Dubai’s real estate market is a thriving ecosystem of opportunity for individuals and businesses alike. As the UAE’s economy expands and regulations evolve, one intriguing question often arises: Can a company own an apartment in Dubai? Whether for employee accommodation, corporate investment, or strategic asset management, businesses are exploring the possibility of adding real estate to their portfolios.
Traditionally, property ownership in Dubai was primarily limited to individuals and UAE nationals. However, the rules have shifted, with freehold areas opening up to foreign investors and companies. Today, companies – whether local or international – can, under certain conditions, own residential properties in Dubai. However, as with any major investment, understanding the nuances, legal frameworks, and potential restrictions is crucial.
This blog explores the rules around company property ownership in Dubai, describing the steps required and the benefits of owning an apartment through a company. From types of property ownership for companies to key restrictions and regulations, we’ll provide a roadmap for business owners keen on investing in Dubai’s booming real estate market.
So, whether your company is looking to provide housing perks for employees, secure rental income, or diversify its asset base, this guide covers all the ground. Read on to find out if corporate ownership of residential apartments in Dubai is the next smart move for your business.
Can a company own an apartment in Dubai?
The UAE’s regulatory framework has become increasingly accommodating to corporate investors, making Dubai a hub for local and international businesses keen on tapping into its real estate market. However, understanding the rules around company ownership of apartments is essential to ensure compliance and maximise returns. Here’s a breakdown of what companies need to know:
Property ownership rules for companies
In Dubai, companies can own residential properties, but the process is governed by specific laws depending on the type of company and the location of the property. The key distinction lies in freehold and non-freehold areas:
- Freehold areas: These are designated zones where both local and foreign entities are allowed to buy and own property outright. Examples include Dubai Marina, Business Bay, and Downtown Dubai.
- Non-freehold areas: Ownership here is restricted to UAE nationals or companies with significant Emirati ownership. In most cases, foreign companies cannot buy property in these areas unless exceptional permissions are granted.
Types of companies that can own property in Dubai
- Local companies (mainland and free zone companies): Local companies registered under UAE jurisdiction as mainland companies can buy property in both freehold and non-freehold areas. However, ownership structures where UAE nationals hold at least 51% of the company have greater flexibility. Free zone companies operate in specific economic zones, such as IFZA or DMCC. These company types can own property in designated freehold areas, but a NOC from the Free Zone authority is required.
- Foreign-owned companies: Foreign-owned companies can purchase apartments, but only within freehold areas. They must register with the Dubai Land Department (DLD) and ensure compliance with real estate ownership laws. Companies registered offshore (such as those in the British Virgin Islands) can also purchase property, but they must follow specific procedures, including appointing a legal representative to handle transactions.
Key restrictions and regulations
- Freehold area limitation: Foreign companies can only buy property in freehold areas designated for foreign ownership.
- Dubai Land Department (DLD) approval: All property transactions must be registered with the DLD, which ensures transparency and legal compliance.
- Visa eligibility: Owning a residential property worth AED 750,000 or more may make a company eligible to secure a visa for investors, subject to DLD conditions.
- Title deed ownership: Title deeds are issued in the company’s name, but companies must comply with UAE laws regarding property use, leasing, and maintenance.
- Tax and regulatory compliance: While the UAE offers a tax-free environment, real estate transactions are subject to a 4% DLD (Dubai Land Department) transfer fee, which also applies to company purchases.
Process of registering a company-owned property
Purchasing an apartment under a company’s name involves a precise process to ensure legal compliance and secure ownership. The following paragraphs offer a step-by-step guide to registering a company-owned property in Dubai, including documentation requirements and the role of the Dubai Land Department (DLD).
Step-by-step guide to registering a company-owned property in Dubai
Step #1: Choose the property
Ensure the apartment is located in a freehold area where company ownership is permitted. Conduct a thorough property inspection and verify all terms with the seller or developer.
Step #2: Negotiate and draft the sales agreement
The buyer (company) and seller must agree on the purchase terms, including price, payment schedule, and handover conditions. The parties must sign a Memorandum of Understanding (MOU), which outlines the terms of sale. A refundable deposit (usually 10% of the purchase price) is paid to the seller to secure the property.
Step #3: Open an account with the Dubai Land Department (DLD)
If the company is new to the Dubai real estate market, it must register with the DLD’s Real Estate Regulatory Agency (RERA). Offshore companies must appoint a legal representative in the UAE to handle documentation and registration.
Step #4: Obtain initial approvals
If the company purchases through a free zone or offshore registration, the free zone authority may need to approve the property purchase. Secure a No Objection Certificate (NOC) from the developer if the property is part of a newly built project.
Step #5: Submit documentation to the DLD
Both the buyer and seller (or their legal representatives) must visit the DLD office or an authorised real estate trustee centre to submit all necessary documents. The DLD will verify the documentation, ownership structure, and legitimacy of the company’s registration.
Step #6: Pay fees and taxes
A 4% property transfer fee is payable to the DLD based on the property’s sale price. Other minor administrative charges may apply, depending on the property type and trustee centre used.
Step #7: Final registration and title deed issuance
Once the payment and documentation are verified, the DLD registers the property under the company’s name. A title deed is issued to confirm ownership, which is critical for future property leasing or selling.
Documentation requirements for company-owned properties
- Company trade license
- Memorandum and Articles of Association (MOA)
- Board Resolution
- Passport copies of directors/legal representatives
- No Objection Certificate (NOC)
- Proof of payment
- Power of Attorney (if applicable)
The role of the Dubai Land Department (DLD)
- Property verification: The DLD ensures the purchased property is eligible for company ownership, particularly verifying its location in a freehold zone.
- Registration and title deed issuance: The DLD officially records the property in the company’s name and issues the Title Deed, serving as the ultimate proof of ownership.
- Compliance enforcement: The DLD monitors compliance with UAE real estate laws, including the payment of transfer fees, taxes, and other charges.
- Legal oversight and dispute resolution: In case of ownership disputes or other legal issues, the DLD provides mediation services through its Real Estate Disputes Resolution Centre.
Benefits of owning an apartment through a company
Owning an apartment through a company offers several strategic and financial advantages, especially in a city like Dubai, where the property market is vibrant and investor-friendly. Here are three benefits of corporate property ownership:
Pro #1: Tax optimisation and asset protection
Dubai offers a business-friendly environment with no income or capital gains tax, making it ideal for companies looking to optimise their investments. When a company owns real estate, the property becomes part of its asset portfolio, enhancing its financial stability. Additionally, placing the property under a company shields it from personal liabilities, offering a layer of legal protection. In the event of disputes or financial issues, corporate-owned assets are safeguarded under UAE business laws.
Pro #2: Accommodation for employees or executives
Companies that need to house employees or senior executives benefit from owning property in Dubai. Rather than leasing apartments, companies can offer housing as part of their benefits package, improving employee satisfaction and retention. In industries with high mobility or for businesses with expatriate staff, providing company-owned accommodation streamlines relocation processes and reduces long-term rental expenses.
Pro #3: Rental income and investment potential
A corporate-owned apartment can generate steady rental income when not used for business purposes. Dubai’s rental market is lucrative, and properties in prime freehold areas often yield high returns. In addition, property values in Dubai tend to appreciate over time, offering companies the potential for significant capital gains if they decide to sell. Real estate investments help diversify the company’s portfolio, balancing risk and reward across different asset classes.
About Trade License Zone
At Trade License Zone, we understand that business setup in Dubai can be complex, especially when it involves strategic investments like real estate. Whether you’re a local company looking to expand your operations or an international business entering the UAE market, we offer expert guidance to make the process seamless. From business registration to ensuring legal compliance with property ownership regulations, our specialists are here to help every step of the way.
With extensive experience in Dubai’s business ecosystem, Trade License Zone provides personalised solutions tailored to your needs. If your business strategy involves owning an apartment in Dubai, we can assist you in navigating regulatory requirements, obtaining the necessary approvals, and managing property transactions with ease. Our network of partnerships with free zones, legal advisors, and government entities allows us to streamline the entire setup process, saving you time and effort.
Let Trade License Zone eliminate the hassle of establishing your business in Dubai so you can focus on what matters most – growing your enterprise.