DUBAI PROPERTY PURCHASE & CORPORATE OWNERSHIP

I am considering buying a property in Dubai, and I do not know the area at all, is it a complicated process?

There is so much property activity now in Dubai that the process has become very regulated and relatively straightforward. As long as you deal with well known and reputable intermediaries, then your only problem will be the choice of property.

Do I have to be a UAE resident to buy property in Dubai?

No, you can be a non-resident and still own property. Most of the developers will accept funds from non-resident individuals or offshore entities to purchase property. Local law has been changed to allow foreign ownership.

You mention 'offshore entities' - what is the main benefit of owning property through an offshore company. Is it not better to have the house or appartment in my own name?

Laws in Dubai are not the same as in the UK or EU, in particular with regard to inheritance laws. When a foreigner who owns a Dubai real estate passes away the laws of the owner's home country should appply. There have been cases, however, where Sharia law has been considered. Under Sharia law, upon death of a property owner, the property is generally transferred to the eldest male sibling. If you do not have a male sibling then the property forms part of the state, and it is then up to an executor to go to court and get a ruling on whether or not this is correct.

A property owned by an offshore company would not be subject to Sharia law in relation to the distribution of assets, as long as the shares of the company are held outside of the UAE. This is because a company never dies. Shares can be distributed in accordance with the usual rules concerning succession in the place of the deceased shareholder's domicile or Will. This is a very simple and cheap solution, that will if nothing else, provide reassurance to a family.

But can I get a mortgage if held through offshore company? What choice of banks do I have?

You can apply for a mortgage from select banks if property held in an offshore company. For individual purchases a number of banks offer mortgages.

What are the other benefits?

A company provides a legal framework for joint investment. A group of investors can join together and hold shares within the offshore company which reflect their proportion of property ownership, thus providing a legal structure for multiple ownership.

It also provides privacy and confidentiality and thereby protects your assets. The property is registered in the name of the company and not its owners, therefore it is relatively straight forward to keep the beneficial ownership of the property confidential.

If I already own property can I transfer the ownership to an offshore company?

Yes, you can transfer the ownership to a company from your individual name. However it is up to the developer whether or not to charge you a percentage on the transfer fee. There is no clear law covering this area and really depends on the developer.

Can I own other assets through the company?

Yes you can. A company is a legal entity and can own any asset, be it a bank account, stocks or shares and of course other properties.

How can I sell the property if held in an offshore company?

It is as simple as transferring the shares of the company. The new law issued in March 2006 states that ownership is registered with the Land Registry. Therefore the sale of shares between two individuals does not affect the title on the property.

However, as this new law has not yet been affected, it again depends on each developer if they wish to treat it as a 'change of ownership' and charge fees accordingly.

Do the developers in the UAE recognise offshore companies?

Yes, developers do recognise offshore companies, in particular British Virgin Islands companies. However, it is sensible to first check with your agent that they would be happy to accept property purchase through a corporate structure.

How do I set up an offshore company? What are the cost involved for set-up and on-going?

Please contact our office if you would like information on the process of incorporating an offshore company as well as details on the associated costs.

Should anonymity be required, professional Directors and Shareholders for a company can also be provided.