Expert Insights

Promoting Investment in the Real Estate Sector

This article summarises changes introduced in the UAE in the last 12 months to encourage investment in the real estate sector, namely:

  1. The introduction of long term residency permits for investors in real estate in Dubai;
  2. Allowing foreign ownership of 100% of the shares of companies incorporated onshore; and
  3. Removing restrictions capping lending to real estate sector.

Long Term Residency Permits

Current Regime

Regulations in Dubai currently allow an investor to apply for visa for up to two (2) years where the investor owns a residential property worth at least one million Dirhams (AED 1,000,000).

New Regulations

The Cabinet of the United Arab Emirates (UAE) has announced changes which will allow an investor to obtain a five (5) or ten (10) year residency visa, depending on the size and nature of their investments in the UAE.

The owner of a property which is worth at least AED five (5) million will be able to apply for a five (5) year residency visa. 

Where the investment is worth AED ten (10) million, the investor will be able to apply for a ten (10) year residency visa. This cannot be a pure real estate based investment however; only 40% of the portfolio may consist of real estate, the remaining portfolio must consist of investments in established companies or business partnerships.

Further details on the process involved in implementing these changes in Dubai are expected in due course but it is expected that the value of the property will be determined based on the last recorded transactional value or the value determined by the Dubai Land Department.  We note that the investor’s interest in the property and the company/business cannot be mortgaged either. 

Foreign Corporate Ownership

Current Regime

The current regime states that foreign nationals can only hold a maximum of 49% of an onshore business in the UAE, with 51% being held by a UAE national. 

New Regime

The UAE issued a resolution in May 2018 which will potentially allow foreign nationals or companies to own 100% of a business operating in the UAE within certain business sectors. 

Although the new regulations only allow 40% of such investments to consist of real estate in the UAE, this is likely to promote investment into commercial and residential property in the UAE.

Mortgage Cap

Current Regime

The Central Bank issued regulations which limit home loans for expatriates to a 75 percent loan to value (LTV) rate for a first property worth up to AED five (5) million and to 80 percent for UAE nationals. 

For properties worth more than AED five (5) million and for all properties after the first one, loans were capped at 65 percent LTV for expatriates and 70 percent LTV for UAE nationals and all loans for off-plan properties were capped at 50 percent LTV irrespective of the applicant’s nationality and existing portfolio.

New Regime

We understand that the UAE has now removed the existing restriction requiring the Central Bank to apply a 20 percent LTV cap and provided the Central Bank with the flexibility to introduce new restrictions based on market requirements.

The Central Bank has not issued any further guidance or commentary on this point and banks in Dubai have not amended their real estate lending policies yet but we anticipate changes occurring in this area in due course, especially given previous commentary in the media suggesting that the UAE Banks Federation was considering requesting the Central Bank to relax mortgage lending rules.

We will issue further comments on this matter once the Central Bank has released its comments or regulations on the real estate LTV cap.


It is clear that the creation of long term investors and residents and easing the restrictions on lending in the real estate sector will encourage further long term investment into the real estate market in the UAE in the future.  

Please contact us if you would like to discuss the matters above further.

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