Foreign Investment in Dubai Property

In the Emirate of Dubai real estate purchase has been allowed for foreigners since summer 2002. However, the right to purchase is restricted to the so-called freehold areas. In other areas a leasehold right of use applies for a limited period.

Ownership by nationalities other than UAE or GCC Nationals

According to Article 4 of the new Law, all nationalities other than UAE or GCC nationals can own freehold title, a 99-year Lease or a Usufruct right, in specific areas of Dubai, as determined by the Ruler’s approval.

The concept ‘freehold’ is a generally well understood concept. It is the most superior form of private property ownership. A freeholder is considered to be the absolute owner of the land and buildings comprised in his title. He has the right to occupy, use and enjoy his property forever – in perpetuity – or until he transfers his title to a new owner, and his heirs is entitled to inherit his title upon his death.



As regards leasehold and usufruct rights, the new Law provides that the right shall not exceed 99 years. From our discussions with the Land Department we understand that the minimum term is 10 years, i.e. that a lease or usufruct right for a term of between 10 to 99 years can be registered at the Land Department. This is to be confirmed by the Land Department in the Rules that it is authorized to publish pursuant to the new Law.

All of the above is subject to the property in question being located in one of the specific areas of Dubai which the Ruler approves for foreign ownership. We are now awaiting the first of such Ruler’s approvals. The current indications are that this will be issued shortly, and that it will include the expected projects within the portfolios of Dubai Properties, Nakheel and Emaar. Some other large projects may also be included, for example those at Dubailand.

In areas that have the Ruler’s approval, both foreign individuals and companies can own property. The Land Department is imposing no restrictions on this and it will make no difference whether the company is registered in the Cayman Islands, England, Hong Kong or any other foreign jurisdiction – provided that it can prove its lawful existence in its home country.

Long leases Executed by Foreigners

Long leases are being sold to foreigners in projects all across Dubai, such as Dubai Investments Park and Dubai Silicon Oasis. In these projects it would seem, initially at least, that registration of long leases in favour of foreign investors may not be permitted. This does not make these long leases illegal in any way. They do not offend this Law or any Federal Law. It just means that they are treated in a different way for some purposes: