Legally Invest in Real Estate as an Expatriate, Foreigner, or Immigrant in Dubai
With the ever-growing population of expats, the demand for property in Dubai is also growing rapidly. In order to invest in real estate in Dubai, it is important for those without an Emirate residency status to understand what they need to do and how much they are allowed to invest. There are clear regulations on how much money can be invested and what types of property investment are allowed. However, there are no limitations on the amount of money that can be made from investments once you have acquired residency status.
In general, real estate is the most lucrative and sought-after investment for most people. We want to see the value of our money with our own eyes. However, it could be intimidating to buy real estate properties, especially for expatriates, foreigners, and immigrants living abroad. There are specific laws, rules, and restrictions that everyone must strictly adhere to to make their purchases as legal as possible.
Read on for some tips and guide on how to legally invest in Real Estate as an Expatriate.
What Is A Real Estate?
A real estate is a form of real property that mainly involves land with any permanent improvements attached to the ground, whether natural or artificial.
Real estate can be both an investment for commercial and private purposes. But before gas pedaling to buy real estate in Dubai, it is equally important to note that there are certain legal aspects to consider. Real Estate Law No. 7 of 2006: Land Registration Law in the Emirate regulates ownership by foreigners of Dubai properties. Specifically, Article (4) of Law No. 7 of 2006 outlines who can buy and own property in Dubai: a UAE citizen and a Gulf Cooperation Council (GCC)citizen.
Furthermore, foreigners, immigrants, or expatriates have the privilege to purchase properties in the areas designated for foreign property ownership on a freehold or leasehold ownership only. Below is a more in-depth discussion of this topic.
Guide to buying Real Estate in the UAE, Dubai as an Expatriate
- Understand your purchasing position: Types of Property ownership in Dubai.
As previously discussed, foreigners, immigrants, and expats alike could purchase their real property in Dubai provided by the Property Ownership Law or Law No. 7 of 2006 in areas designated as freehold. However, free zones such as the Dubai International Financial Centre have their unique property laws. The UAE nationals and their companies are allowed to own land anywhere in the Emirate. However, companies with non-UAE shareholders are not considered a UAE OR Gulf Cooperation Council unless they are public joint-stock companies.
Also, there is another type of ownership that an expatriate could acquire. That is leasehold ownership. Non-UAE nationals have the right to own a long lease, musataha, freehold titles, or usufruct as long as the Ruler of Dubai permits them. The usufruct is fixed-term legal for 99 years so that non-UAE nationals can solely own real estate in specially selected areas. However, the foreigner will not own the land where the property is constructed; the land’s ultimate ownership goes back to the freeholder. It is crucial to understand your position as an expatriate, either individually or as a business, to identify the areas where it is legally feasible to own land in the UAE.
The central bodies charged with enforcing these laws include the Dubai Land Department and the Real Estate Regulatory Agency.
2. Complete all Dubai Land Department real estate purchasing procedures.
The DLD is the most important body in real estate and land in Dubai. This organization decides which individuals are eligible to become real estate owners in the country. It also determines when and how real estate can transfer ownership therefore being the main association dealing with land matters in Dubai. Completing all due process with the DLD can allow you own your real estate or procure your lease without incurring legal impediments. Any aspiring or current real estate owner who is not a UAE national should ensure that they continuously check with the DLD to ensure that any updates or changes to the policies do not affect your current contractual agreements.
3, Find areas where you can own real estate.
Article 3 of Regulation No. 3 of 2006 specifies the land plots designated as freehold properties where non-UAE individuals may own real estate or have their leases. These areas include the Palm Jumeirah, Burj Khalifa, Dubai Marina, Discovery Gardens, The World Islands, and International City among others. These areas are then open for use by non-UAE expatriates who have made real estate investments in Dubai. However, a caveat of the rules concerning the real estate ownership in these areas is that non-UAE nationals and their businesses can include a free zone company in Dubai but must register the real estate only in the name of the company created.
4. Ensure that all documentation is legal and real.
Before purchasing any piece of real estate, it is crucial to verify the ownership with the seller and determine whether they have the authority to sell off a particular piece of real estate. It is also essential to view the original title deed of any land plot and also determine whether the project is active or not.
5. Purchase Process
To purchase a land plot in the UAE, the process is fairly simple once the non-UAE/GCC national has identified a suitable piece of land that fulfills the legal requirements. Essentially, for non-UAE nationals looking to purchase, the designated areas are usually still in development as such, the areas where they may be interested in purchasing are usually under the control of a master developer or a sub developer. The process includes paying the deposit for the real estate after approaching the developers and paying a typical percentage of the sales price. The seller can then proceed to change the title deed depending on whether or not they receive a non-objection certificate for the piece of land.
Hazards Associated with Buying Real Estate in the UAE
The hazards of buying land in Dubai can be very costly to a first time buyer. It is imperative to research and ensure that the piece of land has been acquired legally both on your part as the buyer and on the part of the seller. By following these steps, you can avoid hazards such as legal troubles concerning land ownership as well as avoid unscrupulous individuals who may sell land that is not for sale to unsuspecting buyers.