Understanding Real Estate Law in Dubai for Foreign Investors

As the most populous city in the United Arab Emirates (UAE) and a major global business hub, it's no surprise that Dubai's real estate sector is booming.


Over the past few decades, Dubai has seen significant growth in its property market and it is now an important part of the UAE economy.


The laws about buying or renting a home in Dubai can be difficult to understand. It is crucial to take your time and learn them if you want to buy or rent a property there.


It's important to take into account the foreign ownership regulations and rules set out by the Dubai Land Department (DLD), as well as other relevant statutes and regulations.


In this article, we provide an overview of real estate law in Dubai so you can feel confident when making your next property investment.


Who Can Buy a Property in Dubai?


Dubai's real estate sector is open to both locals and foreigners, making it a popular investment destination. There are two types of property ownership: Freehold and Leasehold.


Freehold Ownership:This type of ownership grants complete control over the property and is available to both citizens and expatriates. Prime locations like Downtown Dubai, Dubai Marina, Palm Jumeirah, JBR, and Emirates Hills fall under this category. Foreigners can own 100% of the property without the need for a local sponsor.


Leasehold Ownership: Areas outside of designated freehold areas such as DIFC are known as leasehold areas. Only UAE and GCC nationals can own properties in these areas, but foreigners can still lease properties for up to 99 years.



If you are a non-UAE resident and want to buy property in the country, it is possible to do so even without a residency visa.


You also have the option of applying for a property investor visa, which will allow you to become a UAE resident. This visa is renewable every two years and is granted by the Dubai Land Department.


Once you obtain this visa, you will be eligible to receive an Emirates ID, a driver's license, and even sponsor your family members.


However, to obtain this visa, you must purchase a residential property that is valued at least Dh1 million (€260,000).


Can non-residents buy properties in Dubai?


If you are neither a UAE national nor a resident, you can still buy a property on a freehold or leasehold basis. Additionally, you don't have to travel to the UAE to complete the purchase and registration process. Instead, you can appoint someone to act on your behalf by issuing a power of attorney (PoA).


If you're considering buying a property as a non-resident, you will need to open a savings account with a local bank.


This account will be used to transfer the funds required for the purchase. The process is straightforward, but you must meet the bank's criteria, including the latest proof of funds and AML regulations.


Opening a local bank account has its benefits, as all related fees can be paid from that account. Alternatively, you can choose to buy off the plan with a reputable developer who has a project escrow account facilitated by the Dubai Land Department (DLD).


Can foreigners’ own property and rent it out in Dubai?


It is important to note that as a foreigner, you have the freedom to own and rent out property in Dubai. Being a hub for real estate investment globally, Dubai has a vast selection of properties, which are available for purchase or rental.


The city is known for its high return on investment (ROI) in the real estate business. Investors can expect rental yields to range from 5-9% in many of the in-demand residential communities in the city such as Dubai Marina, The Palm Jumeirah, and Downtown Dubai.


Real Estate Laws and Regulations in Dubai


One important aspect to consider is deposit requirements and payment structures. To secure a property, you'll typically need to deposit 10-20% of the total property price. It's important to understand the payment structure to ensure smooth financial transactions.


Another vital legislation is Property Law Number Seven. Enacted in 2006, this law brought significant changes to property ownership rights for expatriates. It opened doors for non-residents to own property either on leasehold or freehold basis, marking a new era in property ownership.


Rental Property Laws in Dubai


Dubai's rental market is dynamic and caters to residents and expatriates. If you're renting property, understanding your rights and responsibilities is crucial. Here are important points to consider:


1. Contract Duration and Rent Increases:

   - Rental contracts in Dubai usually last for one year, providing stability for landlords and tenants.

   - Rent increases during the contract duration are regulated to ensure fairness for both parties.


2. Municipal Rental Control Committee:

   - The municipal rental control committee plays a crucial role in resolving disputes and safeguarding tenant rights.


How Does Inheritance Property Law Work in Dubai?


If you're a non-Muslim property owner in Dubai, you can also register a will under Dubai Wills Law and DIFC WPR Rules.


This is especially important if you want to ensure that your assets are distributed according to your wishes after your death.


To register a will, you must be non-Muslim, meet validity conditions, nominate an executor, witnesses, and have unaltered text.


For those who qualify, the DIFC WPR Rules define "Estate" and "Estate Property" for will inclusion. It's worth noting that for Muslim expats, assets are distributed according to Sharia law.


This means that if you're a Muslim and living in Dubai, your assets will be distributed according to Islamic inheritance laws.



Dealing with real estate involves following many laws and regulations. These encompass environmental regulations and disclosure requirements.


Moreover, real estate transactions often come with substantial taxes, fees, and other costs that can complicate buying or selling property.


To ensure a smooth real estate transaction, it is advisable to conduct thorough research on different aspects of real estate laws. If you have any questions, don't hesitate to ask, and consider seeking assistance from experienced legal counsel, such as our local legal team at D'Andrea & Partners Legal Counsel. Their expertise in these matters will help guarantee a seamless experience for your next transaction.


The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D'Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.

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