Although South Asians have an increased risk to develop diabetes, data on the difference in development and progression of diabetic nephropathy between ethnic groups are not consistent. The aim of this study was to evaluate possible differences in the development and progression of albuminuria in South Asians and Western Europeans (WE) with type 2 diabetes in a large closed cohort of South Asians with type 2 diabetes. Data on 1269 South Asians and 2272 Dutch adults with type 2 diabetes who were treated in our diabetes clinic in 2006 or referred thereafter were extracted from electronic medical records. Microalbuminuria and macroalbuminuria were defined separately for men and women based on albumin/creatinine ratios in early morning urine samples. We defined 3 outcomes: (1) no albuminuria, (2) persistent microalbuminuria and (3) macroalbuminuria at the end of follow-up. Cox proportional hazard models were used to discriminate differences in time from diabetes diagnosis until development and progression of albuminuria between the two ethnic groups, adjusted for retinopathy, hypertension, smoking and age at diabetes diagnosis. South Asians have a higher adjusted risk for developing microalbuminuria: HR 1.4, (95% CI 1.2, 1.6) and macroalbuminuria: HR: 1.2 (1.0, 1.4) compared to Western Europeans. However, mean time to progress from micro- to macroalbuminuria was not different between the ethnic groups (3.9 ± 4.0 yrs vs. 3.4 ± 3.9 yrs respectively). South Asians have a higher adjusted risk to develop micro- and macroalbuminuria compared with Western Europeans. When microalbuminuria is present, time to progression from micro- to macroalbuminuria is not different between the two groups.