Buying Dubai Property via a Limited Company

As property investment in Dubai continues to yield world-class returns, the real estate market has seen a significant increase in activity, becoming increasingly sophisticated.

This evolving trend has expanded the buyer base from expatriates to nation-states, and now includes a growing number of acquisitions made through limited companies. 

How Dubai property sustains limited company purchases

In addition to delivering some of the highest asset returns on investment globally in recent years, Dubai anticipates a continued influx of new residents, businesses, and tourists, which is expected to further drive demand for real estate.

Dubai’s real estate market has consistently attracted global investors. In 2023, the market saw remarkable growth, with sales prices increasing by 18% and rental rates rising by 26% compared to the previous year. This upward trend is projected to continue throughout 2024 and beyond. 

Demand pressures

A significant aspect of the optimistic outlook for Dubai’s real estate market is the supply and demand dynamic, heavily influenced by the expanding population. Since the outbreak of the Covid-19 pandemic in early 2020, Dubai’s population has grown by 6.3%, an increase of approximately 215,000 people. This growth trend has continued post-global lockdowns and is expected to persist, further propelling the demand for real estate.

Dubai’s rapidly growing tourism industry has also significantly contributed towards the demand for real estate. In 2023, the city welcomed 17.15 million overnight visitors, an increase of 19% from the previous year. Such growth has enhanced the need for hospitality-related properties and contributed towards overall market demand.

Meanwhile, the Dubai government has introduced a range of incentives and development strategies to further boost the market. A key initiative is the issuance of a new law aimed at encouraging real estate investments within the emirate. This legislation offers incentives specifically tailored for property investment funds operating in Dubai.

As the profile of buyers evolves, the market sees:

  • More experienced investors: Many now manage extensive portfolios of Dubai properties.
  • An increasingly global demographic: Dubai attracts a diverse array of international buyers, each dealing with distinct tax legislations. 

Consequently, registered real estate agents often field inquiries about whether companies can own property in Dubai and the steps involved in establishing a property holding company for investments in the region.

Dubai’s unique business environment also significantly fuels demand for real estate. The city’s strategic location, acting as a gateway between the East and the West, combined with appealing economic policies such as a favourable tax regime and free trade zones, draws multinational corporations and startups worldwide. 

The process of creating a property holding company

Below, we’ve provided a general overview of the process of establishing a Dubai property investment via a limited company. We often receive inquiries from clients interested in the possibility of a company purchasing property in Dubai and the steps involved in setting up a property holding company for their investments in Dubai real estate.

It’s important to note that the specific process can be very nuanced, reflecting the unique circumstances of each individual investor.

Nonetheless, establishing a property holding company offers numerous advantages, including potential tax benefits, streamlined property management, and enhanced asset protection.

The process of creating a property holding company typically involves several key steps: selecting a business structure, registering the company with the appropriate authorities, and transferring property ownership to the company.

Even with guidance from a registered real estate agent, we strongly advise our investors to seek legal advice when considering this option. 

Company ownership of real estate in Dubai: What investors need to know

While it’s standard for companies registered in jurisdictions such as the Cayman Islands, British Virgin Islands, or the Crown Dependencies to act as holding companies for properties in various locations, these entities are not allowed to directly own real estate assets in the UAE. In Dubai, company-based property ownership is restricted to companies registered in one of three approved zones:

  • Dubai International Finance Centre (DIFC)
  • Jebel Ali Free Zone (JAFZA)
  • Ras Al Khaimah International Corporate Centre (RAKICC) 

The majority of property investors favour DIFC or RAKICC, primarily because of their common law frameworks that allow for different share classes and provide access to the DIFC common law courts, making them attractive for structured property investments. 

How investors establish a limited holding company for UAE real estate

Additionally, investors need to identify the business agents who will oversee the management of both the holding and operating companies.

The process of establishing a holding company in Dubai starts with filing articles of incorporation in a selected jurisdiction, which could be on the mainland or within a free zone.

Additionally, investors must identify and appoint business agents who will be responsible for overseeing the management of both the holding company and related operating companies.

The process of setting up a holding company in Dubai typically involves the following steps:

  1. Identify a business activity: Determine the specific business activity the holding company will engage in.
  2. Choose a unique company name: Ensure the company name is unique and compliant with Dubai’s regulations.
  3. Decide on a location: Investors can establish their holding company either on the mainland or within a free zone. Opting for a free zone offers the advantage of retaining 100% ownership of the company.
  4. Establish a management board: Depending on the chosen structure, holding companies may appoint a director or a board of directors to manage subsidiary operations, establish corporate governance policies, and oversee financial transactions within the group.
  5. Appoint directors: This crucial step involves selecting qualified individuals to guide the company’s strategic direction and ensure regulatory compliance.
  6. Engage business consultants: Utilising the expertise of business consultants can significantly simplify the complexities of setting up and managing a holding company in Dubai.

Why set up a limited company in the UAE to buy Dubai property?

While setting up a limited company may not be the ideal solution for every investor in Dubai, there are certain scenarios where it presents clear advantages. These benefits include:

  • Fast-track to residency visa: Owning property through a holding company can expedite the process of obtaining a residency visa in the UAE, providing greater flexibility and mobility for international investors.
  • Tax incentives: The UAE’s favorable tax environment, which includes 0% tax on corporate profits, capital gains, and dividends, makes establishing a holding company financially advantageous compared to individual business ownership.
  • Diverse ownership options: Establishing a holding company allows for the distribution of ownership across various subsidiaries, such as branches or franchises in different sectors. This diversity can open up more investment opportunities, facilitate more flexible decision-making, and help mitigate risks associated with market fluctuations.
  • Streamlined banking: Having a manager, director, or shareholder with a UAE resident visa simplifies the process of opening and managing corporate bank accounts, enhancing financial operations and access to banking services. 

FAQs on buying Dubai real estate with a limited company

  1. Can any company own real estate in Dubai?
    No. While companies incorporated in jurisdictions such as the Cayman Islands, British Virgin Islands, or the Crown Dependencies are often used as holding companies for property located elsewhere, they cannot directly hold UAE real estate assets.
  2. What are the benefits of using a holding company to own property in Dubai?
    Using a holding company to own property in Dubai can offer tax advantages, privacy, asset protection, inheritance and estate planning, efficient portfolio management, limited liability, and 100% foreign ownership.
  3. How common is buying property in Dubai via a limited company?
    Over USD 146 billion in foreign wealth is invested in the Dubai property market and it’s becoming an increasingly popular option for investors to buy via a limited company.
  4. What is the process for creating a holding company for UAE real estate?
    Establishing a holding company for the purchase of Dubai involves filing articles of incorporation as well as naming the directors who manage both the holding and operating companies.

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