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Being one of the world's greatest commercial and industrial hubs, Dubai is regarded as a very promising location for launching a business. Both the attractiveness of investments in real estate in Dubai and the number of business options are expanding quickly. This is brought about by a favorable business climate, a lax tax code, and a high level of living. Global company owners come to Dubai to launch their own enterprises. How to rent a business space, say, for a cafe, store, or warehouse? It's crucial to understand both the requirements for becoming a tenant and the rules that must be followed. Let's discuss it in this article.
Content:
- Dubai commercial real estate leasing algorithm
- Documents needed to rent a commercial property
- What should be done after the agreement is concluded?
- Doing business in a free economic zone or onshore
Dubai commercial real estate leasing algorithm
Commercial real estate cannot be rented right away in the United Arab Emirates. You must first register the lease. You must register your company in the UAE and receive a business license in order to achieve this.
Foreign nationals now have a wide range of business opportunities. There are more than a thousand different commercial activities available to entrepreneurs.
When leasing space to launch a business in Dubai, your strategy should be as follows:
- A preliminary analysis of available areas of operation and an accurate definition of your own field.
- Registering a new company in the DLD (Dubai Economics Department) or in the UAE Free Trade Zone.
- Applying for a license.
Please be aware that all rental property in Dubai must be utilized solely for the purpose it was chosen for. Therefore, it is impossible to turn a warehouse into an office or a shop into a café. These entire instances are tightly regulated.
Documents needed to rent a commercial property
You will have to present proof of your ownership of the company, authorization to utilize commercial space, and compliance with the operating plan for the chosen location. You must include this in a different provision of the contract if you plan to redevelop the property.
Additionally, the landlord might ask you to present:
- an identification document – passport;
- preliminary approval to apply for a license from a government body;
- a business plan;
- a bank account statement;
- personal or business cash reports.
A leasing agreement must be registered with the Dubai Land Department after being signed in the United Arab Emirates. This organization is in charge of all real estate-related issues. The mechanism for recording leasing agreements, which attests to the legitimacy of the deal, is known as Ejari (from the Arabic language it stands for "my lease"). The papers must be filled out by the property owner. In this instance, registration fees are paid by the tenant. Ejari registration often costs AED 220 ($60). Online registration is AED 172 ($47).
What should be done after the agreement is concluded?
After the agreement is signed, the facility must be connected to the water and power networks and insurance must be set up to cover costs in the event of property damage. If re-development of the area is required, it's crucial to make sure that doing so won't violate any laws. Additionally, consent from the owner, developer, or municipality is required.
Rent can be paid in two different ways:
- using a check from your bank account;
- paying from the company's account.
Keep in mind that you can always terminate your lease. In this situation, you will probably be required to pay the property owner a penalty, which is typically equal to the rent for two months. However, the cost of the fine might be greatly decreased if you notify the owner in advance about your plans and provide a valid justification.
Doing business in a free economic zone or onshore
Every business owner needs to be aware of the distinctions between operating a company in free zones (freezone) and renting space in onshore areas, where tax incentives are not offered.
The Dubai Economic Department (DED) has regulatory control over foreigners who work onshore. Additionally, they are required to have local partners that hold 51% of the company's shares, which are United Arab Emirates citizens. Additionally, if business owners intend to sell any imported items in the UAE, they must pay a duty of 5% of the cost of the item.
When a business is registered in a free economic zone, the owner acquires a 100% stake in the company.
Dubai boasts attractive commercial locations where expats can make good money. When selecting a location for a business, there are several things to take into account. These include infrastructure, traffic, tourist flow, and population density. Additionally, the area's development and its connectivity to other areas should be considered. Rental price for commercial space is a significant factor as well. High real estate expenses do not always make sense. A business owner may frequently locate space to rent at a reasonable price in a developed region with lots of traffic.
You should seek the advice of professionals to make a wise investment. The professionals at our company are always available to answer any questions you may have about the many types of rental homes, suggest properties that would be good fits, and assist you with registering on the conditions that are most favorable to you. Get in touch with us right away and we will give you a thorough consultation free!
