Investing In Dubai

The Emirate of Dubai is one of the seven emirates of the United Arab Emirates. It is the most
populous emirate of the UAE. The capital of the emirate is the eponymous city, Dubai.
The United Arab Emirates (UAE) is a federal constitutional monarchy made up from a federation
of seven hereditary tribal monarchy-styled political system called Sheikhdoms. It is governed by
a Federal Supreme Council made up of the ruling Sheikhs of Abu Dhabi, Ajman, Fujairah, Sharjah,
Dubai, Ras al-Khaimah and Umm al-Quwain. All responsibilities not granted to the national
government are reserved to the individual emirate. A percentage of revenues from each emirate is
allocated to the UAE's central budget.
In this context it is important to bear in mind, that while the federal laws/decrees that govern the
essential central policies, there can be regulations issued by the local authorities that are applicable
only to particular emirates.

Company Law applicable in Dubai.

Business activities of UAE is at present governed by Federal Decree-Law no. (32) of 2021 ON
COMMERCIAL COMPANIES. 1

There are three main environments in which businesses can operate in UAE.

• Mainland
• Free Trade Zones
• Off-Shore

And there are 5 different forms a business can be structured in Mainland UAE.

a- Joint Liability Company.

b- Limited Partnership Company.
c- Limited Liability Company.
d- Public Joint Stock Company.
e- Private Joint Stock Company

According to the Federal Decree-Law no. (32) of 2021 ON COMMERCIAL COMPANIES,

S 9(2); “Any company that does not take on any of the forms provided for in the preceding
clause shall be considered null and void, and the persons who concluded contracts or transactions
in its name shall be held severally and jointly liable for the obligations arising therefrom”

https://ded.ae/DED_Files/Files/%D8%A7%D9%84%D9%82%D9%88%D8%A7%D9%86%D9%8A%D9%86%20%D9%8
8%D8%A7%D9%84%D8%AA%D8%B4%D8%B1%D9%8A%D8%B9%D8%A7%D8%AA%20PDF/Federal%20Decree-
Law%20no.%20(32)%20of%202021%20ON%20COMMERCIAL%20COMPANIES.pdf
Formation of Mainland companies by non-nationals.

Up until 2020, all mainland commercial companies were required to have a UAE local /s as the
major shareholder/s according to Art 10(1) of Federal Law No. 2 of 2015 ON COMMERCIAL
COMPANIES
Article 10- Rate of National Contribution
1- With the exception of Joint Liability Companies and Simple Commandite Companies
where all the joint partners of any of such companies shall be UAE nationals, any company
established in the State shall have one or more UAE partners holding at least 51% of the
share capital of the company.

This section of the law was later amended by Federal Law by Decree No. (26) of 2020 on
Commercial Companies 2 as below.
Art 10 (3) (a)
3. Whilst taking into account the competencies prescribed for the Cabinet as per Clause (2)
of this Article, the competent authority shall have the following powers:
a. Determining a certain percentage for the contribution of nationals to the capital or the
boards of directors of all companies incorporated within the scope of its competence.

This law annuls the requirement for commercial companies to have a major Emirati shareholder
or agent, thus, providing full foreign ownership to non-Emiratis of all nationalities of onshore
companies established by them.

Dubai Economy permits full ownership for foreign investors in accordance with the Federal
Decree-Law No. 26 of 2020 that amended some provisions of Federal Law No. 2 of 2015 on
Commercial Companies.
As per the guidelines published by Dubai Economy on its website, 100 per cent foreign ownership
is available for more than 1,000 commercial and industrial activities (PDF, 500 KB), excluding
economic activities with a strategic impact, which relate to seven sectors.3

A Complete list of activities that does not require a local partner have also been specified. 4
[ These activities might differ depending on the Emirate, for e.g. .in Dubai it is published by DED
(Dubai Economic Department) and in Abu Dhabi it is done by ADED (Abu Dhabi Economic
department).]

2https://rakez.com/Upload/ManageDocument/Federal-Law-No-(26)-of-2020-on-Amending-Certain-Provisions-of-
Federal-Law-No-(2)-of-2015-regarding-Commercial-Companies_EN_20210824125840.pdf

3 https://u.ae/en/information-and-services/business/full-foreign-ownership-of-commercial-companies

4 https://ded.ae/DED_Files/ded_other/Full_Foreign_Ownership_Activities.pdf
Establishing business in free zones.5

Entities established in free zones shall be subject to the laws and regulations governing the
respective free zone authorities. The most significant benefits of the free zones in the State include:

• Free capital transfer.

• 100% ownership of fixed assets.
• Up to 100% foreign ownership in free zones.
• Up to 100% of profits return in special economic zones.
• Strong banking system with high levels of cashflow and government support of the
banking sector.
• No restrictions on transfers.
• High value of currency and a fully convertible currency.
• Low inflation rate.
• Low custom tariff, 0 to 5% for almost all goods.

Free zone entities in the State shall take one of the following legal forms:
• Free zone limited liability company
• Free zone company
• Free zone establishment

Purchasing property in Dubai.

Dubai’s property market is open to non-resident investors, meaning that a residence visa is not
necessary when buying property. However, they are required to hold a valid passport when
purchasing property in Dubai to confirm their identity. Foreign ownership is permitted only in
areas designated as freehold as outlined by the government6. Foreigners (who don’t live in the
UAE) and expatriate residents may acquire freehold ownership rights over property without
restriction, usufruct rights, or leasehold rights for up to 99 years.7

Article 3 of Regulation No. 3 of 2006 Determining Areas for Ownership by Non-Nationals

of Real Property in the Emirate of Dubai 8(pages 129-132) indicates the land plots designated
as freehold properties.

Regulation No. (1) of 2010 Amending Regulation No. (3) of 2006 Determining Areas for
Ownership by Non-UAE Nationals of Real Property in the Emirate of Dubai, brought in an

5 https://www.moec.gov.ae/en/establishing-business-in-free-zones

6 https://www.bayut.com/mybayut/guide-foreigners-buying-property-dubai/#eligibility-criteria
7 https://u.ae/en/information-and-services/moving-to-the-uae/expatriates-buying-a-property-in-the-uae
8 https://dubailand.gov.ae/media/zrrd4qw4/en-legislation.pdf
amendment with regard to the Real Property existing on Plot No. (224), Nad Al Sheba, stating as
follows. A non-UAE national may acquire freehold ownership rights, without time restriction, in
the Real Property existing on Plot No. (224), Nad Al Sheba.

The title deeds are issued by the Land Department in the emirate. There is no age limit to own
property in Dubai.

Article 4 of Law No. (7) of 2006 Concerning Real Property Registration in the Emirate of
Dubai9, states as follows.

“The right to own Real Property in the Emirate shall be restricted to UAE nationals, nationals of
the Gulf Cooperation Council Sates, companies fully owned by these nationals, and public joint
stock companies. Subject to the approval of the Ruler, non-UAE nationals may be granted the
following rights in the relevant areas determined by the Ruler:
a. Freehold ownership of Real Property, without time restrictions; and
b. Usufruct or lease rights in Real Property for up to ninety-nine (99) years.”

9 https://dubailand.gov.ae/media/x0bf21ii/book.pdf