Buy property in Dubai through a company: rules, costs and tax

What buying through a company means in Dubai

When you buy through a company, the title deed carries the company’s name, not yours. You own the company, and the company owns the home. For the DLD, the owner is the company, and it is the company that signs, pays and appears on the register.

That affects everything that follows: who signs the purchase, who pays tax, who can apply for residency and what happens if you later sell or change shareholders. So it is worth deciding before you book, because the booking and the contract are signed in the name of whoever will be the owner.

Which companies the DLD can register

In freehold areas, any foreigner can buy in their own name. With a company, the rules are stricter:

• A company incorporated in your home country cannot hold the title directly. The DLD does not register homes in the name of foreign companies.
• What it does accept is a free zone company. Foreign-owned companies must be registered in a Dubai free zone, such as JAFZA or DMCC, or in Ras Al Khaimah. If you already have a company abroad, the usual route is a subsidiary in one of them.
• GCC companies register with Dubai’s Department of Economy and Tourism.
• The free zone has to consent. To buy, the DLD asks for a no objection letter from the free zone authority, valid for one year.

The difference between mainland and free zone licences is in the glossary. If one of your company’s shareholders is itself a foreign company, the DLD recommends presenting the structure for approval before you buy. It is not a step to leave until the end.

In your name or through a company: what changes

This table sums up the differences that weigh most:

The purchase fee does not change, so a company does not make the deal cheaper. What it adds is running costs and yearly obligations. In return, it can bring order to an investment with several partners or several homes. What buying costs in each case is set out in the guide to the costs of buying in Dubai.

When a company can make sense

There is no single answer, but these are the cases where it comes up most:

• Several partners are buying together. Splitting shares in a company can be tidier than all of you appearing on the title deed with a percentage each.
• You will run several holiday lets. An individual can hold up to eight holiday home permits at a time. Beyond that, the rules call for a company. We cover it in the guide to the holiday home permit.
• You already do business in the Emirates and want the home to be part of it.

And these are the cases where it is usually unnecessary:

• You are buying one or two homes for long-term lets.
• You want the Golden Visa from the property.
• You need a mortgage. Ask the bank first whether it lends to companies and on what terms.

The decision depends on your case and, above all, on how such a company is taxed at home. We help you see what the developer and the DLD require for each option, and you review the tax side with your adviser before setting anything up.

How to buy through a company, step by step

1. Set up the company in a free zone that allows property ownership, with its articles and shareholder certificate.
2. Request the no objection letter from the free zone to buy. It is valid for a year.
3. Register the company with the DLD at a trustee office. You get a reference number used in every transaction.
4. Sign the booking and the SPA in the company’s name, through its representative.
5. Register the purchase. Off-plan, the developer registers it in Oqood with the licence, the representative’s passport, the articles with a legal Arabic translation and, for foreign-owned companies, attested by the Ministry of Foreign Affairs, the free zone letter and the shareholder certificate. For a ready home, the transfer is signed at the trustee office.
6. Receive the title deed in the company’s name.

If you will not be in Dubai to sign, the company can act through a power of attorney. How to prepare one is in the guide to the power of attorney to buy property in Dubai. We tell you which documents each developer asks for and review them with you before they are sent.

What buying through a company costs

The purchase itself costs the same: the DLD charges 4% of the price to an individual and to a company alike. On top come the company’s own costs, some one-off and some yearly:

Try the payment plan in the off-plan calculator, which already has an AED 1,000,000 example with a 60/40 plan. What you pay the developer is the same with or without a company. The difference is the licence and accounts every year, which are worth adding up before you decide.

Tax in the Emirates: Corporate Tax

This is the biggest difference. If you buy in your own name, rent from a home is not taxed in the UAE, because investing in property personally does not count as a business. If you buy through a company, Corporate Tax applies:

• Every company must register, free zone companies included, within three months of incorporation. Late registration carries an AED 10,000 penalty.
• It files a return every year, even without a profit. The standard rate is 0% on profit up to AED 375,000, about $102,000 and 9% above.
• Residential rent does not get the free zone 0% rate. These companies can pay 0% on certain activities, but income from property that is not commercial is excluded, and a home never is commercial.

Residential rent carries no VAT, whether the home is in your name or a company’s. The other taxes on owning a home in Dubai, and what you declare at home, are in the guide to Dubai property tax for UK and US residents.

The Golden Visa if you buy through a company

For the property investor Golden Visa, the DLD requires homes worth at least AED 2,000,000, about €489,000 or $545,000 in the applicant’s name and fully owned by them. A home in a company’s name does not count for this route, even if you own 100% of the company.

There is a separate route for partners in UAE companies, with a stake of at least AED 2,000,000, but it has other requirements, such as an audited financial report from a UAE firm. If residency is one of your goals, buy in your own name. The property route’s requirements are in the guide to the Golden Visa through property investment.

Selling or changing shareholders

Selling a home held by a company works like any sale: the company signs the transfer at the trustee office and receives the price. What does not work is selling the company to avoid the DLD fee. The DLD treats any change in the shareholders of a company that owns property in Dubai as a transfer of the property, which must be notified and on which fees are paid.

If you buy off-plan to sell before handover, the company signs the assignment too. How resale works is in the guide to selling off-plan before handover.

Buying through a company from the UK or the US

In the Emirates, the company is taxed as described above. At home, it may be taxed again: many countries have rules to stop residents deferring tax through companies in low-tax places. With Corporate Tax at 0% or 9%, those rules will usually apply. This is what to know before you speak to your adviser.

Buying Dubai property through a company from the UK

If you are UK resident, the transfer of assets abroad rules can tax you on the income of a non-UK company you set up or fund, even if it pays you nothing. If the shareholder is a UK company, the controlled foreign company rules come into play instead. Ask your adviser to compare the numbers before you set anything up. Dubai is 4 hours ahead of the UK in winter and 3 in summer.

Buying Dubai property through a company from the US

If you are a US citizen or tax resident with a stake in a foreign company, you may need to file Form 5471 every year, with steep penalties if you do not. With a company controlled by US persons, the rent can be taxed on your return for the year even if the company pays nothing out. If you have signing authority over the company’s accounts and they exceed $10,000, you also file an FBAR. New York and Miami are 9 hours behind Dubai in winter and 8 in summer.

From anywhere else

Many countries have similar rules for income of companies abroad. Before setting anything up, ask a tax adviser at home to compare both options with numbers: buying in your own name and buying through a company.

Wherever you live, we handle the Dubai side: the developer, the DLD and the paperwork. The tax side at home is for your adviser.

Common mistakes

• Assuming the company you already have at home can buy directly.
• Setting up the company after signing the booking in your own name.
• Forgetting the free zone letter or letting it expire.
• Missing the Corporate Tax registration deadline.
• Counting on the Golden Visa from a home in the company’s name.
• Thinking that selling the company avoids the DLD fee.
• Not checking how the company is taxed at home before creating it.

Things to keep in mind

• The 4% DLD fee is the same through a company or in your own name.
• Only Dubai or Ras Al Khaimah free zone companies, or GCC companies, qualify.
• The company has yearly running costs and Corporate Tax obligations.
• For the property Golden Visa, the home must be in your name.
• At home, the company’s income may be taxed as yours.
• Decide on ownership before you book.

Whether you buy in your own name or through a company, we stay with you throughout with a full-service approach: we choose the project with you, prepare the documents the developer asks for, follow the payments and registration, and see you through to handover.

Frequently asked questions

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