Introduction – Why This Question Matters
Dubai’s real estate market continues to attract investors from across the globe, particularly Europeans seeking tax-efficient investment structures and high-yield opportunities. One of the questions many new investors face is whether to buy property through a Free Zone company instead of under their personal name.
On the surface, both routes seem attractive — after all, the UAE has no personal income tax, no capital gains tax, and no property tax (UAE Ministry of Finance). But structuring your purchase through a company can bring added benefits — and costs — that are worth understanding before making your decision.
At Invest in UAE, we help first-time and seasoned investors navigate the complexities of ownership structures, so they can make informed decisions aligned with their wealth management goals.
What Is a Free Zone Company in the UAE?
A Free Zone company is an entity incorporated within one of the UAE’s many designated Free Zones, such as the Dubai Multi Commodities Centre (DMCC) or Jebel Ali Free Zone (JAFZA). These zones were designed to attract foreign investors by offering:
- 100% foreign ownership
- Full repatriation of capital and profits
- Customs duty exemptions
- No personal income tax
Some Free Zones also permit corporate ownership of property in specific designated freehold areas, making them an appealing option for international investors.
Can a Free Zone Company Own Property in Dubai?
Yes — but with limitations.
Not all Free Zones have property ownership rights, and the list of eligible zones is subject to Dubai Land Department (DLD) regulations. For example:
- DMCC companies can own property in most Dubai freehold areas.
- JAFZA companies typically own commercial property rather than residential.
- Certain other zones require special approval or are restricted to specific property categories.
(Breather) – Invest in UAE works closely with Free Zone authorities and real estate agents to ensure you set up in a jurisdiction that matches your property goals.
Advantages of Buying Through a Free Zone Company
1. Asset Protection & Privacy
Owning through a company separates personal assets from business assets, offering protection against personal liabilities. Additionally, company ownership can provide greater privacy, as the company name appears on property records.
2. Inheritance & Succession Planning
With personal ownership, inheritance in the UAE is subject to Sharia law unless you have a registered will. Company ownership allows for share transfers, which can be a smoother way to pass property to heirs or business partners.
3. Visa Eligibility
Owning a Free Zone company can open the door to UAE residency visas, which is valuable for investors planning to spend significant time in the country.
4. Ease of Portfolio Management
If you plan to buy multiple properties or hold a mix of residential and commercial real estate, doing so under one company can simplify accounting, management, and reporting.
Disadvantages & Costs to Consider
1. Set-up & Renewal Fees
Unlike personal ownership, company ownership comes with incorporation fees and annual renewal costs. Depending on the Free Zone, this can range from AED 10,000 to AED 25,000 or more annually.
2. Corporate Governance
Even if you are the sole shareholder, you must comply with reporting requirements, licensing renewals, and sometimes audited financial statements.
3. Financing Restrictions
Some banks are more cautious when lending to companies rather than individuals, potentially requiring higher down payments or offering different loan terms.
4. Corporate Tax Considerations
While passive real estate investment income is generally exempt, corporate income from non-passive activities may be subject to the UAE’s 9% corporate tax (UAE Federal Tax Authority).
Comparing Free Zone Company vs. Personal Ownership
|
Criteria |
Free Zone Company |
Personal Ownership |
|
Ownership Rights |
Limited to eligible zones |
Any freehold zone open to foreigners |
|
Privacy |
Higher |
Lower |
|
Inheritance Flexibility |
High (via share transfers) |
Limited unless will registered |
|
Setup Cost |
High |
Low |
|
Annual Costs |
High |
Minimal |
|
Visa Eligibility |
Yes (via company) |
Yes (via property value) |
Who Should Consider Buying Through a Free Zone Company?
You may benefit from this structure if you:
- Plan to own multiple properties and want a consolidated ownership vehicle.
- Value privacy and asset protection.
- Need a residency visa tied to a business entity.
- Want flexible succession planning without relying solely on wills.
On the other hand, first-time investors buying a single residential property for personal use may find personal ownership simpler and more cost-effective.
Case Study – A European Investor’s Journey
Maria, a Spanish investor, initially bought a Dubai Marina apartment under her personal name. After adding two more properties to her portfolio, she found that managing them individually was cumbersome. By setting up a DMCC company, she consolidated her assets, simplified her bookkeeping, and structured shareholding to facilitate future inheritance — all while maintaining the UAE’s tax advantages.
Legal & Compliance Factors for European Investors
- Eligible Free Zones – Check whether your chosen Free Zone is approved for property ownership in your target area.
- Licensing Requirements – Some Free Zones require that your license type aligns with your activities.
- Tax Implications at Home – Certain European countries have Controlled Foreign Company (CFC) rules (OECD guidance) that may affect your reporting obligations.
- Banking & Financing – Not all banks treat corporate borrowers the same; shop around for lenders familiar with Free Zone structures.
(Breather) – Invest in UAE offers a step-by-step service to ensure your company setup, property purchase, and financing are aligned with UAE laws and your home country’s regulations.
FAQ – Key Takeaways
Q: Can I buy property in any Dubai freehold zone through a Free Zone company?
No. Your Free Zone must be approved by the Dubai Land Department for property ownership in your desired area.
Q: Will I save on taxes by using a company?
In the UAE, property income is generally tax-free for both individuals and companies. However, your home country’s rules may differ.
Q: Does buying through a Free Zone company help with visas?
Yes, company ownership can qualify you for a UAE residency visa.
Q: Is it worth it for a single property?
Usually not. The costs may outweigh the benefits unless privacy or inheritance flexibility is a priority.
