Dubai's real estate market is one of the most dynamic and lucrative in the world. The city's strategic location, excellent infrastructure, business-friendly environment, and cosmopolitan culture have made it a highly attractive destination for foreign investment and tourism.

Over the past decade, the real estate market in the emirate has experienced significant growth, with a surge in construction activity and the development of several ambitious mega-projects, and despite the economic downturn caused by Covid-19, the UAE has remained remarkably resilient and has continued to expand, with the government implementing various policies and initiatives to support growth and attract investors.

As a foreign national, you are eligible to purchase property in Dubai both as an individual and through a corporate entity. However, purchasing as a company can have certain advantages, such as the ability to take advantage of corporate tax benefits and limited liability protection. It may also be easier to manage the property as a company, particularly if you are purchasing it as part of a larger investment portfolio or as part of a commercial real estate venture.

Property ownership as a company

There are a number of reasons why a company would choose to own property in the country. The first obvious one is for operational needs. Having a stable and secure location such as manufacturing, warehousing, or office space can help a company to streamline its operations and reduce costs associated with renting or leasing property. It’s also beneficial as an investment strategy to obtain a steady source of rental income or potential capital gains through appreciation in property value over time. Property ownership also offers a level of asset protection which can be used as collateral for loans or as a tangible asset that can be sold or leveraged in the event of financial difficulties. Finally, it can promote a brand’s image and reputation which is demonstrative of a company's success and stability to clients, customers, and investors.

What types of companies can hold property in the UAE?

Property ownership in Dubai as a company depends largely on the company’s legal structure and whether the company is under local or foreign ownership.

Dubai companies wholly owned by UAE or GCC nationals are permitted to own a freehold title, long lease or usufruct right up to 99 years anywhere in Dubai. The rules for foreign owned companies are slightly different and subject to certain restrictions. Companies under foreign ownership can own property in the emirate but are restricted to certain designated areas determined by the Dubai Land Department (DLD).

The list of designated areas is long and is updated periodically by way of decrees and issuance of new regulations. However, below is a selection of the most prominent locations that foreign investors choose to buy in.

• Downtown Dubai
• The Palm Jumeirah
• Jumeirah Beach Residence (JBR)
• Jumeirah Lakes Towers (JLT)
• Business Bay
• Dubai Marina
• Arabian Ranches
• Emirates Hills

What kind of properties can a company own in the UAE?

All foreign owned companies registered with the Department of Economic Development (DED) in Dubai can own real estate within the designated areas. This includes:

• Freehold property
• Leasehold property
• Commonhold property
• Usufruct property
• Off-plan property

What types of companies can hold property in the UAE?

The following is a list of the common business structures in the UAE and the allowances they have for property ownership:

1. Free Zone Companies: Companies established in free zones such as Dubai Multi Commodities Centre (DMCC), Jebel Ali Free Zone (JAFZA), and others can own property in the free zone where they are registered and within the DLD’s designated areas. As a result of a Memorandum of Understanding (MOU) between the DLD and Abu Dhabi Global Market (ADGM), companies registered within ADGM are now also permitted to own properties in Dubai within the DLD’s designated areas.

2. Limited Liability Companies (LLCs): LLCs and other UAE onshore registered companies can own property in the designated areas. However, this doesn’t extend to companies registered onshore in foreign jurisdictions. These companies are permitted to own property in Dubai but must first establish a presence in the country through a branch or representative office and obtain the necessary licenses and permits.

3. Public Joint Stock Companies (PJSCs): PJSCs are allowed to hold property in the UAE, but they must obtain approval from the relevant authorities before doing so.

4. Real Estate Investment Trusts (REITs): REITs are a relatively new concept in the UAE, but they are becoming increasingly popular. They allow investors to invest in real estate without directly owning property, and the REIT itself holds the property assets.

5. Dubai International Financial Centre (DIFC): In order for companies registered in DIFC to purchase property outside the jurisdiction of the financial centre, they must obtain special approval from the DLD. However, it’s likely that this may change in the future to allow DIFC companies the same rights as companies registered in other free zones in the emirate. This doesn’t, however, apply to offshore companies whose shareholding is held by a DIFC entity. These companies will have full access to the DLD’s designated areas.

6. Special Purpose Vehicles (SPVs) and holding companies: SPV’s and other passive holding companies are used to separate legal and financial risk from a parent company by ring-fencing assets and liabilities. The Abu Dhabi Global Market (ADGM) has provisions for the establishment of SPVs and other holding companies which allow foreign investors to hold a variety of different property types (residential, commercial, industrial) both in Abu Dhabi and Dubai in areas that are designated for foreign ownership.

In Dubai, the property/ies must be registered with the Dubai Land Department (DLD) in the name of the ADGM entity and must comply with both ADGM regulations and UAE Real Estate Law.

7. Foundations: A foundation is a legal entity that is typically used by wealthy families and high-net-worth individuals (HNWIs) to separate their personal and commercial wealth. Whilst typically used for philanthropic purposes, they also have non-charitable applications such as wealth management, asset structuring and succession planning.

A foundation combines elements of both a company and a trust. Like a company, it has its own legal identity separate from its founder. However, it is considered an ‘orphan’ structure since it has no shareholders or members and does not issue shares or other titles of ownership, instead, it is governed in accordance with a charter and by-laws and managed by a council who are acting on behalf of the wishes of its founder.

ADGM and DIFC foundations both allow for property ownership within designated areas of Dubai and allow for the safeguarding of the foundation’s assets from forced heirship or other creditor claims.

How can PRO Partner Group help?

At PRO Partner Group, we have years of experience helping our clients with company incorporation and other investment ventures. We have direct contact with government departments throughout the UAE and can facilitate all the procedures and paperwork on your behalf.

If you need assistance with setting up a company in the UAE for the purpose of property acquisition or any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at info@propartnergroup.com or complete the contact form below and we will be delighted to assist you.