Starting a Real Estate Business in the UAE
The real estate sector in the UAE has long attracted developers, construction companies, investors and brokers (or agents) looking to invest in the region. This week sees the return of Cityscape Dubai, the region’s largest Real Estate Expo, with over 300 exhibitors and 10,000 expected visitors per day ranging from brokers, to developers, to end-users hungry to snap up a discount. Flagship projects announced at the event include the $2.2bn expansion planned for Dubai’s vibrant Motor City district, and Aldar’s new $2.4bn project ‘Waters Edge’ in Abu Dhabi, of which phase 1 sold out in its entirety. Demand for Real Estate in the region continues and with it, demand for professional companies to market and promote the opportunities which abound.
PRO Partner Group explains some of the considerations and steps necessary to set up a real estate business in the UAE.
Plan your real estate business type and legal structure
Firstly it is important to define the exact type of commercial activity that will be undertaken. There are several activities a real estate company could be involved in, from real estate agency, developer, broker, or auctioneer to property management and leasing. Each requires different business models, levels of investment and legal prerequisites.
For example, if you are looking to set up a brokerage (or agency) in Dubai, which either sells or leases property, there are only two types of legal structure than can be registered – a Sole Establishment or a Limited Liability Company – and the business must be wholly owned by a UAE national.
The main legal structures for other business types are:
- an establishment (owned by one person),
- a limited liability company or LLC (owned by two or more people), or
- a branch of a foreign company.
If you decided that an establishment or an LLC works best, you will need an Emirati national as a partner or sponsor in order to register the business. It is important to note that whilst 51% of the shares need to be in the hands of nationals, this does not mean that the same proportion of profits must follow. An agreement with local partners beforehand can ensure that you still retain the majority of your profits.
Register a trade name for your real estate business
Once a legal structure for your real estate venture is confirmed you must then register a trade name. There are several local requirements and constraints to setting up your trade name (see PRO PARTNER Blog on TRADE NAMES). In general, the trade name must relate to the nature of the activity the business will undertake and its legal form. For example, you may consider using terms such as ‘real estate’, ‘broker’ or ‘developer’ in your business name if these are the activities your business undertakes. Trade names can be reserved by contacting the Department of Economic Development in the emirate in which your business will operate.
Obtain approvals, undertake real estate training and the final license
Once you obtain a trade name certificate, you can start the approval process. Getting the Initial Approval will then allow you to apply for further authorization from RERA in Dubai or the Department of Municipal Affairs in Abu Dhabi.
In both Dubai and Abu Dhabi, it is now a requirement that property professionals undertake training and obtain a Government permit from the Department of Municipal Affairs in Abu Dhabi or the Real Estate Regulatory Agency in Dubai.
The last step in the process is to submit all required documentation to the Department of Economic Development, who will then issue the final license.
Consider a local partner for advice, guidance and networking
There are many steps within this business set up process and a clear understanding of your particular business model will save time and money. Finding the right local advice can save an enormous amount of time, money and stress.
PRO Partner Group can help you in each step of this set up process – from working out the right business model to finding a local partner and obtaining the correct licenses and permits.
How to get started
The first step to setting up any business in the UAE including one based in the property or real estate sector is to do some market research.
A great place to start is to link up with other people in the real estate or property industry who can give you essential feedback on your ideas, their feasibility and the industry in general. Obtain industry reports, monitor local newspapers and consider attending an industry conference or exhibition (see our Conference Blog). A lot of information can be obtained on-line, but make sure you verify this with a trusted local contact such as PRO Partner Group.
Start to develop a business and marketing plan, taking into consideration realistic costs and timeframes. And talk to an expert in the region who has in-depth knowledge on how to set up a business in real estate. They can give you a realistic perspective on setting up a business in the Gulf.
The experts at PRO Partner Group have formed over 300 Limited Liability Companies, Representative Offices and Branch Offices and specialise in providing foreign investors with advice on the most efficient and profitable way to set up your business in Dubai, Abu Dhabi or Oman.
Greg Hastings is Business Development Manager of PRO Partner Group. PRO Partner Group specialises in providing foreign investors with a seamless and financially efficient means to setting up a profitable business presence in Abu Dhabi, Dubai, the wider UAE and Oman. Contact Greg direct on firstname.lastname@example.org or call a member of the team on:
T: +971 (0)4 456 1761 (Dubai)
T: +971 (0)2 448 5120 (Abu Dhabi)
Starting a #RealEstate Business in the UAE. Plan your real estate business type and #Legal structure #Brokerage #Agency #Property #Leasing #Lease #Developer #TradeName #LocalPartner #Investment #Investors #OfficeSpace #Gulf #MiddleEast #Dubai #AbuDhabi https://t.co/8utH1yGNG6
— PRO Partner Group (@PROPartnerGroup) August 14, 2018