Starting a Real Estate Business in Dubai, UAE (2024-25): Complete Guide

Overview: Starting a Real Estate Business in Dubai, UAE

Dubai has developed as a top destination for international real estate investment. Establishing a real estate firm in Dubai can be a profitable investment due to its strategic position, world-class infrastructure, and competitive tax regulations. However, before entering this competitive industry, it is critical to grasp the legal, regulatory, and licensing processes involved. In this detailed guide, we will go over the licenses needed to work in the real estate industry and provide step-by-step directions on how to start a real estate business in Dubai.

How to Start a Real Estate Business in Dubai, UAE?

The following steps to start a real estate business in Dubai, UAE includes:

1. Deciding Business Location

When choosing the location for your real estate business, it’s important to consider factors such as accessibility to the market and the benefits offered by different economic environments. Dubai offers three options for real estate companies: mainland, free zone, and offshore.

2. Select Your Business Activity

Next, you need to determine the specific business activities your real estate company will engage in. Dubai offers various options, including professional companies, sole proprietorships, limited liability companies (LLCs), partnerships, and more.

To move forward with your business, you must outline your chosen activities, as they will determine the type of license you need. For example, if you plan to run a real estate brokerage or property consultancy, you must include these activities in your license.

3. Choosing a Business Name

When selecting a name for your real estate company, it’s crucial to adhere to the naming parameters set by the UAE. The guidelines are straightforward and mainly involve avoiding offensive language and using the names of well-known organizations. Consultation with experts can help ensure compliance with naming rules.

4. Getting RERA Certification

To qualify for a real estate license in Dubai, you must register for the Dubai Real Estate Institute’s Certified Training for Real Estate Brokers course (DREI). Successful completion of this course is necessary for the license-issuing process. After passing the course, you should obtain a Good Conduct Certificate from Dubai Police.

You also need to contact the Real Estate Regulatory Agency (RERA) to obtain your broker ID, which allows you to legally operate as a real estate agent in Dubai. It’s important to note that RERA broker IDs are required in Dubai, as each emirate has its own real estate licensing body. License renewal is an annual requirement.

5. Memorandum of Association

According to the UAE Commercial Companies Law, companies must include an object clause in their Memorandum of Association (MOA). This clause specifies the purpose of the company and lists the economic activities it intends to undertake. Any actions outside the scope of the object clause may be considered voidable and could result in penalties and legal consequences.

The MOA is a legal document prepared during the incorporation process and defines the company’s relationship with its members and the general public. It must be prepared in accordance with the protocols of relevant authorities and notarized.

6. Applying for Trade License

Once you have completed the initial steps, you can proceed with applying for your trade license. Free zone trade licenses are obtained from the respective authorities, such as Meydan Free Zone. The license application requires the submission of various documents, and you will need to obtain a professional services license if you plan to offer property management or brokerage services.

Additionally, you must register your real estate brokerage company with the Department of Naturalisation and Residency Dubai (DNRD) and the Ministry of Labour (MOL) to employ foreign employees and sponsor their visas. Visa processing involves fitness tests, blood tests, chest x-rays, and the submission of relevant forms and documents.

7. Getting Approval from Dubai Land Department

Before operating a real estate brokerage business in Dubai, you must obtain approval from the Dubai Land Department (DLD), the government body responsible for overseeing real estate activities in the UAE. Compliance with DLD requirements is essential to ensure the legality of your operations.

Documents Required to Register a Real Estate Business in Dubai, UAE

The list of documents required to open a real estate business in Dubai is mentioned below:

• Initial Approval and Name Reservation: Apply through the Dubai Department of Economic Development (DED) with your proposed company name and business activities.
• Trade License: Issued by DED, this permits legal commercial operations in Dubai.
• Memorandum of Association (MoA): Outlines the company structure, share capital, and shareholders.
• Articles of Association: Defines the company’s internal governance and regulations.
• Police Clearance Certificate: For all company owners, obtained from Dubai Police.
• Office Lease Agreement: Proof of securing an office space within Dubai.
• Real Estate Brokerage License: Issued by Dubai Land Department (DLD) for real estate transactions.
• RERA Preliminary Approval: Obtained after submitting company documents and shareholder details.

Licenses Required to Start a Real Estate Business in Dubai

The list of licenses required to register a Real Estate Business in Dubai is as follows:

• Trade License: The first and most critical license required to start any business in Dubai is a trade license. This license, issued by the Department of Economic Development (DED), permits you to conduct commercial operations legally in the emirate.
• Real Estate Brokerage License: To operate a real estate firm in Dubai, you must first obtain a real estate brokerage license from the Dubai Land Department (DLD). This license is required for all real estate brokerage firms and assures that you can legally conduct real estate business activities in the UAE.
• Commercial License: If you intend to represent buyers or sellers on their behalf, you will require a commercial license. This license enables you to handle property transactions on behalf of your clients.
• Ejari Registration: Dubai has a system called Ejari that oversees rental agreements. All landlords and property owners must have their tenancy agreements registered with Ejari.
• RERA Certification: The Real Estate Regulatory Agency (RERA) controls Dubai’s real estate industry. To work as a real estate broker or salesperson, you must be RERA accredited. This certification shows that you have the appropriate qualifications and follow the RERA regulations.

Why Start a Real Estate Business in Dubai?

Some of the compiling reasons to start a real estate business in Dubai are mentioned below:

• Thriving Real Estate Market: The real estate market in Dubai is still booming and has a lot of chances. From luxury apartments and commercial spaces to prime lands, there’s a market for every niche.
• Strategic Location: Dubai offers a key location for international commerce because of its location at the intersection of Europe, Asia, and Africa. Its connectivity, through a world-class airport and major shipping ports, makes it a prime spot for trade.
• Corporate-Friendly Environment: Dubai is known for its pro-business policies, minimal taxation, and robust legal system. The government has taken significant steps to attract foreign investors and entrepreneurs.
• Exponential Growth: Dubai is a rapidly growing city with ambitious development projects, ensuring that the demand for real estate remains high. As the city expands, so does the potential for your real estate business.
• Tax Benefits: One of the best tax climates in the world is available in Dubai. With no personal or corporate income taxes, you retain a larger portion of your earnings.

Benefits of Starting a Real Estate Business in Dubai

There are several benefits of starting a real estate business in Dubai. Some of them are mentioned below:

• Booming Real Estate Market: Dubai’s real estate market is one of the most desirable and continuously expanding marketplaces in the world, offering numerous opportunities for real estate companies to thrive.
• World-Class Infrastructure: Dubai has made significant investments in developing its transportation, communication, and utility infrastructure, creating a modern and technologically sophisticated environment that supports real estate business operations.
• Stable and Diverse Economy: The real estate sector is heavily emphasized in Dubai’s stable and diverse economy, with the government taking measures to ensure the market remains stable and transparent.
• Ease of Doing Business: Dubai offers a supportive regulatory environment for businesses, including simplified licensing processes, a solid legal framework, and various policies to facilitate company operations.
• Tax Advantages: Dubai has a tax-friendly environment, with no personal income taxes, corporate taxes, or capital gains taxes, making it an attractive destination for real estate investors and businesses.
• Strategic Location: Due to its advantageous location between Europe, Asia, and Africa, Dubai serves as an important global economic hub, providing real estate companies easy access to a large pool of potential clients and partners.
• Diverse Investment Opportunities: Dubai offers a wide range of real estate investment opportunities, including residential, commercial, and hospitality properties, catering to various investor preferences.
• Rising Demand for Properties: Dubai is experiencing a steady increase in demand for properties due to population growth, urbanization, tourism, and business expansion, providing ample opportunities for real estate businesses.

Cost of Setting up a Real Estate Business in Dubai, UAE

• The cost of opening a real estate company in Dubai starts from AED 21,000, with the cost of a real estate brokerage license for an LLC being approximately AED 12,950.
• RERA charges AED 5,020 per activity, and an LLC license costs around AED 12,950.
• The financial commitment for initiating a real estate company in Dubai begins at USD 5,718 (AED 21,000), with the LLC license fee starting at USD 3,526 (AED 12,950).
• The estimated budget for starting a real estate business in Dubai is approximately over AED 27,000, which includes the cost of the license voucher and additional fees like external RERA approval, online courses for brokers, and the broker exam.

Conclusion

Starting a real estate business in Dubai is an enticing opportunity that offers immense potential for entrepreneurs and investors. The city’s thriving real estate market, business-friendly environment, and strategic location make it a top choice for those seeking high returns on their investments. With the support of experts like OnDemand International, you can handle the setup procedure with assurance and convenience.