For many entrepreneurs in Dubai, real estate ownership is not just about investment returns. It can be about securing premises for operations, housing for staff or creating a long-term asset in one of the world’s most dynamic markets. For free zone companies, especially those registered in DUQE, the question of whether they can buy property in Dubai is both practical and strategic. So can a free zone company buy property in Dubai? The answer depends on where the property is located, how the company is structured, and the rules set by the Dubai Land Department (DLD).
Why This Question Matters for Business Owners in Dubai
Free zone companies have become a popular choice for international founders because they allow 100% foreign ownership and a streamlined business setup process. However, not every owner realises that corporate property rights are restricted by location under Dubai law.
Owning the wrong property through a free zone company can lead to delays at transfer, unexpected costs or the inability to register the title. For DUQE companies, knowing the exact scope of your property rights helps you plan with confidence.
The Legal Basis for Property Ownership by Free Zone Companies
Property ownership in Dubai is governed by Law No. 7 of 2006, known as the Real Property Registration Law. This law divides buyers into two broad categories. UAE and GCC nationals, along with companies wholly owned by them, may own property anywhere in the emirate. Foreign nationals and foreign-owned companies, including free zone entities, may own freehold property only in specific areas that have been designated for such ownership.
The DLD is the authority responsible for registering these transactions, while the Real Estate Regulatory Agency (RERA) issues supporting regulations. A free zone company with any foreign shareholding is treated as a foreign entity. It can therefore only own freehold property or long-term lease rights in the designated areas.
Where a Free Zone Company Can and Cannot Buy
Designated Freehold Areas
Designated areas are locations where foreign ownership is permitted, whether by individuals or companies. They include some of Dubai’s most recognised developments such as Downtown Dubai, Palm Jumeirah, Dubai Marina, Jumeirah Lakes Towers, Business Bay and Emirates Hills.
Within these zones, a DUQE company can buy and register property in its own name, whether that property is residential or commercial.
Non-Designated Areas
Non-designated areas are the remainder of the city, where ownership is reserved for UAE and GCC nationals or companies they fully own. In these areas, a DUQE company cannot register a freehold title. The only option is to lease premises, which may be suitable for certain operations but does not give the long-term security of ownership.
In most cases, long leases over ten years in non-designated areas are not available to foreign-owned companies without special government approval.
DUQE Free Zone and Other Major Zones Compared
DUQE Free Zone
DUQE companies are treated like other Dubai-incorporated free zone entities for property purposes. They may acquire freehold property in any designated area, provided the purchase is registered with the DLD. The process typically involves submitting company incorporation documents, a board resolution approving the purchase and a no-objection certificate from the DUQE authority.
DMCC, DIFC and JAFZA
DMCC companies have long been active buyers of property in Dubai, especially in the Jumeirah Lakes Towers development where they are based. DIFC companies can own property both within DIFC’s own registry and in other designated areas under DLD’s system. JAFZA companies can also own in designated areas, and JAFZA Offshore companies remain a popular vehicle for holding Dubai real estate purely for investment purposes.
Non-Dubai Free Zones with Recent Access
Some free zones outside Dubai have signed agreements with the DLD to allow their companies to own property in the emirate. These include Masdar City in Abu Dhabi, the Umm Al Quwain Free Trade Zone and RAK International Corporate Centre. Such agreements mean that even companies not incorporated in Dubai can, under certain conditions, invest directly in Dubai’s designated areas.
What a Free Zone Company Can Buy
Within the designated areas, a free zone company faces no legal distinction between property types. A DUQE company can purchase apartments, villas, office units, warehouses, retail spaces or even plots for development. The main requirement is that the development permits corporate ownership and that all necessary approvals are obtained.
Off-plan properties can also be purchased, with the title issued to the company on completion. Some businesses choose to buy office space within their own free zone to simplify operational licensing. Still, investment in other designated areas is also permitted.
Alternatives if Direct Ownership Is Not Possible
If a desired property lies outside the designated zones, there are still options. One route is to secure a long-term lease. However, these are rarely available to foreign companies in non-designated areas. Another option is to establish a UAE mainland company with local shareholding, thereby qualifying it as a UAE national entity for ownership purposes.
A more common solution is to use a JAFZA Offshore or RAK ICC offshore company, both of which are approved to hold Dubai freehold property and allow 100% foreign ownership. This is often used purely as a property holding structure.
Tax and Compliance Considerations
Corporate Tax Implications
Since 2023, the UAE has applied corporate tax to business profits. Free zone companies can maintain a 0% rate on qualifying income. Still, income from property in mainland Dubai is generally not considered qualifying. Rental income or capital gains from such property would be taxed at 9%, unless the property is located in a free zone and used for permitted commercial purposes.
VAT on Property Transactions
Residential property sales and leases are generally exempt from VAT, except for the first sale by a developer within three years of completion, which is zero-rated. Commercial property sales and leases attract 5% VAT, which can usually be recovered if the company is VAT-registered and uses the property for taxable business activities.
DLD Fees and Registration Requirements
All property purchases in Dubai attract a 4% DLD transfer fee plus a small admin charge. Corporate buyers must also provide company incorporation documents, a board resolution and a no-objection certificate from their free zone authority.
Visa and Residency Implications
Property owned by a company does not qualify the individual shareholders for a property investor visa. Dubai’s investor and Golden Visa schemes require the property to be registered in the applicant’s personal name. However, free zone company owners already enjoy the ability to obtain residency visas through their business licence.
Owning commercial property, such as an office, can indirectly increase a company’s visa quota by increasing available workspace. This can be valuable for businesses planning to expand their local team.
Regulatory Changes Business Owners Should Watch
Recent agreements between the DLD and free zones in other emirates have widened the pool of companies eligible to own property in Dubai. The city also periodically expands its list of designated freehold areas, creating new opportunities for investment. Increased compliance requirements, such as disclosure of ultimate beneficial owners, mean corporate buyers should be prepared for more detailed documentation.
Free Zone Companies Buying Property in Dubai
A DUQE company can buy both residential and commercial property in Dubai, but only within the designated freehold areas. The process is straightforward if you meet DLD’s requirements and work with the right advisors. The main pitfalls to avoid are attempting to buy in non-designated zones without a compliant structure, overlooking tax implications and expecting company-owned property to grant a personal visa.
For many business owners, combining a DUQE company with a well-chosen property in a designated area offers both operational benefits and a secure long-term investment. Contact us today for further information.
FAQs
Can a free zone company own residential property in Dubai?
Yes, but only in designated freehold areas.
Can a company from another emirate buy Dubai property?
Only if its free zone has an agreement with the DLD, such as Masdar City, UAQ FTZ or RAK ICC.
Do I need a property to get a free zone visa?
No. Free zone visas are issued based on your business licence, not property ownership.
Will my property be taxed if owned by my free zone company?
Income from mainland property is generally taxed at 9% under the UAE corporate tax regime.