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Welcome to our Know-How Hub here at The Dubai Navigator.

We are experts in tax-optimized investment and relocation strategies for individuals and businesses alike, with a focus on Dubai and the UAE. Enjoy our free articles, and if you are looking for more in-depth 1-on-1 support, check out our paid services.

Pros and Cons: Buying Property in the Name of a Company or in Your Personal Name in Dubai

When you buy real estate in the UAE and Dubai, you may do so directly - in your personal name - or indirectly, through a company. Both options have their own advantages and disadvantages. Let's discuss them in detail:


The United Arab Emirates is a highly federal country. Each of its seven emirates has varying regulations on the purchase of real estate.


For the sake of simplicity, in this article, we are focusing exclusively on Dubai. If you are interested in the possibility or process of buying property in one of the other emirates, feel free to reach out to us!


In Dubai, the real estate authorities do allow property ownership by foreigners in designated freehold zones (more on that in this article). Property may be owned directly - in the name of a human individual - or indirectly, through a company.


There are a lot of rumors and misinformation swirling around on the web, specifically, claims that most companies and specifically foreign companies are not allowed to own Dubai property. This is incorrect.


Foreign companies are allowed to buy Dubai property, provided they register beforehand. We here at The Dubai Navigator can help you with that.


Free zone companies across the UAE may also own Dubai property, however, this is conditional on the free zone issuing a non-objection certificate (NOC) beforehand. Not all free zones are willing to do this. With around 50 free zones out there, we can assist you in finding a free zone that works for your situation.



Downtown Dubai by Emaar Properties



Benefits of Buying Real Estate Through a Company


Lower Property Transfer Fees


A key benefit of buying real estate indirectly through a company is the ability to avoid taxes due when re-selling or transferring the property to a new owner.


In Dubai, the Dubai Land Department (DLD) charges two types of transfer fees/taxes.


A 4% fee applies to standard property transfers/sales. This fee is usually split 50:50 between the buyer and seller.


A reduced 0.125% fee applies when a property is gifted to a first-degree relative, or granted to a company that you own directly. Siblings are not considered first-degree relatives. This fee also applies to inherited properties.


Unfortunately, owning Dubai property through a company does NOT allow you to avoid paying this transfer fee. Should you sell or gift your company shares to a third party, you are required to inform the Dubai Land Department and pay the respective fee.


However, if you are a non-UAE resident, there are still many other fees you may avoid by owning property through a company.


For example, depending on your country of residence, you can avoid costly local estate taxes and property transfer fees through indirect property ownership. We are experts at building advanced company holding structures to help you pay lower taxes and secure your investments. Check out our company-related services here.



Fractional Ownership


By putting properties into the ownership of a company, you can easily share ownership between a large number of parties. Being a co-owner of the properties held in the company is as easy as owning shares in the company.


However, please keep in mind that the above-mentioned DLD fees also apply to any partial changes in a property's ownership. If you decide to sell half of your property to your spouse, for instance, you will be required to pay the 4% transfer fee again, whether you own the property outright or through a company.



Easier Property & Inheritance Management for Foreigners


If you are a non-resident foreigner and plan to remain domiciled in your home country, buying Dubai or UAE property through a company registered in your local country can be advantageous.


UAE-based real estate is governed by Sharia law when it comes to inheritance issues. To avoid this, you will either have to set up a (costly) local UAE will, or transfer ownership of the property to a company in your home country.


A company owned by you in your home country, including its real estate assets in Dubai, is always governed by the inheritance laws of your home country.


Contact us for support in creating a customized inheritance strategy for your situation.


Depending on which country you live in, there may be additional tax benefits when owning offshore property through a company. Contact us for details.



Downsides of Buying Real Estate Through a Company, or Why Owning Real Estate Directly May Be Better for You


High Maintenance Costs


The maintenance costs of a company vary greatly based on what type of company you are using, where that company is based, and how many assets and employees the company handles. Costs can be as low as $80/year, and as high as $10,000/year just for maintenance. We have incorporated and maintain companies all over the world, including the UAE, US, UK and, Hong Kong, and are always ready to support you in finding a cost-effective solution for your case.


If managed right, you can own every single of your properties through a separate company, and just pay around $100/year per company.


This is possible even if you are using a UAE-based parent company. However, in that case, you will have to set up a cross-country, multi-company holding structure. Don't worry, we can help you with that!


No Visa Benefits


Owning Dubai property qualifies you for very generous visas with terms of up to 10 years.

Read our detailed article on UAE visas here.


However, these visa benefits do not apply if properties are owned indirectly through a company. In other words, if you intend to apply for a property visa and buy the property through a company, your visa application will get rejected.


Nonetheless, there are other ways of getting a UAE property visa, one of them being the opening of a UAE-based company, more on that here.


Difficulty in getting a mortgage


Most banks are reluctant to approve mortgages on properties that are owned by companies. The reason for this is simple. In most countries, it is much easier and faster to change company share ownership than it is to directly change property ownership.


Banks need assurance that your mortgage is being paid. Making it easier for you to sell your property does not help.


With good connections to smaller, boutique banks, getting a mortgage may still be possible, however, expect to pay higher interest rates.



What Is Your Objective?

Your decision on whether to use companies to buy property or not depends on your objectives, current country of residence, your citizenship, and more.


Why not contact us for free and get more personalized recommendations? We are experts when it comes to UAE property and international, tax-optimized company structures. We would love to help!



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