Entrepreneurship is a demanding game that keeps you on your toes all the time. To guarantee that everything goes properly and the firm succeeds, you must put in a lot of effort. Finding adequate premises to set up and manage your business activities is an important component of this endeavor. Renting a commercial space in Dubai is one of the many hurdles of starting a business in Dubai. For those of you who are just starting out in business, here is our beginner’s guide to renting commercial premises in Dubai.
What to Do Before Renting a Commercial Property in Dubai?
The pre-leasing phase, the after-leasing phase, and rental payments are all covered in our guide to renting a commercial property in Dubai. So, let’s get this party started!
Are You Eligible for Renting a Commercial Space in Dubai?
You must first determine your eligibility for renting commercial apartments before starting your brick-and-mortar firm. Remember that you can only rent a business property in Dubai if you have a current trade license.
Obtaining a trade license also allows you to limit the places in Dubai that provide various forms of commercial property. The authority that issues the license is determined by where you intend to open your business. The Dubai Economic Department is in charge of issuing all onshore business licenses.
Let’s say you wish to start a business in a tax-free zone. In that instance, the relevant free zone authorities, such as Dubai Silicon Oasis (DSO), Dubai Multi Commodities Centre (DMCC), and others, issue the license. The following are the basic prerequisites for starting a business in a free zone.
Find the Right Location to Rent Commercial Property in Dubai for Your Business
When renting offices in Dubai, there are various factors to consider. Different commercial licenses are also accessible for persons who run businesses in Dubai. You must determine the ideal regions to rent commercial property in Dubai for your business based on your license.
If you have a TECOM-free zone license, for example, you must have your business workspace at the same location. You should also think about the following:
- The business’s feasibility from the place of your choice.
- If your space is a showroom for walk-in clients, consider the area’s accessibility for the target customers to generate enough footfall.
- A sufficient amount of parking space for the number of staff one has.
When it comes to determining where to rent office space in Dubai, research is crucial. Put in the work based on your trade license before obtaining a commercial location in Dubai.
Office Type and Employee Visas
Companies are permitted to give foreign workers visas depending on their qualifications. However, depending on the style of the workplace and the amount of space available, this privilege is limited:
- A corporation operating in a Flexi-desk environment may be granted up to three visas (shared office).
- A corporation with a serviced office can get up to five visas.
- A corporation that operates in a physical location can apply for visas based on the area of their office that is covered. For every nine square meters, one visa can be filed for.
Get Professional Advice While Renting Commercial Properties in Dubai
If you wish to rent an office in Dubai, you should speak with a real estate agent first. When renting commercial premises in Dubai, several conditions must be followed, particularly in the food and beverage business and the healthcare sector. Even though your company is unique, working with a real estate agent is still suggested because:
When it comes to renting commercial property in Dubai, they can provide you with sound assistance.
Their understanding of the typical asking price, market trends, and other important facts puts them in a better position to bargain on your behalf and close the best transaction possible.
While having a real estate agent on your side can be advantageous, make sure you do your research. Prepare a list of questions about the potential workplace for rent in Dubai before meeting with the agent. Consider the following crucial elements:
- The number of cheques for rental payments
- Access to public transport
- Required permissions, etc.
Make Sure All the Required Documents are in Order
In Dubai, there are specific guidelines for the use of commercial premises. You can’t utilize your workplace as a warehouse and vice versa. As a result, you should have all of the relevant paperwork in order. This includes, but is not limited to, the following:
- Proof of business ownership
- The status of the premises
- Compliance of the premises with the existing plans
- The necessary permits to use the premises
Ejari regulates all real estate transactions in Dubai, including commercial rentals. To avoid future disagreements, it’s critical to ensure that all contractual terms and conditions are clearly stated in the contract.
If the business property you want to rent in Dubai requires any changes, such as the installation of cubicles, make sure it is specified in the contract. Ensure that all information about your company, including its nature, is appropriately recorded so that there are no misunderstandings.
Factor in your Budget
One of the most crucial things to keep in mind while hiring a commercial space in Dubai is your budget. Before making a selection, you must evaluate the size of the security deposit as well as any other charges related to the property.
Also, use the RERA Rent Increase Calculator to research future rent increases so you don’t receive any unpleasant surprises when it comes to renewing your leasing agreement for your office in Dubai.
Types of Lease Agreements
You can agree upon four common types of lease agreements in Dubai.
In a gross lease, the tenant is responsible for paying a pre-determined monthly rent, while the landlord is liable for all other costs such as insurance, taxes, and upkeep.
The renter, as the term implies, pays for the land on which a building will be constructed to conduct business. The land and building are returned to the landlord at the end of the lease.
TRIPLE NET LEASE
The renter is responsible for taxes, insurance, upkeep, and rent under a triple net lease. The landlords benefit from this sort of lease.
MODIFIED NET LEASE
All expenses are split between the tenant and the landlord in a modified net lease. In Dubai, this is a very typical method of renting commercial property.
What to Do After Renting a Commercial Property in Dubai?
Here’s what you need to do once you’ve found the suitable business property for rent in Dubai and signed the lease:
Make the Right Arrangements Once You Have Signed the Lease
Following the signing of the lease for commercial properties in Dubai, you must:
- DEWA can provide you with electricity and water connections.
- To maintain business continuity, get property damage insurance.
- Make provisions for the workplace space’s interior décor. If you’ve rented a shell and core property, you may need to engage a professional. You can look into hiring one of Dubai’s best interior design firms for the job. After all, when renting commercial property in Dubai, it makes sense to present it in a professional manner to potential consumers.
While you’re at it, factor in the costs of all of these things when planning your business leasing budget in Dubai.
Changing the Property Interiors
It’s not required, but if you need to make internal changes, make sure they’re done correctly. To begin, the condition should be included in your rental agreement and agreed to by the landlord.
After that, you must obtain a Non-Objection Certificate (NOC) from the following:
- The landlord
- The building Manager/Developer
- Dubai Municipality or Free Zone Authority
Remember, when renting a commercial space in Dubai, you cannot make changes to the property without permission.
Sub-letting Dubai Commercial Property
“Is it legal to sublet business property in Dubai?” you might wonder. The answer is yes. With the landlord’s formal permission, you can sublet your office space in Dubai. To minimise misunderstandings and disputes, it’s important to include a sub-letting clause in the lease contract before signing it.
Early Termination of a Commercial Rental Lease in Dubai
In Dubai, a commercial property lease typically lasts one year. The renter and the landlord might mutually agree to discontinue the lease after a year. If they do not opt to stop or amend the contract, it will be automatically renewed for another year.
You may be penalized if you choose to end your contract early to rent commercial property in Dubai. In this instance, the landlord has the right to seek compensation for the losses sustained as a result of the failure to complete the contract period. This could take the form of two months’ rent. Both parties can take their case to Dubai’s Rent Dispute Settlement Centre if there is a substantial disagreement.
Paying Rent for Commercial Property in Dubai
Regardless of the sort of property, you’re leasing, the majority of rental payments in Dubai are done by cheque. Commercial property checks can be written from the owner’s or company’s bank accounts.
Rent can be paid with one or many checks, depending on the agreement between the landlord and the tenant. A security deposit of 5% of the rental contract’s rent is also required.