UAE | Visa

Dubai studies new property visa

Realtors optimistic about implications of proposal but are wary about costs involved

  • By Bassma Al Jandaly, Senior Reporterand Deena Kamel Yousef, Staff Reporter
  • Published: 00:00 June 6, 2011
  • Gulf News

The Jumeirah Lakes Towers complex of mixed residential and office towers
  • Image Credit: Oliver Clarke/ Gulf News
  • The Jumeirah Lakes Towers complex of mixed residential and office towers. The new law is expected to boost the real estate sector in Dubai.

Dubai: Dubai is studying the enforcement of a new residence visa system for property owners, sources from the government confirmed yesterday.

The government official, who spoke on condition of anonymity, said that authorities in Dubai are discussing ways of granting owners of properties in the emirate, residence visas based on transparent rules and legislation.

"The rules are expected to be issued soon," the source said.

Al Bayan Arabic daily reported yesterday that Dubai would issue a law granting specific categories of property owners to have residence in Dubai.

Realtors are optimistic about the implications of this proposal for their industry but are wary about the costs involved.

"Residence related to property was a main catalyst for buying and selling in the real estate sector especially since the boom. We think this [law] will restore some activity in the market but not like the previous levels in real estate," said Tariq Ramadan, Chairman of Tharaa Holding.

However, the costs associated with setting up a company to register the property under it could reach up to Dh40,000 a year and this may deter some buyers, Ramadan noted.

"It will be a disadvantage because the mainten-ance fees and ownership fees are high and then add company ownership fees at Dh20,000 to Dh40,000 annually, then this would be helpful only for those who want residence. But it is expensive," he said.

The law would be an incentive for foreigners coming to the UAE for visas and would additionally "spruce up" Dubai's real estate market, said Nima Khanpour, Commercial Director of Stratum Owners Association Management.

Ramadan hoped the law would be flexible and that its logistics, conditions and associated costs would not detract from its attractiveness. The official said that concerned authorities from private and public sectors are looking for mechanism for residence for property owners.

The official said that the new mechanism suggests that property owners to establish a company in the free zone and then the company will own the property which will let the property owner who owns the company to obtain a residence permit on the basis of ownership of the company, not the property.

"We are looking to encourage foreign investment here and aiming to boost the progress of the real estate market here," he said.

He said the concerned authorities will have rules and regulations which will include the level of income of the property owner, his or her job and the total cost of the property.

Specific requirements

"The property owner must meet specific requirements in order to be able to establish the company," he said.

He said, the value of the company and the number of times the owner wishes to renew his residence will be taken into consideration too.

He said the residence visa will be valid as long as the ownership of the company is valid.

"If the property owner decided to sell his or her properties, which means the cancellation of the trade licence to the company and the cancellation of residence too," he said.

While the law would help the real estate market, it will not be enough, some analysts said.

"While it would not solve all of the real estate problems in Dubai, any law relaxing or improving residency given to real estate owners in Dubai would help support residential demand. It must be emphasised that long term residency visas would not solve all of the issues with residential oversupply in Dubai, which would take time to bring back into balance," said Jesse Downs Head of Management Consulting at Jones Lang Lasalle for MENA.

"It might attract investment demand or second home demand through improving residency with property but it can only go so far. What Supply/demand dynamics will take a while to return to balance."

The structure of the law, the proeprty owner applying for residency by registering a company, is meant to fit with an existing corporate structure and to fast track the process, said Essam Al Tamimi, Senior Partner of Al Tamimi and Company. "The local ferezone entities could take responsibility of sponsorship based on corporate structure."

Comments (5)

  1. Added 13:25 June 6, 2011

    I am very happy to see some progress in this direction. We should not waste time and hold the development of city like Dubai by giving people a reason not to invest here in spite of many positive aspects. We have invested all our savings in the progress of dubai and people like us, who have contributed to the development of this city, who belong to the city should be able to live here, raise thier children here and become a part of success story of this great nation. I want to mention the comment of one of the successful Business owners of UAE who is doing business for last 40 year and says 'It is not possible for a country to progress unless it sees a second generation ' its improtatnt that people settle down in dubai and their childern who are born and bought up her contribute to the success of this nation and this is not possible without a residence visa!

    Poonam Dabur, Dubai, United Arab Emirates

  2. Added 10:32 June 6, 2011

    If someone just wants a residence visa of UAE, why he should buy a property then, he can straight away open a company and sponsor his visa and just pay the license renewal fee every year. This proposal is not making sense.

    Mohammad, Dubai, United Arab Emirates

  3. Added 10:19 June 6, 2011

    This new law may benefit landlords with a number of properties as they are effectively running a buisness but it does not address the single home owner/occupier looking to buy a fimily home. How is the government looking to address the average person who wishes to live and work here in a settled environment, rather than wasting money on rent.

    DB, Dubai, United Arab Emirates

  4. Added 10:19 June 6, 2011

    Its good that the Govt of Dubai is sending out feelers to all the property owners during the initial study phase so that all opinions can be gathered and incorporated into the New Property Law. This will mean that the law is not ambiguous and is addressing all issues which may raise its head at any future stage. My comments to the law is that when you are allowed to open a Free Zone company and transfer the property to this company name, does this mean that this FZE Company can then also do business in the UAE. If you can transfer properties to this company - is there a transfer fee which will be charged. Does this company's name have to be included in the property deed etc.What happens when one of the co-owners deciide to see her/his share or if he/she expires. All such complex issues must be addressed in the New Law.

    Venkat Krishnan, Dubai, United Arab Emirates

  5. Added 10:11 June 6, 2011

    At last... Although, if I do read this article correctly, I doubt that this is the right way to move forward... You can not expect every home owner to setup a company in order to obtain a residence visa. I would rather define some clear with regards to the property... min sqft, min bedrooms, min value... as I do believe it would be wrong to give residence visas with every 2/300 sqft studio apartment

    Hans, Dubai, United Arab Emirates

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