REALWorld Law

Sale and purchase

Taxation of share deals

Which taxes are relevant/which transaction costs will be incurred when buying real estate via the shares in the owning company (share deal) and how are the transaction costs shared between the buyer and seller?

United Arab Emirates - Dubai

United Arab Emirates - Dubai

There will be nominal fees payable to the relevant company regulator to register the transfer of shares, for example, the Dubai Economic Department or any free zone authority.

Dubai Land Department (DLD) require changes in shareholding of real-estate-owning companies to be informed to them and a proportionate transfer fee will be applied. Failure to inform the DLD can result in a fine.

Care is required when entering into a share deal because the location of the land will be all important in determining what nationalities can own shares in the owning company. For example, a local LLC company which has 'local' shareholders and which owns land in an area not designated for foreign ownership cannot then have some shares held by a 'foreigner' as it will no longer be entitled to own the land.