While the market may have slowed over the past year or two, Dubai real estate is still generating impressive returns. Yields in excess of 6% are not uncommon here, making Dubai’s property market more lucrative than many other prestigious cities. London, for example, offers an average yield of 4.4% while New York returns 4%.
Returns like these make Dubai real estate an attractive proposition for investors from every corner of the globe. And where there’s a thriving investment market, so too is there a demand for related services – such as brokerage, property management and development.
What’s more, with the right support, starting any of these businesses is both straightforward and affordable. Here’s everything you need to know to start your real estate company in Dubai.
Whether you wish to start a real estate brokerage business, a property management company or become a developer, there are several steps you need to take before applying for your license.
First, you’ll need to outline your business activity. This will determine the type of service that you are permitted to offer. For example, if you list real estate brokerage as an activity then you are allowed to rent properties, act as a representative for the seller of a property, consult on property sales and lettings and manage property on behalf of owners.
There are many property-related business activities to choose from. As it is vital that your chosen activity aligns exactly with the activities you wish to carry out, it is advisable to work with a company formation expert at this stage.
The next step is to choose a company name. This takes a little more thought in the UAE than in other parts of the world. Why? Because the UAE has a strict, yet easy to follow, set of naming conventions. An expert in company formation can help you make sure you adhere to them.
In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.
The final step before making your license application is to decide whether you wish to establish your business in a free zone or on the mainland.
There are many advantages to both. Free zones such as Fujairah Creative City offer benefits such as a quick and easy incorporation process, ongoing business support and financial incentives such as tax exemptions and zero currency restrictions.
Mainland, on the other hand, allows you to trade directly with the UAE market and take on potentially lucrative government contracts.
The setup that’s right for you will depend on the nature of your business. Again, a company formation expert can advise on the best approach.
With your name, activities and setup type decided upon, you can now make your license application to establish your real estate business in Dubai. If you wish to carry out brokerage or property management services, you will need to apply for a professional services license.
You can make your application either directly to the Department of Economic Development (DED) or to one of the UAE’s many free zones.
Free zones are often the most straightforward and cost-effective way to start a real estate company, and offer many attractive benefits including zero percent personal and corporate income tax and 100% exemption from customs tax. Also, unlike in many other countries, UAE free zone businesses also benefit from the freedom of being able to repatriate all invested capital and profits. There are also no foreign exchange controls or currency restrictions.
As well as your trade license, you will also require additional accreditation in order to operate in the UAE real estate industry.
To gain approval to trade in the real estate market you will need to pass the Certified Training for Real Estate Brokers course with the Real Estate Regulatory Authority (RERA). Once passed, you will be issued with a permit and can start trading.
The cost of obtaining your real estate brokerage license will depend on a number of factors including your specific business activities, and company size and location. In most cases, however, startup costs are usually low.
Should you choose to set up in Fujairah Creative City Free Zone, for example, you can expect to pay in the region of AED 15,000 – AED 25,000 to secure your real estate license. More specifically, the approximate cost for setting up a property management company in Fujairah Creative City as a single shareholder with eligibility for one visa, plus use of the co-working space, would be AED 19,538.
Should you need more employees, Fujairah Creative City offers a range of office space. It’s flexi-desk package – which affords entrepreneurs the use of business facilities such as desk space, mail services and internet and phone use – comes with an eligibility for up to six employee visas.
On top of this, you need to pay the RERA real estate brokers’ course fee of AED 2,500.
Should you wish to set up as a property developer in Dubai, the criteria is rather more strict. At present, RERA only permits companies registered with the DED to undertake real estate development activities to engage in development throughout the UAE. Such companies must be owned 100% by UAE nationals.
While the steps needed to start a business in the UAE are not overly complex, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your business application is complete at the time of submission and free from errors.
To help you ensure that this is the case, it’s a good idea to work with a company formation specialist when establishing a new company in the UAE.
As well as handling your license application, a company formation expert can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
Many also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications that are required to trade in the UAE.
In short, company formation experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to concentrate on what you do best.