United Arab Emirates has transformed itself into an ultra modern well constructed city from an undeveloped community of pearl divers and fishermen. UAE consist of seven emirates, Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah. Among them Abu Dhabi and Dubai have been recognized on international level for their tremendous growth and development in business, real estate and tourism sectors. Soon after the discovery of oil reservoirs in 1962, State Government started investing its petro dollars to built-up city infrastructure and real estate projects in commercial, residential and retail sectors to provide comfortable living space and modern lifestyle amenities for everyone living and visiting the country. With aim to reduce its dependency on oil export, government has taken several initiatives to improve business, finance and travel and tourism sectors.
UAE has been an ancient trade route for Asian, African and European countries, as it is located on the cross roads of these continent. After observing the rapid progress thorough out different sectors, governmental authorities implemented policies to facilitate foreign investors and entrepreneurs so that they consider making investments in UAE. Moreover, developers also constructed holidaying spots, entertainment and leisure activities to attract tourists across the world. Having considered the business, investment and entertainment opportunities, foreigners or non UAE nationals started choosing UAE as their second home for business, entertainment and career growth.
Why expats are showing interest in buying assets in UAE?
Strategic efforts enabled UAE to drag huge number of expats, travelers and entrepreneurs every year. Developers have constructed a wide variety of short stays and accommodation options to cater the needs of its visitors. Short stays can be rented for few hours to several days, weeks, months or even years. Such options are perfect for those who don’t have plans to stay for longer period of time. Usually second home seekers, investors and entrepreneurs are willing to buy residential and commercial units to accommodate themselves for longer periods of time. The primary reason to think about becoming the property owner in UAE is to save money in long run because rents are tending to rise.
Initially foreigners were not allowed to buy properties anywhere in UAE. What they were allowed to do is to rent or buy properties with 99 year lease. Having considered the interest of expats in buying residential and commercial assets in UAE, Government started thinking to give freehold ownership to foreigners in designated areas all over the UAE. Currently there are no federal property laws in UAE. Rather, emirates have individually developed their own rules and regulation for real estate sector.
Dubai and Abu Dhabi credited to be first to offer free hold property ownership for foreigners
Dubai and Abu Dhabi are the two leading emirates of UAE in terms of business and overall economic growth. It has been observed that most of the expats and foreign entrepreneurs prefer moving to anyone of these emirates for job, business and investment purposes. In fact, Dubai shows a unique mix of 80% expats and 20% locals in its population. It has been recognized as true melting pot of cultures. Dubai is the first UAE emirate which allows foreigners to purchase residential and commercial assets with complete ownerships rights like a local. Furthermore, Abu Dhabi has recently announced in January 2014 to offer freehold ownership for residential assets in specific investment zones of this emirate.
Current Property Ownerships in UAE
Currently there are other property ownership types in UAE. Tenants and buyers are suggested to find the right category accordingly to acquire certain ownership to use property. In addition to in freehold property ownership, other ownership rights include the following types:
Leasehold: It’s kind of contractual right that allows tenant to use existing property without giving any right on the piece on land on which it is built. You can’t sell or transfer lease on your own to another. Leases are issued for 99 years.
Usufruct: It is a real property right, which grants holder to make profits from property which is actually the property of another person. As long as the unit is not damaged or destroyed. Usufruct is usually issued for 50 years.
Muastaha: To some extent is similar to usufruct. It grants user a right to construct the unit to earn profits. Usually real estate developers are more interested to obtain this kind of ownership for their projects.