Money Laundering Fears Linked to Abu Dhabi Real Estate Boom: Bloomberg

The growing interest of foreign investors in Abu Dhabi’s real estate market has sparked debates and raised suspicions of money laundering, given the UAE’s controversial history of facilitating fraud, supporting terrorism, and attracting corrupt individuals.

According to Bloomberg, Aldar Properties, Abu Dhabi’s largest real estate developer, has seen soaring demand for homes, driven primarily by international buyers. Mohammed Al Mubarak, Aldar’s chairman, stated that the company increased its annual project launches from two in 2008 to 14 in 2023, with foreign buyers now accounting for 30% of purchases, up from 11% in 2021.

To attract expatriates and boost tourism, Abu Dhabi has committed $10 billion to initiatives such as new museums, luxury developments, and cultural attractions. These efforts aim to diversify the economy and draw global financial institutions to the emirate.

Abu Dhabi is also expanding its hospitality sector, planning to add 20,000 hotel rooms over the next five years to meet increasing tourism demand. Projects like the planned “Sphere” hall, inspired by Las Vegas’ immersive venue, showcase the city’s ambitions.

The UAE’s appeal to millionaires stems from lenient financial regulations, tax-free policies, and long-term residency options. However, critics argue that these factors have made it a hub for illicit financial activities, particularly in real estate and other luxury sectors.

Reports highlight that the UAE continues to attract wealthy individuals, including those linked to corruption or tax evasion. The nation has faced scrutiny for enabling sanctioned individuals to safeguard assets through shadow companies. Its placement on the global financial regulator’s grey list underscores its deficiencies in tackling money laundering and terrorism financing.