Dubai’s dynamic real estate market is a hotspot for investors worldwide, and businesses are no exception. With its strategic location, tax-free environment, and growing economy, many companies are exploring the possibility of property ownership as part of their investment or operational strategy. But a common question arises: Can a company legally own an apartment in Dubai?

Whether your company is considering its first investment in the region or looking to expand an existing portfolio This article unpacks the legal, practical, and financial aspects of corporate property ownership in one of the world’s most sought-after real estate markets.

Regulations and legal framework for corporate property ownership in the UAE

In Dubai, the regulation of corporate property transactions is primarily managed by two key authorities: the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA). Similar entities oversee property transactions in other emirates. Ownership eligibility depends on the company’s origin and structure:

• UAE-Based Local companies can purchase property in Dubai. However, ownership rules vary depending on the company’s licensing authority and the property’s location.
• International/foreign companies are not permitted to own property.
  
  

Types of ownership

There are two main types of ownership, freehold and leasehold.

• Freehold: These are available in designated zones and are the preferred choice for companies looking for long-term investment and operational control. They grant full ownership of the property and the land it occupies.
• Leasehold: These provide the right to use the property for a specified period, typically up to 99 years. While leasehold properties are more accessible in terms of location, they come with time limitations and are subject to renewal agreements.

Types of properties businesses can own

Once the regulatory framework is understood, you can then explore the types of properties you are eligible to own. There are a wide variety of options that cater to a range of corporate needs, from residential housing like apartments and villas to commercial and mixed-use developments in business hubs such as DIFC or JLT.

This allows you to align your investments with your operational goals, whether providing employee housing, diversifying an asset portfolio, or establishing a commercial base.

Benefits of corporate property ownership

Beyond the immediate utility of owning real estate, companies can leverage significant financial and strategic benefits.

Tax Efficiency

One of the UAE’s most appealing aspects is its tax-friendly environment. The UAE does not levy capital gains tax on individuals, and property tax is not applicable to real estate investments. However, businesses earning capital gains may be subject to corporate tax. These tax efficiencies translate into lower operational costs and higher net gains over time.

Asset Protection

Properties purchased through a corporate structure, such as a holding company in a free zone like DIFC or RAKICC, benefit from enhanced legal protections, including shielding the asset from personal liabilities or disputes. Additionally, Dubai’s transparent legal framework and secure property registration system ensure clear ownership rights.

Strategic Location

Dubai’s position as a global business hub adds another layer of value to corporate property ownership. With world-class infrastructure, extensive transport links, and a central location connecting Asia, Europe, and Africa, the emirate offers unparalleled connectivity for businesses operating on a global scale.

Costs and Challenges

While the benefits of corporate property ownership in Dubai are significant, it’s important to also account for other associated costs. These include Dubai Land Department (DLD) fees, typically 4% of the property value, as well as transfer fees and agency commissions, which usually amount to around 2%.

Maintenance fees and service charges should also be factored in and can vary depending on the type of property and its location. Additionally, if you lack the resources to handle day-to-day operations in-house, you may need to consider property management services.

Practical steps

Once you understand the opportunities and challenges of property ownership in Dubai, the next step is navigating the process itself.

The first step is determining the most suitable corporate structure. Many companies opt to establish a property holding entity within a free zone, such as JAFZA, RAKICC, DIFC or ADGM, or as an onshore entity. Free zones often provide added benefits like 100% foreign ownership and simplified regulations, making them a popular choice for international businesses.

Documents required

You’ll typically need to provide:

• A valid trade licence or free zone licence.
• Company registration documents (e.g., Articles of Association, Memorandum of Association).
• Proof of authorised signatories, often verified by a corporate resolution.
• Identification documents for the company’s representatives involved in the transaction.
• Certificate of Good Standing
• Certificate of Incumbency
• No Objection Certificate
  

Ensuring these documents are complete and accurate can significantly streamline the purchasing process.

How can Sovereign PPG assist?

Given the complexities of corporate property ownership, businesses are strongly advised to engage a professional who can provide guidance on structuring the transaction, navigating regulatory requirements, and optimising financial strategies.

Sovereign PPG has extensive expertise in corporate property ownership and company structuring in the UAE. With close connections to government departments and free zone authorities, we can simplify the process for businesses, from setting up property holding entities to ensuring compliance with all legal requirements.

If you need assistance with corporate property ownership in Dubai or the wider UAE, company setup, restructuring, or PRO services, contact us at +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi. Alternatively, email us at dubai@SovereignGroup.com or complete the contact form below, and we’ll be delighted to assist you.