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It is now possible to purchase properties in Dubai with a RAK offshore company

8 August 2019

In a recent development, businesses individual shareholders registered in RAKICC (Ras Al Khaimah International Corporate Centre) may now own properties in areas of Dubai designated as freehold. [..]

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تابع القراءة

It is now possible to purchase properties in Dubai with a RAK offshore company

8 August 2019
In a recent development, businesses individual shareholders registered in RAKICC (Ras Al Khaimah International Corporate Centre) may now own properties in areas of Dubai designated as freehold. Previously, a Dubai trading license was required; this restriction is now lifted. This current agreement with the Dubai Land Department is expected to enhance the already buoyant property market.

The new measure, introduced on 16th July, creates greater flexibility for property holding regulation. Previously, only Jebel Ali Free Zone (JAFZA) Offshore Company permitted freehold property ownership.

What are Dubai Freehold Areas? And What is RAKICC?

In Dubai, freehold areas are those zones where non-UAE citizens may buy real estate and properties. They are listed in Article 4 of the Regulation No (3) of the 2006 Determining Areas for Ownership by Non-UAE Nationals of Real Property in the Emirate of Dubai.

RAKICC is responsible for registering and incorporating international businesses in Dubai and providing a range of other registry services. Their desire to strive for innovation in this sector in the face of the changing global market is a constant driver of current adaptation.

The latest changes follow a Memorandum of Understanding (MoU) between RAKICC and the Dubai Land Department (DLD). Following, any business registered with RAKICC may now own freehold property in any of Dubai’s 23 freehold zones.

How Can a Business Own Property in a Dubai Freehold Area?

From the date of commencement, DLD accepts freehold property ownership registration and all associated rights. For approval of ownership, the company based in RAKICC must submit a “No Objection Letter” to DLD. This simplifies a previously complex issue.

Permission is granted if the company is considered in good standing, has individual shareholders only and is duly registered. Finally, the company is required to submit a resolution to RAKICC with details of the property registration.

However, the DLD may reject an application if the applicant is not deemed fully compliant with DLD rules. Certain documents are required in the application, submitted in Arabic:
  • Relevant incorporation certification and the business’ trade license
  • A certificate of incumbency valid for six months
  • A Good Standing certification
  • The business current memorandum, and all relevant Articles of Association, including all amendments
  • Formal identification forms and documents
  • A No Objection Certificate (NOC) from the developer. This must be valid for at least a month
The MoU is presently not legally binding. The relevant regulations and rules of the Dubai free zones are still pending the relevant amendments and it is unclear at present have RAKICC will handle registered properties.

Boosting the Dubai Free Zone Property Market

Last year, JAFZA introduced new Offshore Companies Regulations. They defined how offshore companies may hold a property lease for use as a registered office. It also established how they may own properties in designated UAE freehold areas, subject to government approval.

It is expected that RAKICC or DLD will shortly offer guidance. Based on current understanding, the DLD applies a transfer rate of 4% on property sales and on purchases. Similarly, a 0.125% rate applies to gifts.

Whatever happens, these measures have been enacted with the expected benefit of boosting the real estate market in the freehold areas. Going forward, RAKICC registered companies may now be used for holding property in Dubai freehold areas. This removes the previous requirement to hold a commercial or trade license.

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