Acquisition of real estate in Dubai through a holding company

Possession of real estate in Dubai through a holding company

With the continuous growth and development of Dubai, the real estate market is witnessing a real boom that is expected to continue throughout 2023. With the addition of new residents, businesses and tourists, the demand for real estate is expected to increase. In addition, the government has taken a number of measures and development plans that are expected to stimulate the market. We often receive inquiries from clients who are wondering if a company can buy property in Dubai and how they can set up a holding company for their Dubai real estate investments.

Can any company own real estate in Dubai? Although companies incorporated in jurisdictions such as the Cayman Islands, British Virgin Islands or Crown Dependencies are often used as holding companies for real estate located elsewhere, they cannot directly own UAE real estate. Real estate in Dubai must be owned by a holding company registered in one of the three approved zones, namely Dubai International Financial Center (DIFC), Jebel Ali Freezone (JAFZA) or Ras Al Khaimah International Corporate Center (RAKICC).

Advantages of using a holding company to own real estate in Dubai

Using a holding company to own real estate in Dubai can be beneficial for a number of reasons:

• Tax advantages:If a company is registered in one of the defined zones, it can benefit from income tax exemptions.
• Confidentiality:With a holding company as the legal owner, its name will appear on the certificate of title and in future transactions, protecting the privacy of beneficial owners.
• Asset protection, inheritance and estate planning:A UAE holding company can be combined with broader asset protection and estate planning structures, including trusts and foundations, which may be established in the UAE or elsewhere. It is common for existing trust structures in jurisdictions such as Jersey, Guernsey or the British Virgin Islands to establish a UAE holding company to preserve real estate investments within the structure.
• Portfolio management:A holding company can provide an efficient and cost-effective way to manage a real estate portfolio in Dubai.
• Limited liability:A holding company can help protect your personal assets from business risks.
• 100% foreign capital:Since the holding company will be registered in one of the designated zones, 100% foreign ownership is allowed. However, it should be noted that if the beneficial owners are not citizens of the UAE or the GCC, the company will still only be able to acquire real estate in ownership rights, as if they were purchasing it in their personal name.

How to create a holding company for real estate in the UAE?

As your corporate services partner in the UAE, Cavenwell can help you choose the right jurisdiction for your real estate holding company. We can also assist you with company registration, providing registered office services, and helping you meet corporate governance requirements, including company secretary services and a local managing director in the UAE.

The content of this article is intended to provide general guidance on the topic. You should consult a specialist regarding your specific circumstances.