2.2.4 Regulation and Supervision of the Real Estate Sector in the UAE
2.2.4.1 Regulation of the Real Estate Sector
Regulation of the real estate sector as a whole—as opposed to regulation of real estate professionals—is the responsibility of each of the emirates and as a result varies across the UAE. This section discusses key aspects of regulation of the sector in Dubai and Abu Dhabi, the two largest property markets. Section 2.2.4.2 discusses regulation of real estate agents and brokers.
2.2.4.1.1 Openness to Foreign Purchasers
• Dubai: With the exception of nationals of the Gulf Cooperation Council (GCC), non-residents and non-citizens of the UAE are permitted to own real estate in Dubai only in one of the designated real estate investment areas. In general, foreign purchasers must be individuals; legal persons are not able to purchase real estate in the investment areas unless they make the purchase through a subsidiary incorporated in a Free Zone. Foreign trusts and other legal arrangements, including trusts or legal arrangements established in the Free Zones, are also not permitted to purchase real estate anywhere in the Emirate.
• Abu Dhabi: As in Dubai, foreigners are permitted to purchase real estate in Abu Dhabi only in one of nine designated real estate investment areas. Within these areas, there are no restrictions on the type of property they can own or the period of time for which they can own it. Outside of these areas, foreigners cannot exercise freehold ownership of property, although they can exercise other forms of long-term ownership, such as leaseholds and usufruct rights.
2.2.4.1.2 Residency Rights
Owners of freehold properties above a certain value may obtain an investor visa that grants them limited residency rights in the UAE. The larger the value of the property, the longer the length of the visa. Visa rules are set by the UAE federal government through Cabinet Resolution (56) of 2018 on Regulating the Residence Permits for Investors, Entrepreneurs and Specialised Talents, and thus apply to all emirates:
• Ownership of a property worth at least AED 1 million comes with a six-month multi-entry visa. Dubai will grant a three-year renewable residency visa in such circumstances.
• An individual who purchases a property of at least AED 5 million and retains it for three years is entitled to a five year residency visa.
• An individual who purchases a property of at least AED 10 million without a mortgage or other loan and retains it for three years is entitled to a ten year residency visa.
2.2.4.1.3 Use of cash
There are no legal restrictions on use of cash to purchase real estate or property in Dubai or Abu Dhabi.
2.2.4.2 Regulation and Supervision of Real Estate Professionals
Real estate agents and brokers in the UAE are required to be licensed. The Land Departments or municipality of each emirate and CFZ are responsible for granting licenses in the Mainland and CFZs; the Financial Services Regulatory Authority (FSRA) and Dubai Financial Services Authority (DFSA) license real estate agents in the FFZs.
Under Article 3 of AML-CFT Decision, real estate agents and brokers qualify as DNFBPs when they “conclude operations for the benefit of their Customers with respect to the purchase and sale of real estate." When they qualify as DNFBPs, real estate agents and brokers must comply with the same AML/CFT preventive measures as LFIs, including the requirements to conduct a risk assessment, perform CDD, and report suspicious transactions.
The Ministry of Economy supervises real estate professionals in the mainland and CFZs for compliance with AML/CFT obligations, and the FSRA and DFSA supervises them in the FFZs. The Ministry of Economy has issued guidelines for supervised entities describing their AML/CFT compliance obligations.4
4 These guidelines may be found at https://www.economy.gov.ae/english/Pages/AML.aspx.