Structuring of real estate ownership in Dubai requires careful consideration of legal frameworks, property ownership rights, available vehicles, tax implications, financing options, and succession planning. As the market develops, with its dynamic growth and attractive opportunities since freehold ownership was introduced for foreign investors, the legal framework in the country also evolves.
Choosing the optimal legal ownership structure Individual vs. Corporate ownership. Real estate and property rights may be held by either individuals or corporate entities.
Individuals are classified as UAE and GCC nationals, and foreign nationals.
UAE and GCC Nationals are permitted to own freehold property anywhere in the Emirate of Dubai, without restrictions. Foreign nationals are allowed to own freehold property, only in specific areas designated for foreign ownership, known as "Designated Areas"
Individual ownership remains the most straightforward option, requiring minimal documentation (generally: passport, visa, EID, bank account and No Objection Certificate from the developer) for property transfer.
Property ownership through companies
As an alternative to individual ownership, property investors may choose to own real estate through corporate entities. Ownership structures must account for the property law concerning real property registration in the emirate of Dubai, and subsequent amendments.
A. Onshore Companies
UAE and GCC nationals and companies incorporated in the UAE (excluding the free zones) that are wholly owned by UAE or GCC nationals, have the right to own any property interest in real property located in any area in the Emirate of Dubai, in accordance with the Property Law. This includes limited liability companies and private joint stock companies in which majority shareholders are UAE or GCC nationals.
B. Offshore companies
Since 2011, DLD has restricted property ownership by offshore companies (not to be muddle up with a Free Zone company).
Presently, the only types of offshore companies that DLD permits to own property in designated areas are offshore companies incorporated in:
Jebel Ali Free Zone (JAFZA)
Dubai Multi Commodities Centre Free Zone (DMCC)
Ras Al Khaimah International Corporate Centre (RAK ICC)
Thus, offshore companies set up in other jurisdictions such as the Cayman Islands or the British Virgin Islands etc. are currently not allowed to own direct property in Dubai.
C. Free zone companies in Dubai and other Emirates
Companies incorporated in certain free zones approved by DLD, such as:
JAFZA, DMCC, DIFC, ADGM, RAKEZ and RAK ICC are allowed to own land and freehold properties in Designated Areas.
Real property in Dubai can be held by an ADGM SPV or a DIFC prescribed company (“PC”). These are passive holding companies, they cannot conduct actual business operations, cannot have employees, are limited by shares/corporate forms that have shareholders, board of directors, and a standard set of corporate documents.
ADGM SPVs are entities formed if the incorporating parties could prove a link to ADGM, the UAE and/or the GCC Region as economic substance.
Prescribed Company (“PC”) in DIFC - the regime has been amended in 2024 to allow more flexibility to establish a PC by any person (natural or corporate) that is resident anywhere in the world, intending to hold title to, or control one or more GCC registrable assets if certain conditions are met. These assets can include properties or property interests that require registration with a GCC authority to establish legal ownership.
Foundations - as they have their own legal personality, can hold real property in Dubai and are available in DIFC and ADGM. Each financial free zone has its own regulations and requirements for establishing and operating foundations, so legal advice is recommended before choosing a jurisdiction.
Trust structures - are legal relationships between a settlor, a trustee, and a beneficiary where the trustee holds formal ownership and controls assets. These are also available in the DIFC and ADGM, as well as in some other offshore jurisdictions for owning assets including real estate.
REIT - real estate investment trusts have increasingly been sought after by family offices and real estate firms which aims to take advantage of the ongoing growth in investors seeking to invest in UAE real estate market as an alternative asset class.
Entities holding real estate for investment can be subject to 9% corporate tax on profits exceeding 375,000 AED under Federal Tax Legislation on the Taxation of Corporations and Businesses.
Part of the UAE’s commitment to prevent money-laundering and improve financial transparency Beneficial Ownership Regulations requires disclosure of ultimate beneficial owners (UBOs) holding >10% shares in property-owning entities.
In conclusion
Dubai’s regulatory landscape continues to evolve. Stakeholders must balance compliance with forward-looking strategies that fits with their long-term goals. This specific subject matter is quite broad and dynamic, and therefore, all available options, their benefits, and relevant applicable laws and regulations must be taken into consideration and discussed with relevant authorities, before investors decide which one is the most efficient.
Disclaimer: The information presented in this article is for general information purposes only and does not constitute legal advice or any advice at all, nor should it be used as a basis for any specific action or decision. For further information please do your own diligence and contact a competent authority.
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