Dubai has not only been recognized as business and trade hub in the region rather it is also famous for its cosmopolitan environment. Being the abode for expats, the emirate’s population possesses an unusual mix of foreigners and locals. Estimates showed that nearly80% of Dubai residents are non-UAE nationals. Political and economical stability and tax free earnings have pulled attention of foreign professionals, investors and second home seekers towards Dubai. They prefer finding job and investment opportunities here to improve their profits and standard of living. After considering the enormous interest of international investors and buyers, State Government implemented freehold property law to enable foreign buyers to purchase property in Dubai in designated free hold areas.
Freehold Areas in DubaiThe Palm Jumeirah, The Meadows, Emirates Hill, The Springs, The Meadows, Dubai Marina and Jumeirah Lake Towers are the leading freehold areas in Dubai. Only non-GCC nationals are allowed to buy assets in these designated areas.
Buying assets in designated freehold areas enable foreign buyers to become the property owner with complete ownership rights to keep it forever or to resell or transfer to another person in family like genuine owner in Dubai. Freehold property ownership in Dubai can be acquired in different ways. Following are different types of property ownerships in Dubai available in freehold areas.
Individual ownership is extensively acquired entitlement that directly registers property in the name of an individual. Rapid process and simplicity are the major benefits. Buyers are required to go Dubai Land Department with passport to sign documents. A power of attorney can also sign documents for original buyer. Inheritance is the only con of possessing individual ownership as owner will be facing uncertainties of Dubai Courts on issues regarding property. Even for some countries there are certain tax implications on rental income and net capital gains on selling.
Joint Individual ownership married couples are usually acquire this kind of ownership. The benefits are same like the individual ownership. The difference only lies in number of individuals you are dealing with. Rest of the things remains same. Again the cons are same inheritance and taxes on rental income and capital gain. Moreover, if one among the two shareholders is passed away the shares of deceased will passed on to the heirs of deceased not to the surviving spouse.
Traditional offshore company ownership is very suitable for investors that allow entrepreneurs to register assets in the name of their corporate. It protects owners from uncertainty of local succession laws. There are no issues regarding inheritance as the company never dies. It has observed that commonly companies transfer the shares to the buyers in contrast to transferring property. This will let them avoid 2 percent transfer fee for DLD. Besides its advantages, the primary con is the long duration of the process. Lot of paperwork is required along with an amount as set-up fee and annual fees to maintain good position of company in offshore register. Moreover, it is not possible to get assets registered with DLD in the name of offshore company. Only Jabel Ali Free Zone offers this kind of ownership for companies.
Jebel Ali Free Zone (Jafza) offshore company is the latest available option for offshore company holders that allows investors to register assets in the name of company. In year 2011 DLD has issued guidelines to ban new property registrations in the name of foreign offshore companies. They are allowed to buy in the name of Jafza offshore companies. Offshore companies established in traditional offshore jurisdiction can own Jafza offshore companies. Other benefits are same like traditional offshore company ownership. Time and cost are the main cons associated with corporate structures.
After considering the benefits and detriments of these freehold ownership types of property in Dubai, you can choose the best for you. It is advised to consider time frame, cost, taxes and locals laws before making final decision to become property owner in Dubai.