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UAE depreciation rules: real estate’s tax edge

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By Shabbir Moonim, CFO, The Continental Group

UAE depreciation rules just gave real estate a quiet but valuable upgrade. For owners who elect the realisation basis—deferring tax until sale—the guidance now allows a capped annual deduction up to 4% on original cost or written-down tax value even when properties sit at fair value. That tweak won’t change the reasons to own property; it will change how the asset performs inside a tax-aware portfolio.

UAE depreciation rules: what changed

Historically, businesses faced a trade-off. If you valued property at fair value, you gained market-reflective reporting but lost depreciation. If you used historical cost, you kept depreciation but sacrificed market alignment. The new guidance removes that friction. Consequently, you can keep fair-value reporting and recognise year-on-year tax relief—while still taxing gains on realisation.

How UAE depreciation rules lift internal returns

Property isn’t judged only by appreciation. Cash flow, tax outcomes, and reinvestment capacity matter just as much. Here, the annual deduction acts like an efficiency dividend: it offsets taxable income, raises post-tax returns, and frees cash for debt reduction, maintenance capex, or growth. Even at 4%, the effect compounds across multi-year holds and multi-asset portfolios, especially where liquidity needs are modest.

Fair value plus depreciation: a cleaner model for allocators

With depreciation now available under fair value, asset allocators can compare real estate more cleanly with private equity, listed securities, and insurance portfolios. Assumptions for tax and cash flow become clearer. Moreover, fair-value carrying amounts keep balance sheets aligned with market conditions, while the deduction provides recurring relief that supports stable planning.

CFO checklist: capturing the UAE depreciation benefit

1) Confirm the realisation basis. Ensure the election is in place and tied to the relevant entities.
2) Map the cap. Model the 4% limit by asset; prioritise where cash-flow uplift is most material.
3) Align books and tax. Keep fair-value for reporting; maintain disciplined tax bases and schedules.
4) Optimise structure. Revisit SPVs, intercompany leases, and financing so deductions land against income.
5) Pre-commit reinvestment. Direct freed cash to deleveraging, resilience capex, or higher-yield opportunities.
6) Document governance. Evidence valuations, elections, and controls to reduce audit friction.

Risks and realities: keep perspective

This is a tailwind, not a thesis. Real estate remains a long-horizon asset with rate, liquidity, and operating-cost sensitivities. Tenancy quality, interest cover, and capex discipline still drive outcomes. Cross-border groups should coordinate transfer pricing and substance to avoid leakage. In short, use the rule to improve performance; don’t rely on it to create performance.

Strategic takeaway: predictability that compounds

Small, rules-based changes can meaningfully enhance strategy. The updated UAE depreciation rules convert property from a passive store of value into an active contributor to tax planning and capital management. Just as importantly, they signal policy predictability—guidance that supports investment without favouring any single structure. For owners building across decades, that predictability underpins steadier decisions, clearer reporting, and healthier reinvestment cycles.

Bottom line: Real estate still stores capital, diversifies risk, and stabilises wealth. Now, with fair-value depreciation in play, it also works harder inside the portfolio.

Check out our previous post, Wio Xero integration simplifies UAE SME accounting

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MidChains and Standard Chartered establish strategic banking partnership

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MidChains FZE, a digital asset platform licensed by the Virtual Assets Regulatory Authority (VARA) to provide broker-dealer services to retail, institutional and qualified investors, today announced a strategic banking partnership with Standard Chartered. 

Under the partnership, Standard Chartered will support MidChains with a range of banking services, including fiat settlement capabilities, segregated client money accounts, and correspondent banking. These services will power MidChains’ day-to-day operations and enable efficient settlement. 

Rola Abu Manneh

Rola Abu Manneh, Chief Executive Officer, UAE, Middle East and Pakistan, Standard Chartered, said: “The UAE has established itself as one of the world’s leading regulatory environments for digital assets and a global centre for financial activity. That creates a strong setting for regulated digital asset firms and established financial institutions to work together. Our partnership with MidChains puts that opportunity into practice, with Standard Chartered providing the banking services that support its institutional activity, including fiat settlement, segregated client money accounts and correspondent banking.” 

Basil Al Askari, Chief Executive Officer, MidChains, added: “Institutional capital moves continuously between traditional and digital markets, and the infrastructure supporting that activity must keep pace. For institutional investors, digital asset services need to connect with the banking system that supports their wider activity. Our partnership with Standard Chartered brings that connection to MidChains’ institutional services, supporting clients as capital moves between traditional and digital markets.” 

By bringing a VARA-licensed digital asset platform together with an established international bank, the partnership connects institutional digital asset activity with the banking infrastructure behind fiat settlement. It is a practical example of how the UAE’s regulated financial ecosystem can link innovation with established banking capabilities to support international business. 

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Ukrainian Business Council elects new Board to advance Ukraine–UAE trade and investment

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The Ukrainian Business Council in the UAE (UBC) elected a new Board at its General Assembly at Dubai Chamber, where members also approved a 2026–2028 strategy to strengthen trade and investment between the two countries.

Over the next three years, the Council plans to extend its trade delegation programme to new markets, deepen ties with international business councils and launch structured investment dialogues to connect UAE investors with opportunities in Ukraine. The UAE–Ukraine Comprehensive Economic Partnership Agreement (CEPA), Ukraine’s first agreement of its kind with a Gulf state, came into force in July 2026 and removes or reduces customs duties on most goods traded between the two countries.

“Ukrainian companies are achieving real results in the UAE, and we see significant untapped potential for Emirati business and investment in Ukraine. Our role is to build on this momentum: to connect the right partners, support companies at every stage of their growth and help investment flow with confidence in both directions.” commented Olena Shyrokova, President, Ukrainian Business Council in the UAE.

In 2025 and 2026, UBC led business delegations to Vienna, Qatar, Ras Al Khaimah, Fujairah, Oman and the Seychelles. It also ran webinars on UAE market entry for Ukrainian companies and business associations and supported the Ukrainian IT delegation at GITEX. Since its founding in 2016, the Council has established a dialogue with the Federation of UAE Chambers and chambers of commerce across the Emirates.

Under the new strategy, UBC will work with international business councils to give Ukrainian companies access to wider business networks in the Emirates and use the UAE as a base for trade missions to the Gulf, Asia and Africa. The Council will help Ukrainian companies in the UAE with registration, investment and expansion. It also plans to help Ukrainian investors find opportunities in the Emirates, attract Emirati investment to support Ukraine’s recovery and develop arbitration and investor protection mechanisms to build confidence in cross-border agreements.

The Council sees the strongest potential in sectors where Ukrainian strengths meet Emirati priorities: agri-food and food security, IT and digital services, renewable energy, logistics and port infrastructure, and post-war reconstruction. These are also the areas both governments have highlighted for future cooperation.

UBC works closely with the Embassy of Ukraine in the UAE and with H.E. Dr Oleksandr Balanutsa, Ambassador Extraordinary and Plenipotentiary of Ukraine to the UAE. The Council took part in the Cities Unite: Cultural and Business Exchange between the UAE and Ukraine dialogue at Expo City Dubai, initiated by H.E. Reem bint Ebrahim Al Hashimy, UAE Minister of State for International Cooperation, and the Embassy of Ukraine.

The Council will continue to support Ukrainian businesses and the wider community, helping companies expand into the UAE and encouraging UAE investment in Ukraine. Businesses, investors and potential partners interested in working with the Council can get in touch by reaching out to info@ukrainianbc.org.

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UAE primed to convert FDI inflows into economic velocity, says new report

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The UAE has built one of the world’s most successful models for attracting foreign direct investment (FDI) and is now positioned to convert that capital into lasting innovation and skill development, according to a white paper from White Paper Media Consulting (WPM), a UAE-based strategic research house that is shaping business and policy conversations in the region using credible datasets and analytical tools. 

Beyond the Numbers: The Transformative Intangible Impact of FDI argues that the real returns on FDI now lie in the intangible value it embeds within host economies, with the UAE a defining case study. The paper contends that the next phase will go beyond investment volumes, number of projects, and job creation and be measured also in patents generated, skills transferred, data ecosystems built, and clean technologies commercialized, among other things.

Official data shows that the UAE attracted more than $48.3 billion in FDI inflows in 2025, capturing 3.1% of global flows. Greenfield FDI reflected both volume and capital depth, with 1,562 projects announced for a combined $34.1 billion in capex, or 1.8% of the global total.

The country’s ability to attract investment reflects its competitiveness as a hub for operational efficiency, supply chain integration, and regional headquarters functions. The UAE has deliberately repositioned its FDI strategy toward knowledge-intensive and future-oriented sectors, recognizing that long-term competitiveness is increasingly driven by innovation, digital capabilities, and human capital. This approach aligns closely with the OECD FDI Qualities framework, with tangible examples across each dimension: including the innovation and competitiveness, digitalization and technology adoption, sustainability and clean energy investments for climate targets, and human capital and local expertise.

Drawing on the OECD framework and benchmarks from Ireland, Singapore, Israel, Costa Rica, and Malaysia, the report documents how leading economies have shifted focus from the volume of capital they attract to the long-term value it creates. In the context of UAE, this is visible in the shift in the country’s policies across phases that begin with the Foundation Phase from 1985 to 2005 of Market Liberalization and Infrastructure Creation, culminating in the current positioning as Global Capital and Technology Hub.

The shift to value in the UAE has made a huge difference to the job-creation intensity of FDI. Approximately 2,816 jobs were created in the UAE for every billion dollars received in greenfield FDI in the five years from 2019 to 2023, compared to 2,265 in the previous five years. This is higher than the OECD average of 2,318 and 1,880 respectively.

The paper identifies seven ongoing policy shifts that deepen the qualitative impact of FDI in the UAE, including extending spillovers from free zones into the mainland economy, prioritizing R&D-intensive investment, embedding skills transfer requirements in major projects, and positioning the country as a global leader in IP creation and data governance.

Yazad Darasha, co-founder and director, WPM, said: “As trusted partners of public and private sector clients, we have tracked the UAE’s investment story for years, and the pattern is unmistakable. The country has positioned itself at the front of the race for capital. What we set out to map in this paper is the harder, more valuable contest: converting investment into skills, technology, and economic velocity. It reflects what we do at White Paper Media, turning complex evidence into decisions leaders can act on.”

Dr. Joachim Arnold, CEO of OCO Global, which advises governments and businesses on attracting FDI, building competitiveness, and strengthening economic resilience, and contributed to the study, said: “The UAE’s infrastructure, free zones, and business-friendly environment helped attract companies and drive growth. The National Investment Strategy 2031 signals a more deliberate focus on investment that raises productivity and embeds benefits into the wider economy. The question is no longer only how to attract capital, but how investment creates lasting value, strengthens existing companies, and helps domestic businesses upgrade their capabilities.”

The paper highlights live examples of this transition already underway, among them the Space42 and ICEYE joint venture building satellites on UAE soil, Microsoft’s $15.2 billion investment plan with a commitment to skill one million people, and the UAE’s $30 billion pledge to the Alterra climate fund.

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