As one of the top corporate markets in the world, the UAE draws investors as well as entrepreneurs. After-all everyone wants to get a foothold in the rapidly expanding realty sectors of Dubai and Abu Dhabi. You can begin a real estate business in Dubai to make the most of the lucrative opportunity.
You need careful planning, a complete comprehension of the legal requirements, and smart commercial positioning in the United Arab Emirates. Only then, you can launch a business and get successful in the Dubai’s realty industry. Read this guide to know the key actions, factors, and advantages of starting a profitable real estate business in Dubai.
Insights about the growth of the UAE’s real estate sector
These statistics highlight the progress in the state of the real estate in the UAE.
- Investment in real estate industry is increasing by the UAE’s government programs like the Golden Visa and 100% foreign ownership.
- In next five years, the Dubai realty market is forecast to achieve a compound annual growth rate (CAGR) of 5–7%.
- Top countries investing in the UAE’s real estate sector include India, UK, Pakistan, and China.
- The volume of real estate transactions in Dubai was AED 500 billion in 2023, indicating strong market activity.
- With population of 2.7 million people and home to 200 nationalities, Dubai is a place to live and work in.
- Dubai is just within 8 hour flight from 2/3rd of the world’s population.
- The strategic placement of Dubai on the world map makes it a city that connects East and West.
- Advances in the PropTech and AI are changing the face of the property management in the UAE.
- Following the Expo 2020, the UAE rental market had a notable uptick in activity, drawing in international investors.
Process to register a real estate business in Dubai
Follow this step-by-step procedure for registering a real estate business in Dubai.
- Select company name: Decide a catchy business name and accompanying trade name that abide by the UAE regulations.
- Determine business structure: Sole proprietorships, LLCs, and free zone entities are among the options for real estate companies in Dubai.
- Get preliminary permission: Take the no objection certificate (NOC) from the Dubai Economic Department (DED) or the free zone authority.
- Secure office space: Comply with legal requirements of establishing a physical presence by renting or leasing a workplace in Dubai.
- Apply for RERA license: Submit application for license to the Real Estate Regulatory Authority (RERA) in Dubai. Finish the requisite RERA training and earn the essential certifications. Because, they greatly improve your chances of fetching the RERA license in Dubai.
- Submit legal documentation: Attach this legal paperwork with your licensing application to the DED or the chosen free zone authority.
- Copies of the passports of owners and partners
- Photocopies of their visa
- Copy of the Emirates ID for residents
- Business plan detailing the company’s goals and operations
- NOC from the DED or the free zone authority
- Trade name reservation certificate
- Office leasing/Ejari agreement
- RERA training certificate (for brokers and property managers)
- Obtain additional approvals: You may need to take some more approvals depending on your business operations. Regulatory approval from Dubai Land Department (DLD) is obligatory for carrying out some business activities in the realty sector.
- Arrange corporate bank account: Open your business bank account for credibility and ease in conducting financial transactions.
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Considerations for companies in the Dubai’s realty sector
International entrepreneurs must consider these important points before establishing a real estate firm in Dubai.
- Market research: Fully assess the demand, competitiveness, and real estate trends in Dubai.
- Business classification: Select between property investment advising, real estate development, property management, or realty brokerage.
- Legal requirements: Ensure legal compliance like obtaining a Dubai real estate license and abiding by the RERA rules.
- Financial planning: Calculate startup cost, operating expenses, and the return on investment (ROI).
- Suitable location: Pick the ideal location for business registration depending on the target market of your realty company in Dubai.
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Reasons to invest in real estate industry of Dubai
These are the motives behind investment in the real estate sector of Dubai.
- Rapidly growing economy
- Demand and supply for realty investments
- UAE residency for property owners
- Low property acquisition cost
- No property tax in Dubai
- Security for resident property buyers
- Dubai tourism boom driving rentals
Now, we take a look at these factors supercharging the realty sector investments in Dubai.
Rapidly growing economy
In case, you are looking to invest on an overseas real estate property. You must know not only you are investing in a piece of land, but also contributing towards that country’s economy. Financial growth is one the key drivers for investing in Dubai’s realty sector.
Dubai’s economy is continuously flourishing and is amongst the fastest growing economies of the world. It comes out as a champion in MENA region due to the reason that government reduces its dependency on oil. Dubai is shifting its focus towards other sectors like eCommerce, real-estate, trade, business, tourism, and new technologies.
Demand and supply for realty investments
According to Dubai properties Office, 80% of the demand of real estate will come from international investments. Nevertheless, just over 50% of it comes from foreign investments, as of today. It means that there are plenty of opportunities for investors from abroad, to capture this huge realty market.
UAE residency for property owners
Another reason for purchasing property in Dubai is the eligibility to get the UAE resident visa. However, there are some requirements which you need to match, such as minimum property value, and no mortgage. To obtain the residency visa of the UAE, you will have to visit the Dubai Land Department.
Low property acquisition cost
The acquisition cost of land is much low in Dubai while comparing to other parts of the world. The average price per square foot in Dubai is USD 468, in comparison to London, where it is USD 3,208.
No property tax in Dubai
A major motive to invest in real estate market of Dubai is that it is tax free. If you buy a commercial or residential property, it will not lead to tax imposition. Additionally, once you become the owner of property in Dubai, no annual tax will be levied on you.
Security for resident property buyers
Another motive of buying a property in Dubai is the provision of security, as it has the lowest crime rates globally. Your wallet is not stolen on roads, and you do not have to worry if you leave visible in car. It is why people prefer to live in Dubai, as here they feel fully safe.
Dubai tourism boom driving rentals
Tourism is playing a significant role in transforming the economy of Dubai, and the UAE. Dubai is amongst the top travel destination of the world and is widely known as the world’s shopping hub. Construction of real estate development projects like hotels, resorts, lodges, vacation rental homes are supercharging the economy.
Business activities permitted by UAE real estate license
Landing a real estate license in the UAE allows you to perform these business activities.
- Real estate marketing and advertising
- Property development and investment
- Brokerage for leasing and renting
- Property assessment and consulting
- Facility and asset management
Benefits of establishing a realty business in Dubai
Here are some of the advantages of setting up realty company in Dubai.
- Adaptable business models: Entrepreneurs can create several real estate companies to meet the demands of the particular markets.
- Robust market growth: Dubai government’s programs and ongoing infrastructure development are driving the realty demand.
- Choice of jurisdiction: You can select from Dubai mainland or the free zone, depending on your chosen real estate services.
- Business-friendly regulations: Investors can easily enter the property sector of Dubai, as it provides a simple licensing procedure.
- International clientele access: Dubai is a global center for real estate with a wide range of clients throughout the world.
- High ROI potential: Capital inflow is drawn to Dubai by its tax-free environment and investor-friendly legislation. Rental returns in Dubai are very high in comparison to major real estate capitals around the globe. Rental incomes are 7-8%, with best performing areas generating 10% rental yield, and minimum return not any less than 5%.
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Conclusion
As one of the most advantageous countries in the world, the UAE is known for its investor-friendly policies. Especially, its crown jewel Dubai is famous for the booming realty market around the world. Consequently, there are a ton of options to start a real estate business in Dubai.
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FAQs about progressive real estate sector in Dubai
These are the answers to the common questions about the lucrative real estate sector of Dubai, UAE.
Yes, real estate brokers, property managers, and developers in Dubai must get license from the Real Estate Regulatory Authority (RERA).
Yes, foreign investors can incorporate a real estate business in a Dubai free zone with 100% ownership. Also, many business activities allow expatriate entrepreneurs to form a realty business in mainland with full ownership. However, some business models require the on-boarding of local nominee partner with minimal stake in a foreigner run realty company.
The cost to launch a real estate business in Dubai starts from AED 15,000. Nonetheless, the type of property sector activity, office location, and additional regulatory approvals can increase the budget. Overall price of starting a realty company in Dubai can increase to AED 50,000 with initial operational expenses.
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