A detailed guide on foreign freehold ownership in the UAE

Are foreigners allowed to own property in the UAE?

According to the UAE Freehold Law in the United Arab Emirates, and in line with the legislations of each emirate, legal residency is granted to any foreigner who proceeds with freehold in the UAE and invests in UAE real estate, regardless of the form of property ownership available in the country.

As for the question Can foreigners own property in the UAE? we answer that this is possible as we will review in this article.

Foreigners' Freehold Law in the UAE

According to the UAE Freehold Law for Foreigners, residency permits based on freehold for foreigners in the UAE are divided into several categories, each with its own special features.

The laws and conditions for freehold in the UAE differ from one emirate to another, and the conditions for foreigners to purchase property in the three main emirates are summarized as detailed in the following paragraphs:

1. Freehold in Dubai

Dubai is the main destination for finance and business in the United Arab Emirates and is considered the country's primary hub for investment and investors from all over the world.

The Dubai real estate market enjoys high investment value, as it includes large and diverse real estate projects.

According to Article 3 of the UAE Real Estate Freehold Law No. 3 of 2006 in the United Arab Emirates, the areas where foreigners are allowed freehold in the Emirate of Dubai have been specified.

A foreign investor wishing to own property in Dubai can inquire about the areas where freehold is permitted from the relevant authorities and review all procedures, conditions, and legal requirements.

In the Emirate of Dubai, foreigners' freehold in the UAE is available for all types of commercial or residential properties by foreign investors in the designated freehold areas specified by the state.

Conditions for Foreigners to Own Property in Dubai

Regarding the conditions for foreigners to purchase property in Dubai, the emirate is described as having better and more flexible conditions for foreigners wishing to obtain the right of freehold in the UAE. The legal regulations governing the process of foreign investment in Dubai are based on laws specific to the emirate itself, issued by the Government of Dubai, in addition to other general laws issued by the federal government of the United Arab Emirates.

Among these conditions are the following:

• Absolute ownership is only allowed in the designated freehold areas specified by the Government of Dubai.
• Commitment to freehold only in the areas designated by the government.
• Registering the property at the Dubai Land Department.
• Payment of financial dues related to purchasing an apartment in Dubai, such as: Land Department fees, property registration fee, property valuation fee, mortgage loan fee, in addition to mortgage registration fees.
• Full ownership (100%) for foreign investors in Dubai covers more than 1,000 commercial and industrial activities, except for economic activities related to the country's strategic sectors, which include 7 different sectors.

2. Freehold in Abu Dhabi

Abu Dhabi is the political capital of the United Arab Emirates, known for its active trade, strong and well-known oil and energy companies, as well as its vibrant real estate market.

There are 9 areas in Abu Dhabi where foreigners are allowed to own property, which are:

Conditions for Foreigners to Own Property in Abu Dhabi

Regarding the conditions for foreigners to own property in Abu Dhabi, in April 2019, a law was issued amending certain provisions of Law No. 19 of 2005 on real estate ownership, granting non-citizens the right to own properties located within investment areas and to dispose of them in any way.

The new law replaced Articles 3 and 4, where the new Article (3) stipulates that the right to own property is limited to the following categories:

• Citizens and those treated as such, whether natural or legal persons
• Public joint-stock companies in which the share of non-citizens does not exceed 49%.
• Anyone who is granted this right by a decision of the Crown Prince or the Chairman of the Executive Council.

The law stipulates that non-citizens, whether natural or legal persons, have the right to own and acquire all original and derivative real rights over properties located within investment areas, and they may dispose of these properties in any way.

Article (4) provides that anyone with the right of usufruct or musataha for more than ten years may dispose of this right, including mortgaging it without the owner's permission, and the property owner may not mortgage the property except with the consent of the usufruct or musataha holder. In both cases, the parties may agree otherwise.

Methods and Systems of Property Ownership for Foreigners in Abu Dhabi

The systems of property ownership for foreigners in Abu Dhabi are divided into four types:

• Ownership System: Under this system, foreigners are granted property title deeds for the residential unit without the land for 99 years, and have full rights to dispose of the residential property and make changes to it (villa or apartment) except for the land.
• Musataha System: Foreigners can invest in building on unused land under the musataha system in Abu Dhabi for a specified period of up to 50 years, renewable for an equal period if both parties agree. The foreign investor has the right to benefit from the property and make changes to it.
• Usufruct System: Under this system, residential properties can be owned for 99 years in specific investment areas, and can be fully utilized without making any changes to them.
• Long-term Lease System: The right to lease residential properties for an initial period of no less than 25 years.

3. Freehold in Sharjah

One of the features of the Emirate of Sharjah is its proximity to Dubai, as it is located next to it. Properties in Sharjah are less expensive than those in Dubai, and it is considered a preferred destination for investors whose budgets do not match the higher property prices in Dubai.

According to Executive Council Resolution No. 26 of 2014 regarding usufruct of real estate in the Emirate of Sharjah, it is permitted, with the ruler's approval and under the conditions he sets, for those who are not entitled to own property in the emirate and their companies to obtain a license in permitted areas designated by the government. The usufruct period is a maximum of 100 years from the date of signing the usufruct contract at the Sharjah Real Estate Registration Department.

Conditions for Foreigners to Own Property in Sharjah

Regarding the conditions for foreigners to purchase property in Sharjah, the government of Sharjah allows foreigners the opportunity to own property under a usufruct right not exceeding 100 years, and in specific areas designated for foreign ownership. The usufruct right is absolute, allowing the foreigner to rent, live in, modify, or resell the property.

Advantages of Owning Property in the UAE

A foreign investor wishing to invest in the UAE real estate market benefits from several advantages, including:

• Possibility of obtaining legal residency in the UAE without the need for a sponsor. This residency is renewed periodically according to the type of residency, and without any legal obstacles as long as the investor retains ownership of the property.
• Legal residency includes the wife and children, with the possibility of bringing in a certain number of domestic workers for the family.
• Possibility of obtaining an Emirates resident ID, which allows starting investment in the UAE legally.
• The investor becomes eligible and nominated for the golden residency in the country and its additional benefits.
• Achieving consistently high returns if the property is rented or resold in a constantly developing real estate market with ever-increasing demand.
• The opportunity to settle and live in the United Arab Emirates in a high-quality living environment that offers luxury, comfort, and modernity.

Own the Best Property in the UAE for Living and Investment with Imtilak Global

If you are looking to own the best property in the UAE for living and investment, Imtilak Global Real Estate Company, operating in the UAE real estate market, offers its distinguished clients exceptional property ownership opportunities suitable for luxury and distinguished living, as well as investment opportunities, whether by renting or reselling at better prices than purchased.

Among the services that Imtilak Global strives to provide to its valued clients is offering integrated services related to foreigners' property ownership in the UAE, starting from legal consultancy to property management and after-sales service, within a package of services covering all the needs of foreign real estate investors in the UAE. For more information, you can contact Imtilak Global through its official channels.

Edited by: Imtilak Global Real Estate Company©

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