Evolution of real estate in the desert state and the concept of freehold property in Dubai
The United Arab Emirates real estate industry has established itself as the Middle East’s success story, drawing in significant numbers of global investors. The seven emirates that make up the UAE—Abu Dhabi, Ajman, Fujairah, Dubai, Ras al Khaimah, Sharjah, and Umm Al Quwain—were established in 1971.
Every Emirate does have its own laws governing real estate (and other things), but the Emirate of Dubai has taken the lead in the area by modernizing its real estate rules and legislation. These laws and procedures are meant to attract inward incentive to invest by starting up the market to international investors and offering definite protections to venture capitalists and end users.
Dubai is a renowned global commercial hub because to its advantageous location halfway between Asia & Africa and only a few hours’ flight from Europe. The Govt of Dubai has aggressively worked to strengthen the economy reduce its dependence on oil earnings and has concentrated on supporting a few key vital businesses in the Emirate, such as tourism, healthcare, and schooling, each of which generates unique real estate demands.
Elevated concentrations of foreign direct investment into the Emirate have also been a result of the rapid advancement of Dubai’s commercial “free zones,” which provide full foreign owners of property and a tax-free guarantee for such companies. This has led to an attractive growth of real estate, both residential and business.
The UAE also benefits from having a high standard of life in a secure environment and from its political stability. For these and other causes, the UAE has been successful in luring a sizable number of foreign workers to supplement its modest indigenous population, which has again resulted in strong demand in the country’s real estate market. By 2020, it is anticipated that Dubai’s population will reach 3 million.
Property Ownership: Freehold
The most full and comprehensive right to real estate accessible in Dubai is freehold, sometimes known as “absolute” ownership, which is similar to the common law notion of freehold. Such ownership is subject to restrictions depending on nationality in Dubai.
Prior to 2006, Dubai’s laws prohibited foreigners from owning real estate there. A “freehold” law was introduced in 2006 that allowed non-Gulf Cooperation Council (“GCC”) nationals and businesses owned partially or entirely by them to purchase a freehold asset in the real estate in Dubai areas that the Benevolent Monarch of Dubai (His Excellency Sheikh Mohammed) had designated as being open to foreign ownership (“Designated Areas”). Saudi Arabia, Bahrain, Kuwait, Oman, and the UAE are among the GCC nations.
UAE residents, GCC nationals, businesses completely owned by GCC nationals, and publicly traded firms are all able to acquire freehold land in Dubai (as per the UAE law).
To be legally recognized, all real interests must be registered with the Dubai Land Department (DLD). The DLD produces a title certificate, which is unquestionable proof of ownership, upon registration.
Freehold interests may be owned jointly, and the title certificate granted by the DLD will indicate the percentage of ownership held by each partner.
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