dubai real estate market and

stabilize it then supply boosting policy measures are

needed. Any policy measures that positively influence the

real estate costs of production inputs, cost of financing,advances in technological know-how, and expectations

regarding future demand will contribute to the increase of

real estate supply.

11. The model research has shown that the speed of

adjustment in the real estate market (i.e. the time that themarket will take to converge to equilibrium) depends on

the competitiveness of the market. Therefore, if the

government would like the supply and demand for real

estate in Dubai to catch up relatively fast, then policy

measures that promote competition in real estate market

are needed. These policy measures are more opening up

and liberalization of real estate market, information

disclosure, flexible land and real estate regulations, and


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more liberalization of labour and capital markets, among

others


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Cluttons, buyers are gradually showing interest in this

sector as well.

The offices available for rent in Dubai offer cost savings tothe businessmen, since the prices are now declining slowly

as compared to earlier times. In comparison to the London

or New York real estate, the prices of the properties are

much more affordable in Dubai. Those who know this are

bringing their businesses to Dubai. More astute investors

are there in Dubai real estate market who look at theproperties with different angles.

Buyers now note down location, price, sense of community,

quality, architecture, internal dcor, facilities, and many

other things before purchasing a house in Dubai. Sellers in

order to create the demand of their properties are now

staging their properties to suit the needs of the buyers.

These all activities are the positive attributes of Dubai real

estate, which are making the market more mature as

compared to the earlier times.


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Documents

Business in Dubai