Last week, viral on social media that over 300 Malaysians are property owner in Dubai, including on the the David Beckham associated Palm Jumeirah artificial islands and on the world’s tallest structure, Burj Al Khalifa.
It was a report by Dubai Unlocked, an investigative project involving 70 global news groups including our local Malaysiakini.
According to The Sun report, “it is learnt from the 500 properties linked to Malaysians, more than 300 are classified as residential properties by economists at the EU Tax Observatory and Norway’s Centre for Tax Research, who worked on the leaked data separately.
“Furthermore, economists reportedly estimated the residential properties owned by Malaysians alone as per the leaked data would be worth US$160.9 million (RM710 million) in 2022” and “Malaysian-owned residential properties are worth a total of US$320 million (RM1.5 billion) city-wide.”
Dubai Unlocked Looks Into Property Ownership, Local Report Says Malaysians Too Love Buying Properties There
Dubai Unlocked, an investigative project involving more than 70 media outlets globally, looked into property ownership in Dubai and alleged that many people worldwide who own properties in Dubai are shady characters.
Moreover, Dubai has no personal income tax for gains from the digital currency exchange for residents such as cryptocurrency. In Malaysia, one can be taxed up to 30% for the same thing.
Since they do not have to pay income tax, it was said that some individuals began declaring all their financial activities there despite their expenses being tracked.
They can convert their digital currency into fiat money tax-free and invest in anything they want. This loophole lets unsavoury characters exploit it to make more money and live luxuriously without fearing authorities.
*Fiat money is a government-issued currency that is not tied to a commodity like gold.
These alleged criminals do not conduct violent crimes in Dubai but launder money instead. Think of it like a retirement home for criminals.
Many Malaysians own properties in Dubai too
Malaysiakini, one of the many media outlets working on Dubai Unlocked, reported that more than 300 Malaysians are listed as property owners in Dubai.
The leaked data showed that 342 Malaysians owned a total of 548 units in Dubai in 2020 and 2022 with an estimated total value of RM1.24 billion (US$262,398,932).
The properties linked to Malaysian owners are within the Burj Khalifa and the Palm Jumeirah areas.
The properties in the Burj Khalifa area include Burj Vista Tower 1, The Address Residences Dubai Opera T2, Vision Tower 1, and South Ridge-Podium Villas East.
Each building has an estimated value between US$1.4 million to US$1.7 million per unit. However, Vision Tower 1 is the most expensive, ranging from US$7.2 million to US$7.5 million per unit.
Over at the Palm Jumeirah area, the buildings included are Balqis Residence 3, Marina Apartments 6, The Palm Tower, Golden Mile 9, Five at Palm Jumeirah Dubai, and The Residence North.
Each building has an estimated value between US$0.5 million to 1.2 million per unit except The Residence North which has an estimated value of US$2.8 million per unit.
Malaysiakini said at least six properties linked to Malaysians are located on the iconic Palm Jumeirah artificial islands. The Beckhams and Indian celebrity Shah Rukh Khan are said to own holiday homes there too.
Malaysiakini is withholding the identities of these notable owners pending their comments and has independently verified some of the leaked data by corroborating it with official government records and other sources.
These notable individuals were prominent business owners or corporate players. However, no politicians or their known proxies were found in the list.
Roughly two-thirds of Malaysian property owners have an Emirates ID, suggesting that they’re likely UAE residents in some capacity.
It’s not revealed if all Malaysian owners are wanted for crime but Dubai Unlocked’s FAQ stated that reporters omitted including celebrities and other private individuals who are found not to have links with any criminal activities.
A check on the database revealed that Malaysia is not listed under the “Region” category.
Checks found most of the notable individuals were prominent business owners or corporate players, while no politician, or their known proxy, was found in the list.
Of the 500 properties linked to Malaysians, more than 300 are classified as residential properties by economists at the EU Tax Observatory and Norway’s Centre for Tax Research, who worked on the leaked data separately.
From there, the economists estimated that Malaysian-owned residential properties covered in the leaked data would be worth US$160.9 million (RM710 million) in 2022.
Their analysis omitted non-residential properties such as shops, offices and labour camps, due to data quality concerns for non-residential properties.
Further, when other properties not included in the leaked data are considered, the economists estimated that Malaysian-owned residential properties are worth a total of US$320 million (RM1.5 billion) city-wide.
They arrived at this estimate by complementing the leaked data with a variety of confidential and open sources.
If the report is not alarming enough, Asia News Network taken from Star Online reported Dubai is merely a preferred hideout for Malaysian money launderers to stash their money, but the home for terrorist financiers, drug lords and kleptocrats.
According to a Malaysian taxation lawyer, who chose to remain anonymous, many opt for the Middle East destination because Dubai residents can convert digital currency into fiat currency tax-free, allowing individuals to then invest in their desired real-world assets.
“Dubai has no personal income tax while in Malaysia, one can be taxed up to 30 percent on the gains from the digital currency exchange.
“Due to the absence of personal income tax in Dubai, individuals have begun declaring all their financial activities there, despite their expenses being tracked,” he said.
This loophole is an attractive channel for hiding laundered illicit funds, with minimal accountability.
While Dubai’s zero income tax deal is only available to residents, resident status can be easily obtained through setting up businesses there, via agents.
“One can obscure the illicit origins of their money by initially laundering it through cash-based businesses and services.
“The money is then converted into cryptocurrency through a Dubai-based exchange and finally exchanged for cash and fiat in Dubai.
“People prefer to use Dubai for exchanging cryptocurrency because Dubai has licences and regulations in place for such transactions, making it easier and potentially more profitable,” he explained.
In Malaysia, capital gains from cryptocurrency are not taxed, however, revenue gains from selling digital currency are.
This means that if someone trades cryptocurrencies regularly, they will be taxed on the profits. However, if cryptocurrency units are purchased as an investment, held onto for a while, and then sold, there is no tax on the profits made from this disposal.
Pandora Paper created quite a commotion in Malaysia with Tun Daim and wife Toh Puan Naemah flogging the headlines at only the initial stage of his investigation. Will Dubai Unlocked promises to be more alarming?
Source : Thick Brick Blogspot
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