Dubai: Property brokers will be able to have full ownership of their companies in the UAE from now on, as this business activity has been removed from the ‘restricted list’. Since the real estate sector plays a significant role in UAE economic and financial development, industry sources view the decision as ground-breaking.
As a result, Dubai’s property market will be the most affected, especially at a time when buyer and seller activity is building. “What the change means is that a property brokerage firm can be 100 percent owned by a foreign national though a local UAE national is required to act as a service agent,” said Atik Munshi, Managing Partner at the consultancy Enterprise House UAE.
“In Dubai, while registration with RERA (Real Estate Regulatory Agency) is required, taking the RERA-sponsored examination is not compulsory for the business owner.”
In addition, the UAE has changed the requirements for investor visas on property assets so an owner of a Dh750,000 property can get a three-year visa. Previously, the requirement was Dh1 million for two years.
Full ownership opening-up
UAE – both at the federal level and in individual emirates – has recently announced the list of businesses where foreign nationals are permitted to own 100 percent of their enterprise and not have a UAE national partner hold a majority stake.
But property brokerage services remained in the ‘restricted’ category – that has changed now.
According to Jonathan Davidson, founding Partner at the DIFC-based law firm Davidson & Co. “As and when this amendment, is enacted there is likely to be a lot of those brokers seeking to change their historical ownership structure. It is noteworthy that to do so will require the full agreement and sign-off of everyone involved whether they have been running the company or acting as a de facto nominee.
“So, there are likely to be a lot of interesting conversations in the real estate world in the coming months, especially with the recent near meteoric rise in house prices in some parts of the UAE.”
“Some of the activities not mentioned in the restricted list may be 100% foreign owned though they require approval from ministries. Activities like audit, legal, healthcare, education, engineering consultancy, etc., too are termed as restricted business activities.” – Atik Munshi of Enterprise House UAE
A tight lookout
All brokerage firms in the UAE are overseen by the Dubai Land Department and RERA, which enforce strict standards of transparency. In order to practice here, brokers also need to meet certain minimum qualifications.
“There are well over 2,000 real estate brokerage companies in Dubai – all of which currently have a local or Emirati ownership structure due to existing legislation,” said Davidson. :A lot of these brokerages are run by expat stakeholders.”
