Unlocking Land Ownership in Dubai and Abu Dhabi

Demand for land in the UAE is increasing every year. For example, in May 2023, land sales in the Emirates rose by 233% compared to the same period last year. Land is purchased for various purposes, including construction, development, and resale. Notably, Russian investors are actively entering the market. According to a report from the real estate company Betterhomes, Russian buyers ranked third among all real estate investors in the UAE during the second quarter of 2023. It’s important to note that this report focuses on residential property purchases (apartments and villas), but the overall trend is clear. Let's look at the restrictions on land purchases for foreigners in the UAE, using Dubai and Abu Dhabi as examples.

General Provisions

According to Law No. 7 "On Land Registration in the Emirate of Dubai" and Law No. 19 "On Regulating the Real Estate Sector in the Emirate of Abu Dhabi," only the following entities can own land and buildings on it in Dubai and Abu Dhabi:

- UAE citizens;- Citizens of the Gulf Cooperation Council (GCC) member states, which include Bahrain, Qatar, Kuwait, Oman, and Saudi Arabia, in addition to the UAE;- Companies fully owned by these citizens;- Public joint-stock companies.

Regarding joint-stock companies, a literal interpretation suggests that only companies registered in the UAE are eligible. However, a broader interpretation could extend this to companies registered in GCC countries (the regional union of six Arab states on the Arabian Peninsula). It’s important to note that Abu Dhabi law specifies that foreign ownership in such public companies should not exceed 49%.

Moreover, both Dubai and Abu Dhabi laws include a provision stating that, with the permission of the ruler of Dubai, the Crown Prince of Abu Dhabi, or the president of the executive council, foreigners can own land in these emirates.

Exempted Areas

Both emirates have specific areas where foreigners are allowed to own land.

In Dubai, these include designated plots in areas such as: Umm Hurair 2, Al Barsha South 2–3, Emirates Hills 1–3, Jebel Ali, Al Jaddaf, World Islands, Ras Al Khor, Al Rowaiyah, Sheikh Zayed Road, Al Sufouh 1–2, Al Quoz 3, Al Quoz Industrial Area 2–3, Mirdif, Dubai Marina, Palm Jebel Ali, Palm Jumeirah, Nad Al Sheba, and Warsan 1.

In Abu Dhabi, foreigners can purchase land in investment zones such as: Yas Island, Saadiyat, Reem, Maryah, Lulu, Al Raha Beach, Sayh Al Sedayrah, Al Reef, and Masdar City.

What if the Desired Area Isn’t on the List?

For example, suppose a foreigner wants to purchase land in the Jumeirah area of Dubai, which is not on the list of exempted areas. Can they do this by purchasing a company owned by a UAE citizen that owns the desired property? In practice, this scheme is unlikely to work. There is a high risk that such a transaction could be declared invalid, leading to restitution (where both parties must return everything received under the deal). It's worth noting that a claim to challenge such a deal can be filed without any time limitation. Additionally, there is a high probability that such a transaction will be rejected during registration with the land department.

This applies not only to purchase and sale agreements but also to options, exchanges, gifts, and other types of transactions, as well as any method of transferring property to a foreigner, such as agreements where a UAE citizen waives ownership rights in favor of a foreigner.

Thus, if a foreigner plans to purchase land in Dubai or Abu Dhabi, it’s better to avoid risky bypass schemes and carefully study the list of permitted areas, choosing one from that list.