The UAE has one of the world’s booming real estate markets. The region features almost every kind of development from dormitories to high rises and luxurious gated communities, it really is one of the most diverse places on earth to set up your very own real estate business. This blog seeks to equip you with the basics of how to get about with setting up your new venture so keep reading to find out more.
When it comes to setting up your real estate business in the UAE, you have three main options for business setup. Let’s break it down further!
Dubai Mainland
Forming a Dubai Mainland company is a relatively straightforward and easy to navigate process. A few steps are involved and they are outlined below:
The first thing which you have to do is of course, getting your documentation together. This will include a passport copy and passport size pictures of the shareholders.
Next, you would need to book your trade name, which is actually the name of your company. When choosing a name, you must be sure to follow all the guidelines and naming conventions.
After this, we can seek the initial approval from the relevant authority. All shareholders of the company who will be listed in the license will be subjected to this initial approval.
Working on the Memorandum of Association will follow and this is similar to what is required in other countries as well. Simply put, this document will outline all the powers of the shareholders including what they can do in the company, their shareholding structures, shareholding percentage and the capital they are bringing in.
Let’s take this opportunity to address a common misconception about Mainland company formation, being that one has to visit government centers in person to get the ball rolling, when in reality, everything can be done online, even before you first set foot in Dubai.
After the MOA is sorted, the next step would be to arrange an office space. You have two options, either you can go for a virtual office or you can go for a proper office space. SetHub has a database of popular locations from stand alone office complexes to co working spaces so reach out to us to find the solution.
Finally, you would have to obtain RERA (Real Estate Regulatory Agency) approval, which costs AED 5,500. The approval process will take around a day to complete.
Once this is complete, your trade license will be well on its way to you as you have now been greenlit to get to work in Dubai.
Free Zone licenses
While they may seem more cost effective, most real estate startups prefer to go for a mainland license due to the reasons listed below:
Free Zone companies cannot get a BRN (Broker Registration Number), which is needed when dealing with primary market developers. If your business buys and sells properties from developers, you need a Mainland license to obtain a BRN and be onboarded by developers.
In summary, Free Zone licenses work for specific activities like property consultancy or self-property management but not for buying and selling brokerage in the primary market.
BRN and ORN explained
A BRN is necessary for working with developers and engaging in primary market activities. Free Zone companies get an ORN but not a BRN, which means they can’t engage with developers for primary market sales. Mainland companies, however, can obtain both BRN and ORN, allowing them to work with developers.
Sharjah as an option for setting up a real estate business
It’s an investor’s call. If you’re interested in properties in Sharjah or Northern Emirates, you can form a company there. This market too seems to be very promising, as is everything in the UAE! However, for selling Dubai properties, a Mainland company is necessary.
Something to take note of
If you buy a property in the UAE, you have two options. You can register the property under your personal name or under a company name. You might think that registering under a company name might be considered as a real estate business, but that is far from true. Registering a property under a company name does not automatically classify it as a real estate business. It could be any type of business, such as real estate consultancy or self-property management.
FAQs
What’s the cost?
The cost depends on the business activities chosen but typically starts from 30,000 AED for buying and selling brokerage. SetHub can help you narrow your cost further after understanding your exact requirement.
Is there any examination required?
No, the examination requirement was abolished after COVID-19. Only external approvals are needed.
What’s the time frame for getting the license?
Typically, 3 to 4 days. This includes trade name booking, initial approval, MOA, and external approval.
Time frame for the Visa?
Normal process takes 7 to 10 days, while the VIP process takes 2 to 3 days. This applies across Dubai Mainland, Free Zone, or Sharjah.
What are the legal structures available for real estate companies?
You can choose between a sole establishment (for single owners) or an LLC (for multiple shareholders). An LLC allows for as many shareholders as needed.
Are there any specific activities for real estate companies?
Yes, activities include consultancy, property management, and buying and selling properties. Property management for self-ownership is also covered under real estate activity.
How can SetHub help?
SetHub has assisted many real estate startups in UAE with their ascent to the top, and yours would be no exception. We understand that the real estate game comes with its own complexities, and we are equipped to handle your questions and concerns. Whether a complete business setup package is what you seek, or if you just need some more information on whether to go with the Mainland or Free Zone option, we are here to help! Reach out to us now and hear back within one business hour.
