Dubai has emerged as a preferred real estate destination for Indian investors, offering high rental yields, zero property tax, luxury living, and long-term residency benefits. But before you finalize your purchase, there’s one key step that requires special attention — legally transferring funds from India to Dubai.

With the right understanding of the Reserve Bank of India’s (RBI) regulations, documentation, and banking procedures, you can ensure a smooth, transparent, and fully legal money transfer for your Dubai property investment. In this blog, we’ll walk you through everything Indian investors need to know about sending money overseas for buying property in the UAE.

Step 1: Understand the Legal Route – LRS (Liberalised Remittance Scheme)

Indian citizens can legally remit money abroad under the Liberalised Remittance Scheme (LRS) of the Reserve Bank of India. Under this scheme:

• Every individual (resident Indian) is allowed to send up to USD 250,000 per financial year (April to March) for permissible transactions.
  
• Buying immovable property abroad — such as apartments or villas in Dubai — is one of the approved purposes.
  
• This limit is per individual, meaning a family of four can collectively remit USD 1 million per year, if needed.
  

For most Dubai property transactions, especially off-plan units or mid-range apartments, this limit is sufficient when paired with smart planning.

Step 2: Choose the Right Mode of Transfer

The most common and legal way to transfer funds is through your authorized Indian bank under the LRS route. You must:

• Approach your bank (where you hold a savings or NRE/NRO account).
  
• Fill the Form A2 and a declaration for LRS remittance purpose.
  
• Provide KYC documents like PAN card, passport, and property-related documents from Dubai (such as sale agreement or booking form).
  
• Specify the exact reason: “Remittance for purchase of immovable property outside India.”
  

The bank will convert your INR to AED or USD and wire it directly to the developer or escrow account in Dubai. This ensures complete transparency.

Step 3: Plan Ahead – Use Multiple Family Members if Needed

If the property value exceeds USD 250,000 (approx. AED 918,000 or ₹2.1 crore), you can involve spouse or adult children who are also Indian residents.

Here’s how:

• Each person can independently remit USD 250,000.
  
• All individuals must be joint buyers or co-owners of the property.
  
• Payments must be made from their respective bank accounts, with proper declarations.
  

Many Indian investors use this strategy to legally invest in higher-value Dubai properties without violating LRS limits.

Step 4: Stay Compliant with FEMA and RBI Rules

There are a few important rules you must follow when remitting funds for foreign property purchase:

• The funds must be from your own income or savings (not borrowed from others or taken as loans in India).
  
• You must use formal banking channels—never attempt to transfer funds through informal or third-party accounts (also known as “hawala”).
  
• Property must be for residential or investment purposes. Commercial real estate investments may require additional approvals or structuring.
  

Non-compliance can attract penalties under FEMA (Foreign Exchange Management Act), so always stick to RBI-approved processes.

Step 5: Documentation You’ll Need

When initiating the transfer, your Indian bank will typically require the following:

• Form A2 and LRS declaration
  
• PAN card
  
• Passport copy
  
• Invoice or sale agreement from the Dubai developer
  
• Bank details of the Dubai beneficiary (escrow account or seller’s account)
  
• Property brochures or proof of booking (optional, but helpful)
  

Ensure all documents are accurate and match your identity to avoid transfer delays.

Step 6: Receive Proof of Transfer and Update Dubai Developer

Once your bank completes the wire transfer, you’ll receive:

• SWIFT transaction confirmation
  
• Proof of remittance from your bank
  
• Forex rate and charges summary
  

Share these documents with your Dubai property developer or broker, who will update your payment records and issue a payment receipt.

Optional: Use NRE/NRO Accounts (For NRIs)

If you are an NRI, you can also invest in Dubai using your NRE or NRO account. However:

• NRE accounts allow repatriation of funds abroad without any tax.
  
• NRO accounts are non-repatriable, and remittance is subject to TDS and RBI approvals above certain thresholds.
  

If you’re a returning Indian or NRI resident now settled in India, it’s advisable to shift funds to your Indian savings account and remit under the LRS route.

Common Mistakes to Avoid

1. Using third-party or broker accounts – Always transfer directly to the developer’s or escrow account.
   
2. Missing LRS declaration – This can delay or block your transaction.
   
3. Underreporting remittances – All foreign investments must be reported in your Income Tax Return (ITR).
   
4. Not consulting your CA or tax advisor – Especially if you plan to sell later and repatriate gains back to India.
   

Final Thoughts: Legality Brings Peace of Mind

Transferring funds from India to Dubai for real estate is not only legal — it’s straightforward when done correctly. Thanks to the Liberalised Remittance Scheme and clear RBI rules, Indian investors can confidently build their Dubai property portfolio while staying compliant with Indian laws.

Work with a reputed Dubai real estate advisor who understands the Indian banking and tax system, and always use official channels to protect your wealth and your peace of mind.

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