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Dubai is one of the most sought-after real estate markets in the world. While real estate in London returns an average yield of 2.7%, real estate in New York returns an average yield of 2.9%. But for Dubai, the average yield is more than 7%, which makes investing in Dubai real estate a lucrative proposition. The Dubai Land Department recorded 5,762 transactions valued at a total of $4.41 billion in September 2021 alone.
Real estate is a major contributor to the economy of Dubai, which is worth $102.67 billion. With Dubai being a major hub for business and trade, as well as being home to 3.40 million residents, there is a lot of demand for both commercial and residential real estate. The new visas announced by the United Arab Emirates have contributed to a surge in the sales of residential units in Dubai. So real estate business setup in Dubai makes a lot of sense financially.
Generally speaking, the commission on a sale is 2% of the price. If you take the aforementioned example of September 2021, sales of $4.41 billion equate to more than $88.20 million in commission. There are believed to be some 2,307 active real estate brokers and 738 real estate brokerage firms in Dubai. If the sales were distributed evenly, that would mean an average of $72,413 for each real estate broker or real estate brokerage firm in one month alone.
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How to Open a Real Estate Agency in Dubai
To be a real estate broker in Dubai, you need a Broker Card. This is granted only to those who successfully clear the training program conducted by the Real Estate Regulatory Agency of the Dubai Land Department. In order to be eligible for the program, you need to have attained a high school education and be associated with a real estate brokerage firm in Dubai. So there are several people who choose to set up a real estate brokerage firm in Dubai.
The first step is to decide on a name for the real estate brokerage firm. In the United Arab Emirates, there are laws pertaining to company nomenclature, such as how religious terms cannot be part of a company’s name. The names of countries and cities too are not allowed to be a part of the company’s trade name, but nationalities and the names of geographical regions are permitted. A first name is allowed only if it is the first name of one of the shareholders.
A business setup consultant can help you with more information. He/She can also help you draw up the company formation documents, which outline the name of the company, the purpose it is being set up for, and the names of the business owner(s). These documents must then be notarized by a Notary Public for them to be legally valid in the United Arab Emirates. A business setup consultant who specializes in company formation can help you out with this aspect as well.
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There is more a business setup consultant can do to be of assistance with the process. He/She can reserve the trade name so that when you apply for company registration and a real estate brokerage license, it will be granted exclusively to you and not anyone who may apply for the same trade name before you. Prior to lodging the application on your behalf, a business setup consultant can also help you secure the necessary approvals, such as from the Dubai Police and the Dubai Land Department.
You also need to select a suitable office space for your real estate brokerage firm in Dubai. You then need to enter into a Tenancy Agreement with the owner of the premises and get this Tenancy Agreement registered so that it becomes a legally binding Tenancy Contract. Once company registration is granted, the address of the space you have rented becomes the registered office address of your real estate brokerage firm in Dubai.
If everything is in order, you can expect to receive company registration and a real estate brokerage license in a matter of days. Depending on the scale of your operations, you may also wish to employ staff at your real estate brokerage firm. It is recommended that you register your real estate brokerage firm with the Ministry of Labor & General Directorate of Residency and Foreigners Affairs, Dubai so that you will be able to get employment visas issued for the expatriate staff you plan to hire.
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Steps to Open a Real Estate Agency in Dubai
- Choose a name for your company, albeit one that will be approved.
- Draw up the company formation documents, allocating shares to each owner.
- Get the company formation documents notarized by a Notary Public.
- Decide on a physical location for your real estate brokerage firm.
- Enter into a Tenancy Agreement with the owner of the premises.
- Register the Tenancy Agreement so that it becomes a Tenancy Contract.
- Apply for company registration and a real estate brokerage license.
- Receive a payment voucher outlining the necessary fees to be paid.
- Make the payment, get company registration & real estate brokerage license.
You can then proceed to opening a corporate bank account for your real estate brokerage firm in Dubai. This will help you to make and receive payments with ease. Owing to strict anti-money laundering regulations in the United Arab Emirates, it is not easy to open a bank account. But with the right business setup consultant in your corner, the process could take as little as two hours instead of the whole day.
Why Choose A&A Associate LLC for Opening a Real Estate Agency in Dubai?
At A&A Associate LLC, we have years of experience with company registration in Dubai. Our team of experts have been personally handpicked for their expertise in Business Consulting, Tax Advisory, Legal, and Corporate Finance. We have been of assistance to clients from 100 countries around the world, and we have an excellent client satisfaction rate so far. For more details, please call + 971 56 408 6728 or send us a message using the form below.
