Dubai is known as the commercial hub of the United Arab Emirates. The new initiative of giving "Golden Visas" for five to ten years has witnessed an influx of investors who are coming down to invest in the Dubai economy. People are flocking to make their names in the booming economy of Dubai.
The real estate sector in the country has been known for its high rental yields. There has been an expected rise in the rental yields to five per cent which is far higher than the prestigious and highly economical cities like New York and London.
The key benefits of starting a real estate business in Dubai are:
1. There is a predictable and continuous flow of cash within this stable and rich economy.
2. Dubai promises excellent returns, tax rebates, and great diversification.
3. Dubai is booming, especially with its real estate sector. Now would be the ideal time to invest in the real estate sector of Dubai.
How to Start a Real Estate Business in Dubai? - Steps
Ready to venture into the Real Estate Sector of Dubai? Here are the essentials:
Like in every country, one needs to register themselves first before thinking of starting a real-estate business in Dubai:
1. The first step towards starting a real-estate business will be to decide the business structure of the company you are about to start. There are five types of business structures you can choose from:
- Sole proprietorship: In this business model, there is no minimum requirement for business capital; there is only a provision for one manager.
- One person Limited Liability Company: In this model, the shareholder's i.e., the owner's liability is limited to shares owned by him.
- Civil Company: A civil company can be owned by professionals of different nationalities. But if there are no UAE citizens on board, then they should appoint a local service agent.
- Partnership: In a partnership model of business, the UAE nationals should be general partners and the foreign nationals can become limited partners of the company.
2. The next step is to decide the place of the business setup. There are two options for entrepreneurs to decide on; mainland or free zones. If you decide to set up your office on the mainland, you can directly trade with the UAE market and can also bid for government contracts.
Free zones are the most appropriate way to start a real estate business. The free zone spaces provide amenities like zero percent tax rate, custom tax exemption, no currency restrictions, and many more. A business in a free zone will not be able to directly trade with the UAE market.
The condition of no trade with the UAE is bound to change in the future. The decision of place of business is very crucial as it will have an impact on your future business prospects.
3. Now, you have to choose a name for your company. The UAE has got very strict policies when it comes to the naming of companies.
Taking the help of an expert will help you resolve this dilemma. The name should not contain any profane names or abbreviations. It should also not be named after any well-known organisations in the world and avoiding abbreviations of one's own name is not very well appreciated. The name has to be registered by applying to the Department of Economic Development, Dubai.
4. Preliminary approval of the documents is the next step. They evaluate the documents and again have to be re-submitted with added documents to get the final approval.
To get a real estate license, one needs to compulsorily clear an exam conducted by the Real Estate Regulatory Agency (RERA). Once you pass you can start trading. The application for a real estate license should be given to DED in the case of the mainland or to the Free Zone authority; whichever you choose.
Cost of Opening a Real Estate Business in Dubai
The startup costs to initiate a real estate business in Dubai are usually not that high. The cost of starting a real estate business depends on various factors like the place of business, the enormity of the business setup etc. Free zones usually give off lesser expenses than the mainland.
If you want to be a property developer in Dubai, the process is a bit tackier than the above procedure.
Even though the procedure seems to be simpler, it is always fitting to take advice from organisations that have prior experience in dealing with the same. They will be able to guide you exceptionally without taking much time.