The Enforcement Directorate (ED) is investigating potential money laundering activities connected to real estate purchases by Indian families in Dubai. The investigation follows information from the Reserve Bank of India (RBI) and the Income Tax Department.
A surge in property purchases in Dubai, driven by attractive market offers, low repayment rates, and lucrative deals from developers, has raised concerns over possible violations of foreign currency exchange laws. The probe is focusing on various practices such as using export proceeds to purchase property abroad, investing with money received as gifts from expatriates, and engaging in hawala transactions instead of using official banking channels under the RBI’s Liberalised Remittance Scheme (LRS), which permits annual investments of up to $250,000.
The investigation also extends to individuals investing in cryptocurrency and making property payments through foreign exchanges and blockchain networks, a common practice in Dubai’s real estate market. Transactions involving loans from property sales or advances from rental income may also violate FEMA provisions. Authorities are taking action against those unable to prove the legitimate source of funds used in these purchases.
