Yes, but the law provides that natural or legal persons from non-Gulf Cooperation Council (GCC) countries (these being the United Arab Emirates, Qatar, Kuwait, Oman, the Kingdom of Saudi Arabia and Bahrain) may only acquire the following interests, in specific areas designated for foreign ownership from time to time by the Ruler of Dubai:
GCC nationals are entitled to own land anywhere in the Emirate of Dubai.
Last modified 1 May 2025
From a corporate licensing perspective, the concept of a 'permanent establishment' applies when a legal entity is established in the UAE and is inherently subjected to obtaining a registered office address in the said Emirate and/or specific zone. The concept of permanent establishment would then apply when the entity invests in the real estate asset, which is recorded as its fixed place of business. That said, there is no inherent concept of a permanent establishment from a corporate licensing standpoint by merely investing in real estate without operating via a UAE established corporate vehicle. The costs of establishing a corporate vehicle will depend on the type of vehicle and its location.
Real estate which is not designated for foreign ownership can only be owned by GCC nationals or companies wholly owned by them or public joint-stock companies (PJSC). Therefore, such nationals may use a local limited liability company (LLC), a Private Joint-stock Company (Private JSC), or in some cases a PJSC, if they wish to hold the real estate asset through a company. It is essential to include 'real estate' in the 'permitted activities' of the company authorized by the Dubai Economic Department.
Onshore LLCs established in the UAE (outside the free zones) have historically been subject to foreign investment laws which required at least 51% equity participation by a UAE national. The UAE’s new Commercial Companies Law which came into force on 2 January 2022, contains no general requirement for equity participation by a UAE national, however certain activities have been designated as having strategic impact (for example in the security and defence sector) and continue to require prescribed levels of local ownership. An offshore/free zone company can be 100% foreign owned. If the asset is to be wholly owned by foreigners (and therefore in a designated area), a Dubai land Department (DLD) Direction in 2011 confirmed that the shareholders are permitted by the law to use a 'JAFZA' offshore company only to purchase and register the land interest (regulated by the Jebel Ali Free Zone Authority in Dubai and 'accepted' by the DLD), and foreign companies in other jurisdictions are no longer permitted to register land ownership interests. The issue becomes more complicated if the intention is for the company to develop the land and sell units/villas etc. Specific advice must be sought in such circumstances.
On 1 June 2021, the UAE Commercial Companies Law was amended to allow foreign shareholders to own up to 100% of UAE companies incorporated outside of the UAE's designated free zones (ie the onshore UAE companies) in certain sectors of the economy if such sectors do not appear on a list of strategic activities. The sectors of the economy currently listed as strategic include (i) security, defence and military activities; (ii) banks, exchange houses and finance companies; (iii) insurance; (iv) currency printing; (v) communications; (vi) Haj and Omra services; (vii) Quran centres and (viii) fisheries.
Pursuant to this amendment, the respective licensing authority of each Emirate has been empowered to create its own list of activities that permit 100% foreign ownership. These lists currently include the majority of activities available but there remain certain activities (other than strategic ones) which still limit foreign ownership to 49%. Furthermore, certain activities that are regulated by other competent authorities are still subject to foreign ownership limitations. Since the start of 2022, we have seen more activities added to the permitted list of each respective Emirate and anticipate further additions to be made.
There are also a number of 'free zones' in the UAE. These are authorities under which companies can be established with a 100% foreign shareholding. Free zone companies can own property in the free zone they are incorporated in, subject to the laws of the particular free zone but, with regard to property outside the free zones, free zone companies are generally not permitted to hold real estate assets in such areas. Specific advice should be sought regarding free zones because each one is different in terms of its rules, regulations and practices.
The corporate governance requirements of an LLC in onshore Dubai are minimal but do include the appointment of a UAE licensed auditor and a general manager. The shareholders of the LLC can choose whether to have a board of directors or not.
Last modified 1 May 2025
There are various types of company that can be used to hold real estate assets in Dubai. For a foreign investor, there are limits on the percentage of shares that one can own in companies incorporated in the UAE and any foreign shareholding (ie by a national other than the United Arab Emirates, Qatar, Kuwait, Bahrain, Oman and the Kingdom of Saudi Arabia) will mean that the real estate asset must be in an area designated for foreign ownership.
The most relevant types of corporate vehicle are: limited liability companies, public joint-stock companies, and private joint-stock companies.
In the Jebel Ali Free Zone Authority (JAFZA), offshore companies can be set up and wholly owned by foreigners.
Last modified 1 May 2025
Limited liability company (LLC)
This is a company with separate legal personality in which the shareholders are limited in their liability to the amount of their contribution to the share capital. An LLC must have at least one shareholder and subject to the discretion of the relevant competent authorities may be 100% foreign owned. Certain licensed activities will require at least one UAE national (or a company owned by UAE nationals) to own at least 51% of the shares, however circumstances where ownership is limited due to the licence activity are limited. The main features of an LLC include that the shareholders will be liable to the extent of its share capital only, and the appointment of the directors or the board of directors is not mandatory but only optional, although it is mandatory to appoint one individual as the general manager.
Public joint-stock company (PJSC)
A PJSC is a company whose capital is divided into negotiable shares of equal value. The nominal value of each share cannot be less than AED 1 and cannot exceed AED 100. Shareholders are liable only to the value of their shares.
Subject to the discretion of the relevant competent authorities of a given Emirate, a PJSC may be 100% foreign owned. Certain licence activities will require at least one UAE national (or a company owned by UAE nationals) to own at least 51% of the shares. The founding members must subscribe to shares from 30% to 70% of the issued share capital. A PJSC must have at least five founder members.
Private joint-stock company (private JSC)
A private JSC is similar to a PJSC but with the following main differences:
The UAE Companies Law (No. 2 of 2021 as amended) provides that, unless specifically provided to the contrary, all provisions that apply to a PJSC apply to a private JSC as well, other than the points noted above.
A JAFZA offshore company may be wholly owned by foreigners, ie there is no requirement for any shares to be held by a UAE national. The minimum number of shareholders is one.
Last modified 1 May 2025
Limited liability company (LLC)
The UAE Companies Law does not prescribe any minimum share capital for an LLC. The LLC is required to have adequate share capital to achieve the purpose of its incorporation. Therefore, the adequate capital required for an LLC can be decided by its shareholders. There is no guidance issued to indicate the level of adequacy and neither is there any decision on the minimum share capital. The shares should be comprised of equal shares. In practice a notary public would usually accept a minimum share capital for an LLC in Dubai of AED10,000 divided into equal shares, each with a minimum value of AED1,000. Public subscription for shares is not permitted and the share capital must be paid up in full.
Although the UAE Companies Law provides that the shares in cash shall be deposited in a UAE registered bank, presently, there is no requirement to provide evidence of the deposit of the share capital in the bank. Details of its share capital will be included in the LLC's memorandum of association which will need to be notarised by the UAE notary public as part of the incorporation process.
Public joint-stock company (PJSC)
The minimum limit of the issued capital of a PJSC is AED30 million. This increases in the case of banks and insurance companies.
Given the substantial capital requirement, and the fairly restrictive rules of establishment and management, it is often not a suitable corporate vehicle for overseas investors wishing to establish a vehicle for investment purposes.
Private joint-stock company (private JSC)
The minimum share capital required is AED5 million.
There is no minimum share capital requirement for JAFZA offshore companies. However JAFZA can change this at any time. There is no requirement to deposit the share capital in a UAE registered bank and therefore it is not necessary to provide evidence of the deposit of the share capital in the bank.
Last modified 1 May 2025
Limited liability company (LLC)
Legal costs to establish an LLC can be in the region of USD20–30,000 (excluding VAT and disbursements) depending on the nature of the licence activities.
Similar to an offshore company, there is no requirement to deposit the share capital of an LLC in a UAE registered bank and therefore it is not necessary to provide evidence of the deposit of the share capital in the bank.
An LLC must take a lease of premises from which to conduct its business (which are inspected and must be approved by various government entities). A fee of around 5% of the annual rent of the office space and the annual rent of the general manager's home is usually charged as a fee payable to the Municipality and is included as part of the trade licence fee.
The rent itself can be considered a set up cost and there are fixed fees for each employee of the company. Additionally, there are ancillary fees which include approval of the trade name, a general application fee and the cost associated with notarising the memorandum of association before a UAE notary public.
Public joint-stock company (PJSC)
In addition to the share capital, the other typical costs can vary widely.
The costs will include professional fees for preparing the founders' agreement, a prospectus or invitation for public subscription supported by a feasibility/business plan, auditors' certificate, due diligence report and memorandum and articles of association. The memorandum and articles of association must be in accordance with the specimen issued by the Ministry of Economy and Commerce and any deviation from this must be approved by the same Ministry.
The PJSC must have offices and therefore there will be rental costs and other costs ancillary to this.
The PJSC must register with the DET to obtain its trade licence and the Securities and Commodities Authority (SCA) to obtain its certificate of registration. The fees to be paid to the DET are related to rent payable for the office space and SCA has certain annual fees which need to be paid as well.
There are also fees relating to the cost of being listed on a particular stock exchange.
Private joint-stock company (private JSC)
In addition to the share capital, the other typical costs can vary widely.
The costs will include professional fees for preparing the founders' agreement and memorandum and articles of association. In addition, the application to set up a private JSC needs to include a business plan and feasibility study.
The memorandum and articles of association must be in accordance with the specimen issued by the Ministry of Economy and Commerce and any deviation from this must be approved by the Ministry of Economy and Commerce.
The private JSC must have offices and therefore there will be rental costs and other costs ancillary to this.
The private JSC must also register with the DET to obtain its trade licence and the Ministry of Economy to obtain its certificate of registration. The fees to be paid to the DET are related to rent payable for the office space.
In addition to the share capital requirements, the other typical costs can vary widely.
There will be professional fees for preparing the constitutional documents and it is common for an agent to be used to handle the incorporation process and on-going filing requirements. It is not possible for the offshore company to lease an office in its name, so it should use the address of the company's registered agent as its address.
Last modified 1 May 2025
Limited liability company (LLC)
An LLC becomes operational once a licence is issued by the DET. Incorporation timelines are typically six to eight weeks, contingent on sourcing an office lease, the availability of documents for filing with the DET and issuance of the licence. Timelines are largely contingent on the preparation of documents in the jurisdiction of the shareholder, ie documents issued outside the UAE will need to be notarised and legalised up to the level of the UAE Embassy in the country of origin, attested by the UAE Ministry of Foreign Affairs, translated into Arabic by a certified legal translator and stamped by the Ministry of Justice. The notarisation and legalisation timelines will vary from one jurisdiction to another.
Public joint-stock company (PJSC)
The process of setting up a PJSC is fairly involved and requires a number of approvals to be obtained. To obtain all the required approvals before shares can be offered for subscription would take at least 15 weeks. Following this period the initial public offering for subscription for shares should be kept open for between 10 days and 90 days and this is subject to further extension.
Private joint-stock company (private JSC)
In order to set up a private JSC an application has to be made to the DET and the Ministry of Economy and this application has to be supported by a business plan and feasibility study. These documents are studied and once any recommended changes have been made the setting up process can proceed. The entire process from submission of the application to the grant of a licence usually takes at least 15 weeks.
Once all the necessary paper work is submitted and fees paid, a JAFZA offshore company should take between two and three weeks to be established and a certificate of incorporation issued.
Last modified 1 May 2025
Limited liability company (LLC)
An LLC must:
Public joint-stock company (PJSC)
There are greater corporate governance requirements, as one would expect, with a PJSC compared to an LLC. Since a PJSC is required to be listed it has to comply with the governance requirements of the relevant stock exchange. These include various disclosure requirements to be met and the publication of accounts and other statements. The SCA has also issued a corporate governance code, adherence to which is mandatory for PJSCs.
Additionally, if new shares are offered, the existing shareholders have a pre-emption right before they are offered to the public (except when shares are being issued to "strategic investors" outside of the pre-emption regime).
Private joint-stock company (private JSC)
A private JSC must have a board of directors consisting of between three and 12 directors and each director's term is no more than three years (subject to re-election). From the directors, there must be a chairman and such chairman must usually be a UAE national.
The corporate governance requirements for a private JSC are less strict than a PJSC. Since private JSCs are not listed entities they are not bound by the same disclosure requirements as PJSCs, unless the private JSC voluntarily chooses to adhere to the corporate governance code which is mandatory for PJSCs.
Within the Jebel Ali Free Zone Authority
A JAFZA offshore company must have a minimum of two directors and a company secretary at all times.
The directors remain in office for a period determined by the shareholders.
There are no UAE residency requirements on the directors, general manager and company secretary of the offshore company. It will not be possible for the offshore company to obtain a UAE visa for any of its officers.
Last modified 1 May 2025
The major accounting firms maintain a considerable presence in the UAE and are employed by many companies in relation to corporate/accounting compliance. Compliance costs vary considerably and are commensurate with the needs of each individual company.
Last modified 1 May 2025
The UAE has introduced Corporate Income Tax (CIT) for financial years starting on or after 1 June 2023. All UAE entities, whether incorporated in UAE mainland or in the Free Zone (including offshore companies) are required to register for CIT.
Regular taxpayers (ie entities that cannot benefit from the Free Zone tax regime) are subject to a 9% tax rate on table income exceeding AED 375,000.
Under the Free Zone tax regime, entities that are considered Qualifying Free Zone Persons (QFZPs) are eligible for a 0% CIT rate on certain types of income (ie qualifying income), provided specific criteria are met. The regulations with respect to the Free Zone tax regime are relatively complex, but in essence, in a real estate context, only income from commercial properties located in the Free Zone may qualify for the 0% rate, provided the transaction is conducted with an entity registered within a Free Zone (ie a Free Zone Person). Conversely, revenue from residential properties does not qualify for the 0% rate. It is important to note that properties such as hotels, motels, bed and breakfasts, serviced apartments, and similar establishments are not categorized as commercial properties for the purposes of the Free Zone tax regime.
Most of the individual Emirates have issued income tax decrees. While these decrees are in principle applicable to all (respective) entities, in practice corporate tax is currently only enforced against oil and gas companies, including certain petrochemical companies, and, in certain Emirates, branches of foreign banks. The enforcement practice may change at any time and corporate tax could be enforced, potentially even retroactively, on a larger population of corporate entities. Companies established in one of the Emirate level instated Free Zones could enjoy a temporary exemption from corporate tax, granted by the relevant Free Zone Authority.
Last modified 1 May 2025
Are foreigners allowed to invest by directly purchasing a commercial real estate asset?
Yes, but the law provides that natural or legal persons from non-Gulf Cooperation Council (GCC) countries (these being the United Arab Emirates, Qatar, Kuwait, Oman, the Kingdom of Saudi Arabia and Bahrain) may only acquire the following interests, in specific areas designated for foreign ownership from time to time by the Ruler of Dubai:
GCC nationals are entitled to own land anywhere in the Emirate of Dubai.
Last modified 1 May 2025