Dubai: Property brokers will be able to have full ownership of their companies in the UAE from now on, as this business activity has been removed from the ‘restricted list’. Given real estate sector’s dominant role in shaping the UAE’s economic and business activity, the decision is rated as one of the path-breaking ones, according to industry sources.
In particular, this will have its maximum impact in Dubai’s property market, especially at a time when buying and selling activity has been building up nicely. “What the change means is that a property brokerage firm can be 100 per cent owned by a foreign national though a local UAE national is required to act as a service agent,” said Atik Munshi, Managing Partner at the consultancy Enterprise House UAE.
“In Dubai, while registration with RERA (Real Estate Regulatory Agency) is required, taking the RERA-sponsored examination is not compulsory for the business owner.”
The UAE has also brought changes to its investor visa requirements on property assets, whereby an owner of a Dh750,000 property can get a three-year visa. Earlier, the requirement was Dh1 million for two years.
Opening up to full ownership
It was recently that the UAE – at the federal level and individual emirates – announced the number of business activities that could have foreign nationals own 100 per cent shareholding in their enterprise and not have a UAE National partner hold a majority stake.
But property brokerage services remained in the ‘restricted’ category – that has changed now.
According to Jonathan Davidson, founding Partner at the DIFC-based law firm Davidson & Co. “As and when this amendment, is enacted there is likely to be a lot of those brokers seeking to change their historical ownership structure. It is noteworthy that to do so will require the full agreement and sign off of everyone involved whether they have been running the company or acting as a de facto nominee.
“So, there are likely to be a lot of interesting conversations in the real estate world in the coming months, especially with the recent near meteoric rise in house prices in some parts of the UAE.”
Some of the activities not mentioned in the restricted list may be 100% foreign owned though they require approval from ministries. Activities like audit, legal, healthcare, education, engineering consultancy, etc., too are termed as restricted business activities.
The Dubai Land Department and RERA provide the oversight of all brokerage firms in the UAE, requiring that strict standards of transparency are maintained. The brokers also need to adhere to certain minimum qualifications if they are to practice here.
“There are well over 2,000 real estate brokerage companies in Dubai - all of which currently have a local or Emirati ownership structure due to existing legislation,” said Davidson. :A lot of these brokerages are run by expat stakeholders.”