Off-Plan Real Estate: Risks and Rewards

Dubai’s real estate market has experienced significant growth in prices in the past few years. The average sales prices for residential properties in Dubai increased by 12% between 2021 and 2022 to reach AED 1,203 per sq ft. This is expected to increase even more by the end of 2023. In this market, off-plan properties appear to be a more affordable option to many purchasers as compared to completed properties. For the end user, low first payments and attractive payment plans mean affordability. This has been an important factor in boosting the off-plan market in Dubai over the past few years.


However, it is critical that prospective buyers do their homework; conduct due diligence; engage a reputable lawyer who understands the off-plan market in Dubai and can protect their rights; and ensure that they purchase a quality off-plan investment.


While the Dubai Land Department (DLD) recorded 14,712 off-plan sales in Q2 2023, memories of the 2008/2009 market crash still loom large. As a result, it is important to be aware of applicable real estate laws.


Legal Protection


Off-plan real estate investment in Dubai is governed by a set of real estate laws and regulations aimed at protecting buyers’ interest, the most important of which are discussed below.


The Interim Registration law (Law 13 of 2008 (as amended)) requires all sales (and all other disposals) of off-plan units to be registered on the interim real estate register maintained by the DLD. If a sale is not registered, it is considered null and void.


The Interim Registration law also governs the developer’s right to terminate a sale contract for an off-plan unit in the event that the buyer defaults, and sets out (i) the termination procedure to be followed; and (ii) the monies that may be retained by the developer in the event of termination which is linked to the percentage of completion of the off-plan unit as follows:


  • if the percentage of completion of the unit exceeds 80%, the developer may retain up to 40% of the price of the unit specified in the off-plan sale contract;


  • if the percentage of completion of the unit is between 60% and 80%, the developer may retain up to 40% of the price of the unit specified in the off-plan sale contract;


  • if the developer has commenced construction work on the project pursuant to the designs approved by the competent authorities and the percentage of completion of the real estate unit is less than 60%, the developer may retain up to 25% of the price of the real estate unit specified in the off-plan sale contract; and


  • if the developer has not commenced the execution of the project for reasons beyond his control and without negligence on his part, the developer must refund all purchase price amounts paid by the buyer.


Furthermore, the Trust Account law (Law 8 of 2007) protects buyers by requiring developers selling off-plan units to be registered with the Real Estate Regulatory Agency (RERA), and to deposit all amounts paid by purchasers into an escrow account with an escrow agent (bank) accredited by the DLD. The amounts deposited in the escrow account are exclusively allocated for the purposes related to the development of the particular real estate project (and directly related activities) and may only be withdrawn by the developer on application to RERA in accordance with the law.


Although off-plan buyers can take comfort in the protections afforded by the legislation described above, we recommend that purchasers check that:


  • the real estate project is registered with RERA;


  • there is an escrow account for the real estate project;


  • the percentage of completion of the real estate project and the expected date of completion;


  • the developer is registered with RERA;


  • the developer owns the land or there is a development agreement between the owner and the developer; and


  • the developer has the required permits and approvals from the DLD and RERA to sell units off-plan in that particular real estate project.


Dubai on the Rise


Dubai’s off-plan real estate laws and regulations serve to increase investor confidence and attract more foreign investment.


With respect to the market, there are attractive deals to be had from developers in Dubai today and off- plan enquiries remain high. However, today’s off-plan buyers should shop around and choose a quality product that will deliver long term sustainable returns, or provide a stable, affordable home.


Dubai remains a very attractive proposition for domestic and international investors alike with globally high rental yields and reasonable prices per square foot. Dubai itself continues to attract hard working and entrepreneurial people from across the world and the prospects of the market are very bright as more people choose to settle and live in the UAE. There is much to be positive about regarding the future of the Dubai property market and the off-plan sector will continue to play a big role in such market. ■

Key clauses in Sale and Purchase Agreement for off-plan properties in Dubai



Off-plan properties are those which are sold in advance of completion and can offer attractive payment plans and potentially high returns on investment. Therefore, the acquisition of off-plan property has always been a favored form of investment for those seeking to profit from the booming Dubai Real Estate market.


However, it is vital for buyers to understand the risks involved. The governing document that is put in place between developers and buyers to regulate the purchase of off- plan property is a Sale and Purchase Agreement (SPA).


In this article we will examine a number of key clauses usually present in a SPA to which buyers should pay particular attention.


Key clauses


1. Completion and Risk


The completion clause present in a SPA typically outlines the date upon which a developer anticipates that a property will be completed. Generally, such a clause will permit a developer to vary this date for specific reasons if required (typically for a period of twelve months). A buyer of off-plan property should keep in mind such obligations under the SPA including financial obligations when reviewing the completion clause as it is necessary for these to be fulfilled by the completion date specified in order for a buyer to take possession of a property.


The passing of risk is also dealt with within a completion clause in a SPA. It is vital that buyers of off-plan property understand fully at what point they will assume rights and responsibilities including risk in relation to a property. The passing of risk occurs upon the handover of a property to a buyer.


2. Purchase Price


A SPA will contain a clause outlining the amount and timing of the purchase payment required for the buyer to acquire a property. A payment schedule is typically attached which a buyer of off-plan property should ensure that they can adhere to as a failure to maintain these payments may result in the termination of the SPA and the forfeiture of sums paid to a developer. This clause may also set out the consequences of a late payment, which would usually involve the application of interest.


3. Handover


A handover clause will specify the condition in which an off-plan property will be handed over to a buyer. A SPA will usually detail the quality of finishes, fixtures and fittings that a developer should provide as well as outlining the process in relation to any defects present in the property and the repair of same. Typically, buyers of off-plan property are permitted to inspect a property in order to identify any deficiencies present. The handover clause is essential to ensure that the buyer receives the property in the agreed condition.


4. Restrictions on Disposals


Buyers of off plan property do not receive a full title deed to a property until completion occurs. Until such time, they acquire the right to own a property once it is completed provided that they comply with their obligations as contained in the relevant SPA.  Many investors often seek to sell off-plan properties during the construction process to take advantage of spikes in property prices. However, it is important to note that developers will usually include restrictions in a SPA that will limit a buyer’s right to dispose of an off-plan property during construction. Such restrictions will usually be linked to a payment of a certain percentage of the overall purchase price for an off-plan property.


5. Termination


The termination clause contained in a SPA will outline the circumstances under which a SPA may be terminated by either party and the consequences of such termination. Termination usually consists of a failure to meet contractual obligations (such as payment), inability to secure financing, insolvency of one of the parties, or any other specified circumstances. Typically, such clauses are drafted in favour of the developer and a buyer of off-plan property should review these clauses carefully to ensure that they understand the circumstances that could give rise to a termination of a SPA and their ramifications.


6. Dispute Resolution


A dispute resolution clause outlines the process for resolving any disputes that may arise between the buyer and the developer. The SPA should specify the method of dispute resolution, such as court, arbitration, mediation, or other forms of alternative dispute resolution. The dispute resolution clause is essential to provide a clear process for resolving any disagreements between the parties. Buyers of off-plan property should be mindful of this clause and ensure that the dispute resolution mechanism prescribed is acceptable.




Acquiring off-plan properties can be a lucrative form of investment, however it is important that buyers conduct the essential due diligence on the specific project, the developer and the SPA before making such an investment.


Given the potential risks involved in such an investment, potential buyers of off-plan property in Dubai should seek the advice of a qualified lawyer in reviewing and explaining the terms and provisions of an SPA prior to signing. ■


Sharjah Law No. 2/2022

What has happened?


On 27 October 2022 Sharjah Law No. 2/2022 was issued by Sultan Bin Mohammed Al Qasimi, Ruler of the Emirate of Sharjah expanding the rights of ownership of real estate within the Emirate to foreigners.
In this inBrief, we look at the implications of this new law and what the expansion may mean for the real estate market in Sharjah.


Previous Position


Previously under the laws of Sharjah, foreign ownership of real estate was limited to the right to hold a usufruct over property in specified areas for a maximum period of 100 years only. Non-UAE or GCC nationals were not permitted to own property on a freehold basis. A usufruct right is a limited right that permits the right holder to use and enjoy land owned by another subject to various contractual and legislative restrictions.


Therefore, whilst foreign nationals could hold such a property right, the right itself was quite restrictive and limited the foreign nationals’ ability to deal with the property. The preclusion of foreign investors from participating fully in the Sharjah real estate market has meant that it has not experienced the same level of growth as that of its neighbor Dubai, which has permitted such investment in designated areas for some time and has experienced a further surge in foreign investment since the beginning of the conflict in Ukraine.


What has changed?


Sharjah Law No. 2/2022 amending Article 4 of Sharjah Law No. 5/2010, has restated the general position that the right of property ownership in Sharjah is limited to UAE and GCC nationals. However, it provides for a number of exceptions whereby the right of ownership can also occur, this includes areas and projects specifically determined by Sharjah Executive
Council. It is anticipated that this will extend to the provision of rights of full ownership to foreign nationals in the specific areas and projects identified. We have summarised these exceptions as follows:


a. transfer by inheritance by virtue of a sharia inheritance notice;


b. through assignment by the owner to one of the relatives up to the first degree, as set forth in the implementing Regulation of the law; and


c. ownership in areas and projects of real estate development, as per the controls determined by the Sharjah Executive Council.




Whilst the specific areas and projects remain to be fully identified by the Sharjah Executive Council, the granting of full ownership rights to foreign nationals is a positive step toward the encouragement of direct foreign investment in the Sharjah real estate market. Foreign investors that have been priced out of the Dubai market due to increasing property prices may now be more inclined to invest in the Sharjah market.


It should be noted that the tested legal and administrative framework that exists in Dubai which provides protection to foreign investors through various laws concerning the ownership and maintenance of jointly owned property, the sale of off-plan properties and the governance of escrow accounts relating to same has not been fully implemented in Sharjah thus far. Therefore, whilst Law No. 2/2022 is a welcome development, it may take some time before a complementary legal structure is in place that will provide foreign investors with the necessary comfort to significantly invest in this market. ■




For more detailed information, please do not hesitate to contact Shahram Safai at

Real Estate, Lexology Getting The Deal Through

This globally relevant Q&A of Lexology, Getting The Deal Through, focuses on key questions centered around Real Estate in the United Arab Emirates. Some topics covered include; foreign owners and tenants, legal liability, planning and land use, investment entities, financing and much more.

Video inBrief: Property Investment Funds in Dubai

In this video inBrief, Shahram Safai, partner, discusses Dubai Decree No. 22/2022 on the approval of the privileges of the property investment funds in the Emirate of Dubai.




Disclaimer: Afridi & Angell’s video inBriefs provide a brief overview and commentary on recent legal announcements and developments. Comments and opinions contained in the video and description are general information only. They should not be regarded or relied upon as legal advice.

Introduction of the requirement to register co-occupants

What’s happened?

Pursuant to a circular issued by the Dubai Land Department on 23 September 2022, the registration of all co-occupants that reside in residential properties in the Emirate of Dubai, whether owned or rented, must be completed today.


Who does this apply to?

The circular issued by the Dubai Land Department applies to real estate developers, real estate leasing and management companies, real estate owners and tenants.


However, based on feedback from the Dubai Land Department, the responsibility for the registration of co-occupants is that of the person occupying the property.


Therefore, to ensure compliance, all applicable parties (specifically owners and tenants) should take the appropriate steps to ensure registration is completed.


Who is required to be registered?

Anyone residing, or who is due to reside, in a residential property for a period in excess of one month (inclusive of all family members and household staff) are required to register with the Dubai Land Department.


How to register?

Registration of a co-occupant’s details can be completed by uploading the same to the Dubai REST App. The relevant property should be selected by the user and the option to “add more” can then be used to insert the details of the additional co-occupants. The co-occupants Emirates ID details/passport number and date of birth are required to be uploaded and verified by using the Dubai REST App.


Similarly, where a co-occupant has ceased to reside in a residential property, a co-occupant’s details can be removed by using the same application.


Potential implications

It is envisaged that the registration of co-occupants could signal a move towards the extension of certain tenancy rights to certain persons legally residing in the property and may eventually enable certain co-occupants to enforce the terms of a tenancy contract against the landlords. Whether or how such rights would extend to household staff remains to be seen.


Similarly, it may also permit landlords to impose the obligations contained in a tenancy contract upon registered co-occupants.


The registration of co-occupants in residential properties would also help deter the practices of subletting without consent and overcrowding of residential units.



Whilst the Dubai Land Department has instructed that the registration of all co-occupants must be completed by today’s date, it is not clear at present what penalties (if any) will apply for a failure by any of the above-mentioned parties to complete this process within the prescribed timeline.


To ensure compliance with the latest Dubai Land Department circular and avoid any potential issues, the responsible parties should ensure the prompt registration of all co-occupants. ■

New Reporting Requirements for Specific Real Estate Transactions

In a joint statement made by the UAE Ministry of Economy and the UAE Ministry of Justice the implementation of the new Anti-Money Laundering reporting requirements, which are set out in Circular No. 5/2022 (the ‘Circular’) and which will apply to specific (cash and virtual currency related) real estate transactions that are conducted in the UAE, was announced over the summer. As outlined in the Circular, these additional reporting requirements are now in force from 1 July 2022.


This joint statement and the additional reporting requirements contained in the Circular are an important sign of the UAE’s concerted efforts to combat the investment of illicit funds in the real estate market and aim to make the policies and procedures in this area consistent with international standards.


Globally, individuals routinely attempt to launder illicit funds through the purchase of real estate assets. The implementation of these additional reporting requirements by the UAE government is intended to curb such activities in this country.


In this inBrief, we look at the additional reporting requirements that shall apply and the implications that they may have on the UAE’s real estate market.


Who is Required to Report?

The Circular applies to real estate brokers and real estate agents licensed in the UAE as the reporting parties in relation to the applicable transactions. However, in the joint statement made by the Ministry of Economy and the Ministry of Justice, it was noted that law firms must also comply with these new reporting requirements (real estate brokers, real estate agents and law firms together referred to herein as the “Reporting Parties”).


Reporting Requirements

Pursuant to the Circular, the Reporting Parties are required to comply with additional reporting requirements where a freehold property is being purchased using any of the methods of financing below:


  • where any single physical cash transaction, or several related transactions, equal or exceed AED 55,000 either as the entirety or a portion of the value of the property;
  • where the method of payment is a virtual asset for either a portion or the entire property value; or
  • where either part or the entire amount of the funds used to finance the purchase were converted from a virtual asset.


Where a buyer seeks to fund a freehold property using any of the above methods, the Reporting Parties must:


  • obtain and record copies of identity documents (Emirates ID or passport) from the party transferring the funds;
  • obtain and record receipts, invoices, contracts and Sale & Purchase Agreements relating to the transaction; and
  • submit a “Real Estate Transaction Report” via the Financial Intelligence Unit’s goAML platform.


Where the buyer is a corporate entity, the Reporting Parties must obtain and record:


  • the entity’s Trade License;
  • the entity’s Articles of Association;
  • register of Beneficial Owners of the entity;
  • Emirates ID or passport copy for all Beneficial Owners of the entity; and
  • Emirates ID or passport copy for all shareholders/partners of the entity.


Further, the Reporting Parties are required to retain all documents and information relating to such transactions as those highlighted above for a minimum period of five years.



The new reporting requirements have placed a responsibility on real estate brokers, real estate agents and law firms to assist in ensuring that the funds being used for real estate transactions are not part of an attempt by the investor to engage in money laundering or the financing of terrorism.


We anticipate that the implementation of the new reporting requirements will enhance the UAE’s ability to protect the country’s real estate market from the investment of illicit funds and provide greater confidence to authentic investors who are looking to invest in the country’s growing real estate market. This in turn, will result in the continued growth of the UAE’s real estate market.




For more detailed information, please do not hesitate to contact Shahram Safai at

Dubai Decree No.22/2022 – On the Approval of the Privileges of the Property Investment Funds in the Emirate of Dubai

What’s happened?

On 22 July 2022 Dubai Decree No. 22/2022 (the Decree) came into force with the purpose of encouraging further investment in the Dubai real estate market via the provision of various incentives and privileges aimed towards real estate investment funds.


In this inBrief, we look at the various privileges that will now be afforded to property investment funds in order to attract further investment into Dubai’s already booming real estate market, as well as giving a brief overview of other key articles contained in the Dubai Decree.


Previous Position

Traditionally, property investment funds were afforded the same property rights as those that were granted to any other investment entity or foreign investor.


However, property investment funds were not commonly utilised as an investment vehicle in Dubai as any change in the fund’s shareholding attracted the standard Dubai Land Department transfer fee. Due to the everchanging nature of many property investment fund’s shareholding this was seen by investors as an onerous burden.


Further, as property investment funds are permitted to be established only under the Abu Dhabi Global Market’s (ADGM) REIT framework (the ADGM Fund Rules), the Dubai International Financial Centre’s Investment Trust Law framework (the DIFC Investment Trust and REITS Rules Instrument), and the Emirates Securities and Commodities Authority’s framework (Administrative Decision 6/R.T of 2019 Concerning Real Estate Investment Fund Controls), property investment funds were not seen as a cost-effective investment method due to the various restrictive regulations that applied to them.



However, now a registered property investment fund will be able to avail of the following privileges:


  • property investment funds will have the right to own property, or the right of usufruct or rental for a duration that does not exceed (99) years in not only where UAE non-nationals are allowed to purchase, but, also in areas where ownership is typically not allowed to UAE non-nationals in the specific areas identified by the newly established Committee of Property Investment Funds;
  • the Decree explicitly states that no Dubai Land Department registration fees shall be imposed upon the property investment fund on the disposition of shares by the shareholders of the property investment fund. This, as noted above, was one of the main factors in discouraging investors from utilising property investment funds as a method for investment; and
  • Dubai Land Department registration fees applied for property purchased by the property investment fund have been reduced from the standard 4 percent of the market value of the property to 2 percent. Similarly, the applicable fee to register a usufruct right or long-term lease has also been reduced to a fee of 2 percent of the market value of the property.


Other Key Articles

Article 4: Establishment of the Register

The Dubai Land Department shall establish a register for the purposes of registration of property investment funds that meet the required criteria outlined below.


Article 5: Conditions and Procedures of Registration in the Register

In order for a property investment fund to be added to the register and thereby avail of the privileges set out above, the following criteria must be met:


  1. the property investment fund must be licensed by the relevant competent authority and hold a valid license;
  2. the value of the real estate assets owned by the property investment fund at the time of submission of its registration application must not be less than AED 180,000,000;
  3. the Property Investment Fund, upon submitting the application of registration in the Register, must not be suspended from trading its shares in the financial markets of the Emirate; and
  4. the relevant registration fee of AED 10,000 must be paid to the Dubai Land Department.


Article 6: Writing off from the Register

A property investment fund can be removed from the register upon the occurrence of a number of circumstances:

  1. it no longer meets the criteria specified in the Decree;
  2. it has been adjudged bankrupt;
  3. upon its dissolution and subsequent liquidation of its assets; and
  4. upon the restriction of its activities by virtue of a final judgement.


Article 7: Duration of entitlement to the privileges

A registered property investment fund is entitled to avail of the new privileges from its date of registration in the above-mentioned register until the date it is removed from same.


Article 9: Committee of Property Investment Funds

The responsibility for the identification of areas where ownership is not permitted to be held by UAE non-nationals and where property investment funds may now have the right of absolute ownership or usufruct or a long-term lease (the term of which does not exceed 99 years) will fall to the newly established Committee of Property Investment Funds (the Committee). In determining which such areas are suitable for investment and therefore available to property investment funds, the Committee shall consider:

  1. the market value of the real estate to be owned by the property investment fund shall not be less than AED 50,000,000;
  2. the real estate shall have an investment return according to the standards of the Dubai Land Department;
  3. the Provisions of Dubai Decree NO. 4/2010 (in the event that the property is, or forms part of, granted land); and
  4. any other considerations as determined by the Director General of the Dubai Land Department.


It should also be noted that property investment funds are required to obtain preliminary approval from the Committee in advance of disposing of its interest in any property acquired in the areas identified by the Committee.


Article 12: Privileges of property investment funds operating in the DIFC

Whilst this Decree applies equally to all property investment funds licensed to operate in Dubai (including those licensed in free zones or special development zones), the extent of the privileges that shall apply to those licensed in the DIFC will be at the discretion of the chairman of the DIFC.



The two key changes ushered in by this Decree (the permitting of ownership of selected real estate within areas where it is typically prohibited for non-UAE nationals to own property and the removal of the Dubai Land Department registration fee upon a change of a property investment fund’s shareholding) are a significant development and an indication that property investment funds may now begin to have a greater impact on Dubai’s real estate market.


We anticipate that the changes that have now been introduced will relieve a number of burdens that would generally apply to property investment funds and encourage investors to re-evaluate property investment funds as a viable investment vehicle.




If you require more detailed information, please do not hesitate to contact us. ■

POD inBrief: Real Estate in the UAE


This episode of Afridi & Angell’s POD inBrief focuses on real estate in the UAE, recent performance, trends, and indicators for the upcoming months.


Shahram Safai, partner at Afridi & Angell and head of the real estate team led the discussion. He represents real estate stakeholders including developers, owners, architects, engineers, contractors and government entities in all stages of the real estate and construction process. In addition to real estate, Shahram represents clients on general corporate matters, private equity, venture capital and doing business in the region.


Listen to “Afridi & Angell’s POD inBrief _ Real Estate in the UAE” on Spreaker.




  • Summary of real estate performance since 2018/2019
  • Current trends in recent real estate transactions
  • Discussion of the upward trends in real estate activity and the high demand for luxury housing and if these trends are here to stay
  • Evaluation of the impact of Dubai Expo 2020 on the economy and real estate in particular
  • Words of advice to investors and end-users looking to buy real estate in the UAE

Booming Market: Real Estate Ownership Rules for Foreigners in Dubai and Abu Dhabi

The real estate market in Dubai has been making significant improvements in 2021 after the successful handling of the COVID-19 pandemic by the UAE. March 2021 had the highest number of transactions in 16 months as well as the highest number of secondary/ready properties transacted for foreigners in a single month since June 2015. This boom in sales resulted in record increases (23 per cent annual increase between April to June for luxury villas). Such developments in real estate activity will most likely translate into positive activity in Abu Dhabi as well.

With the above in mind and such renewed interest, in this inBrief we compare the foreign ownership laws for real estate in Dubai and Abu Dhabi:


Where Can Foreigners Buy Property in Dubai, Abu Dhabi


Foreign investors should familiarise themselves with the two foreign ownership systems that operate in Abu Dhabi and Dubai so that they can make an informed decision when purchasing a property.


Dubai: The general rule regarding nationality requirements to acquire real estate interests in Dubai is set out in Article 7 of 2006 which states that: “non-UAE nationals may, in certain areas determined by the rules, be granted the following rights: (a) freehold ownership of Real Property without time restrictions; and (b) usufruct or leasehold over Real Property for a period not exceeding ninety-nine (99) years.”


The designated areas for foreign ownership of real estate interests are determined by the ruler of the Emirate of Dubai by way of decrees and regulations issued from time to time.


For foreigners, the most attractive designated areas have traditionally been Emirates Hills, The World Islands, Dubai Marina, Palm Jumeriah, Burj Khalifa, Downtown and Business Bay.


However, due to the current global economic climate, foreign investors have now been looking to Dubai’s affordable housing sector which has seen strong returns in communities such as Jumeriah Village Triangle, Jumeriah Village Circle and International City.


Foreigners must make specific inquiries with the Dubai Land Department as to whether foreign ownership is permitted for areas which are not listed above as the list of designated areas is subject to change as previously alluded to.


Furthermore, foreigners should be aware that currently the Dubai Land Department (DLD) does not allow foreign companies to own real estate directly in designated areas; instead it requires foreign companies to own real estate by establishing subsidiary companies in the free zones of: (a) Jebel Ali Free Zone; (b) the Dubai Multi Commodities Centre; or (c) The Abu Dhabi Global Market (ADGM; which we note is a recent development pursuant to a memorandum of understanding dated 10 October 2018 between the DLD, ADGM, and the International Financial Centre in Abu Dhabi).


As of April 16, 2019, the right to own real estate on a freehold basis in the investment areas has been granted to foreigners in Abu Dhabi, according to Law 13 of 2019. The law states, “Non-Nationals, whether natural or legal persons, may own and acquire all original and secondary rights in rem of the real estate existing within the investment areas, and they may conduct any disposition thereof.”


A right of ownership, known as freehold, is considered an original right in rem, while the right to grant a mortgage pledge or lien over that freehold property is classified as secondary rights in rem.


In a move to modernize its real estate laws, on 16 April 2019 Abu Dhabi announced that foreigners are now permitted to own freehold title to real estate within the “investment areas” in Abu Dhabi. Prior to this, foreigners were only able to buy real estate through long term leases of up to 99 years or rights of Musataha or usufruct.


It is expected that this change in the law will contribute to the increasing demand in real estate in Abu Dhabi and level the playing field with Dubai in terms of its foreign ownership rules.


The ten most popular investment areas where foreigners can now buy freehold property are: Al Reem Island; Yas Island; Saadiyat Island; Al Reef; Al Raha Beach; Al Shamkha; Masdar City; Nurai Island; Al Falah City; and Al Maryah Island.


What are the transfer fees payable by foreigners – Dubai vs Abu Dhabi


Dubai: A transfer fee of 4 per cent of the value of the sale contract is payable to the Dubai Land Department to register a transfer of property in Dubai. The fee is the same regardless of whether it is a foreign individual or a company making the purchase.

However, after the registration of the transfer, any change in the shareholding (at any level up to the ultimate beneficial owner) of the foreign company purchaser is considered a transfer of the real estate requiring payment of a further transfer fee at the Dubai Land Department.

Abu Dhabi: A transfer fee of between 1 per cent to 4 per cent of the property value is payable to register a transfer of property in Abu Dhabi. Currently, the Municipality is applying a rate of 2 per cent of the property value (or if higher the property value as assessed by the Municipality). The fee is the same regardless of whether it is a foreign individual or a company purchasing. Post-acquisition, the transfer fee process varies in the different investment areas in Abu Dhabi in respect of how changes in shareholders’ equity of a foreign company are dealt with, and specific inquiries for each investment area must be made.


What permanent residency and long term visas are available to foreign real estate investors – Dubai vs Abu Dhabi


In both Dubai and Abu Dhabi, a 5 year residency visa may be applied for by the investors in real estate in the UAE if the following conditions are met pursuant to Cabinet Decision 56 of 2018:


  • The investor must have invested in one or more properties in the UAE with a total value of no less than AED 5 million;
  • The amount invested must not be derived from the proceeds of a loan. Consequently, it will not be possible for there to be a mortgage over the property if this visa is to be applied for;
  • The property must be owned by the investor for at least 3 years from the date of issuance of the residency visa;
  • The investor must be financially liable for any claims or civil judgements which reduce his/her financial solvency below AED 10 million; and
  • The investor must have a comprehensive health insurance policy covering him/herself and any family members.


In both Dubai and Abu Dhabi, a 10 year residency system called the “Golden Card” is available to the following categories of foreigners in the UAE (and their spouse and children): (1) investors; (2) entrepreneurs; (3) specialised talents; (4) researchers; and (5) outstanding students. Amidst the pandemic, Dubai and Abu Dhabi have seen this visa expand and in particular authorities are encouraging frontline workers such as doctors to apply. The UAE Government Communications Office reported that, since 21 May 2019, the “Golden Card” system has granted a “Golden Card” to 6,800 qualified individuals with approximately AED 100 billion in combined total investments in the first round of applications.

In light of the pandemic, authorities have developed other visa options, such as retirement and remote working, which adhere to work flexibilities. This makes it an idealistic time to secure residency in Dubai and Abu Dhabi.



The new announcement in Abu Dhabi permitting foreign freehold ownership in the designated investment areas, along with the introduction of the 10 year residency and other long-term visa schemes in the UAE, will serve to increase investor confidence and attract more foreign investment into the UAE. Dubai and Abu Dhabi remain attractive markets for domestic and international investors alike with globally high rental yields and relatively low prices.  The UAE’s successful handling of the COVID-19 pandemic has added to such attraction. The UAE continues to attract entrepreneurial companies and people from across the world. There is much to be positive about regarding the Dubai and Abu Dhabi property markets in 2021 and 2022. ■