Opening a Real Estate Investment Firm in Dubai: Legal Considerations

Dubai’s property market has attracted investors from around the world. With its tax-free income, world-class infrastructure, and growing demand for both commercial and residential spaces, the city remains a stronghold for real estate investment.

However, opening a real estate investment firm in Dubai involves more than just registering a business. Legal compliance, licensing, registration, and professional certifications are all mandatory. For anyone considering a Real Estate Business Setup in Dubai, it is important to understand all legal steps involved before making any commitments.

This blog provides a step-by-step legal guide to opening a real estate investment firm in Dubai — from choosing the right license structure to meeting Real Estate Regulatory Agency (RERA) requirements.

Understanding the Scope of a Real Estate Investment Firm

Before getting into the legal process, define the activities your firm will undertake. A real estate investment company in Dubai can be involved in:

• Buying and selling property on behalf of the company

• Acquiring real estate assets for rental income

• Managing real estate investment portfolios

• Partnering in real estate development projects

• Real estate fund management (under additional approvals)

These activities require proper approvals, regulatory oversight, and clear legal documentation.

Step 1: Choose the Legal Structure of the Business

When considering a Real Estate Business Setup in Dubai, the first step is to decide on a legal structure. The most common types for real estate investment firms include:

Mainland LLC (Limited Liability Company)

• Requires a local service agent or Emirati partner (with no shareholding in certain cases)

• Ideal for direct operations in Dubai’s real estate market

• Can enter into contracts with Dubai-based developers and clients

Free Zone Company

• 100% foreign ownership

• Limited to activities within the free zone or international trade

• Real estate operations may be restricted unless licensed through a free zone that allows such activities (e.g., DIFC, Dubai South)

For direct property trading and investment inside Dubai, a mainland license is generally the preferred route.

Step 2: Select the Correct Activity Code

The Department of Economic Development (DED) provides specific business activity codes related to real estate. Common options include:

• Real estate buying & selling

• Real estate leasing

• Property investment and development

• Real estate consultancy (requires separate approvals)

Ensure the chosen activity matches your business plan. Each activity carries its own regulatory obligations.

Step 3: Apply for a Real Estate License

To carry out real estate-related activities legally, you must apply for a Real Estate License issued by the DED in coordination with RERA (Real Estate Regulatory Agency).

Key steps include:

1. Trade name reservation with DED

2. Initial approval of business activity

3. Submission of required documents

4. Ejari tenancy contract for office space (minimum required size is 200 sq ft)

5. Approval from RERA

6. Final license issuance

Your firm will be issued a license valid for one year, renewable annually.

Step 4: RERA Registration and Approvals

RERA regulates all real estate professionals and firms operating in Dubai. Once your trade license is issued, the next step is registering with RERA.

For Companies:

• Company registration with RERA

• Approval of office location

• Registration of managers and directors

For Individuals (e.g., investors or company representatives):

• RERA training and exam

• Professional registration card (broker card or investment manager card)

Even if your company is not brokering property, RERA registration is often required for transparency and legitimacy in any investment dealings.

Step 5: Meet Capital Requirements

Unlike general businesses, a real estate investment firm may be subject to minimum capital requirements, especially if:

• You're investing in development projects

• You're launching a real estate fund

• You're engaging in regulated investment management

In such cases, the Dubai Land Department (DLD) and the Securities and Commodities Authority (SCA) may request proof of funding, escrow accounts, and investor agreements.

Check with the DLD and consult a certified legal advisor to ensure your capital structure meets local laws.

Step 6: Office Lease and Ejari Registration

To complete your licensing, you must lease an approved commercial space. The lease must be registered under Ejari, the government’s tenancy registration system.

This office:

• Becomes your official business address

• Is inspected by DED or RERA (if required)

• Should be large enough to accommodate your declared staff and operations

Shared offices or coworking spaces may not be approved for regulated real estate firms.

Step 7: Compliance with Anti-Money Laundering (AML) Laws

Real estate investment in Dubai is closely monitored for anti-money laundering and counter-terrorism financing compliance.

Your firm must:

• Register with the UAE’s goAML platform

• Appoint a compliance officer

• Submit regular suspicious transaction reports (if applicable)

• Maintain records of clients and transactions

The UAE has strengthened its compliance framework in recent years, and non-compliance can result in fines, account freezes, or license suspension.

Step 8: Set Up Corporate Bank Accounts

Once your company is legally established, you’ll need a corporate bank account to handle investments, rental income, and transactions.

Due to regulatory scrutiny in the real estate sector, banks may request:

• Shareholder passports and visas

• Proof of source of funds

• Office lease agreement

• RERA license and registration

Choose a bank familiar with real estate operations for smoother account setup.

Optional Approvals and Permits

Depending on your business model, you may also require:

• DLD permit for advertising real estate projects

• Escrow account setup (if managing development funds)

• Approvals from SCA (if offering real estate fund management services)

• Marketing permits for promotional events or digital campaigns

Consult with licensed Business Setup Consultants in Dubai to ensure all permits are handled correctly.

Common Challenges and Legal Risks

When starting a Real Estate Business Setup in Dubai, you may encounter:

• Delays in RERA approval

• Office size or location compliance issues

• Challenges in opening a corporate bank account

• Failure to meet AML reporting duties

• Misalignment between license activity and business operations

Avoiding these issues requires early consultation with legal advisors and compliance professionals familiar with Dubai’s real estate law.

Real-World Example

InvestPro Real Estate LLC, a mid-size firm in Dubai, began operations in 2021 by purchasing residential units for long-term rental income. They:

• Chose a mainland license with a real estate buying and selling activity

• Registered with RERA

• Hired a certified investment manager

• Leased office space in Business Bay

• Complied with AML reporting

Within two years, they scaled their portfolio to include serviced apartments and small office buildings.

Tax and Ownership Considerations

Dubai offers 0% personal income tax and no capital gains tax on property sales, making it attractive for investors. However:

• Corporate tax may apply if the firm earns more than AED 375,000 per year.

• UAE Economic Substance Regulations (ESR) must be followed for certain holding activities.

• Ultimate Beneficial Owner (UBO) disclosure is required at the time of license issuance.

Foreign investors can also own 100% of the business under the current regulations (without needing a local partner), especially if proper legal structures are followed.

Final Compliance Checklist

✅ Select correct legal structure
✅ Apply for a real estate trading license
✅ Complete RERA registration
✅ Lease and register office with Ejari
✅ Open compliant bank account
✅ Appoint compliance officer
✅ Register for goAML
✅ File for optional permits (if needed)

Legal Setup First, Investment Next

Starting a real estate investment firm in Dubai requires more than just market knowledge. You need a clear understanding of the legal requirements, from licensing and RERA compliance to office setup and AML obligations.

Taking shortcuts can lead to serious issues with the law. But with the right setup, Dubai offers unmatched potential for property investors and institutional buyers alike.

Make Your Real Estate Investment Legal and Scalable

Whether you're buying villas, leasing office space, or building long-term rental portfolios, the success of your Real Estate Business Setup in Dubai starts with getting the legal foundation right. Don’t treat it as a formality — treat it as your first and most important investment.