Commercial leasing guidelines for tenants in Dubai | Azco Real Estate

When it comes to real estate, Dubai is a very sought-after destination for businesses. The city offers a number of advantages for commercial leasing, including a favourable tax regime, a central location in the region, and a growing economy. However, there are also some specific guidelines that tenants should be aware of when leasing commercial property in Dubai.

Guidelines for Commercial Leasing

Firstly, it is important to note that all commercial leases in Dubai are subject to the UAE Commercial Companies Law. This law stipulates a number of conditions that must be met in order for a lease to be valid, including the minimum lease period (which is three years), the maximum lease period (which is ten years), and the requirement for the landlord to be a UAE national or company.

Secondly, it is important to be aware of the restrictions on foreign ownership of commercial property in Dubai. In general, only UAE nationals and companies are allowed to own freehold commercial property in Dubai. However, there are a number of exemptions to this rule, including for certain types of businesses that are 100% foreign-owned.

Thirdly, it is worth bearing in mind that commercial leases in Dubai are typically subject to VAT. Currently, the standard rate of VAT in the UAE is five per cent. However, some businesses may be eligible for a reduced rate of three per cent if they meet certain conditions.

Finally, it is important to note that all commercial leases in Dubai must be registered with the Dubai Land Department. The registration process is relatively simple and can be done online. However, it is worth bearing in mind that there is a fee payable for registering a commercial lease.

Who is eligible to obtain a commercial property on a lease?

UAE nationals and companies are able to obtain freehold commercial property in Dubai. However, there are some restrictions on foreign ownership of commercial property. For example, some businesses may be 100% foreign-owned and not eligible for freehold status. Additionally, all leases must be registered with the Dubai Land Department. There is a fee for this registration process.

How long is the minimum lease period?

The minimum lease period in Dubai is three years according to the UAE Commercial Companies Law.

What is the maximum lease period?

The maximum lease period that is stipulated by the UAE Commercial Companies Law is ten years.

Is VAT (Value Added Tax) applicable to commercial leases?

Yes, VAT is applicable to commercial leases in Dubai. The standard rate is five percent, but some businesses may be eligible for a reduced rate of three percent.

What are the consequences of not registering a commercial lease?

All commercial leases in Dubai must be registered with the Dubai Land Department. Failure to do so may result in penalties or fines.

Are there any other special conditions that apply to commercial leases?

Yes, there are a number of special conditions that apply to commercial leases in Dubai. These include the requirement for the landlord to be a UAE national or company, as well as certain restrictions on foreign ownership of commercial property. Additionally, all leases are subject to VAT. For more information, it is advisable to seek legal counsel prior to entering into a commercial lease agreement.

What documents are required to lease a commercial property in Dubai?

To lease a commercial property in Dubai, you will need to provide the following documents:

• Your passport or Emirates ID
• A copy of your trade license
• A No Objection Certificate (NOC) from your sponsor (if you are a foreign national)
• Proof of company registration
• The title deed for the property (if you are the owner)
• An electricity bill for the property
• A water bill for the property.

Overall, there are a number of important things to bear in mind when leasing commercial property in Dubai. By following the guidelines set out above, tenants can ensure that they are fully compliant with the relevant laws and regulations.

These are general guidelines for leasing commercial property in Dubai. For specific advice, it is recommended that you seek legal counsel prior to entering into any agreement. Azco Real Estate can provide you with expert guidance and assistance throughout the process of leasing commercial property in Dubai.

Azco Real Estate is a leading property management company in Dubai with over 20 years of experience in the industry. We offer a wide range of services, including commercial leasing, property management, and real estate consulting. Our team of experts are on hand to provide you with all the guidance and assistance you need to lease commercial property in Dubai. Contact us today to find out more about our services or browse our website for more information.