Dubai is home to world-class infrastructure and has made its name in the tourism, trade, and other business sectors. This powerful, lively city has caught the attention of foreign investors from across the globe. This foreign investment in Dubai enables entrepreneurs and businessmen to become real estate agents.
This is a lucrative opportunity for fresh entrepreneurs and the future of the real estate business in Dubai is very bright. And no other market also lets you earn a more handsome amount of profit than this one. The government of the UAE has also played a crucial part in making the real estate business boom in Dubai. The ease of getting visas, business-friendly policies, tax exemptions, and much more.
Furthermore, a considerable number of people are coming from other countries and buying residential flats here in Dubai to settle down in the city. Therefore, it is a fantastic opportunity for real estate entrepreneurs to start their own real estate businesses in Dubai.
If you are wondering how to start a real estate business in Dubai, scroll down. This comprehensive guide has got you covered with the required information including process, required documents, and much more.
Let’s start with the guide.
Steps to Start Real Estate Business in Dubai
Following are the steps that you should follow when starting a real estate business in Dubai:
Step 1. Deciding Business Location
Step 2. Choosing Business Activity
Step 3. Choosing Company Name
Step 4. Getting RERA Certification
Step 5. Memorandum of Association
Step 6. Applying for Trade License
Step 7. Getting Approval from Dubai Land Department
Step 8. Finding Rented Office Space in Dubai
Let’s talk about them one by one in detail.
Deciding Business Location
First of all, you have to choose a suitable business location. You have two options; either you can choose a free zone or go for the mainland. Both jurisdictions have their own benefits, features, requirements, and limitations.
Choosing Business Activity
The next step is to select a business activity in Dubai, you can choose one of the following business activities:
- Professional Company
- Sole Proprietorship
- LLC (Limited Liability Company)
- Partnership en-Commendam
- Joint Venture
- Private Shareholding
- General Partnership
- Public Shareholding
You should outline your business activity before moving forward. It will decide the kind of service for which you need to get permission. For example, if you register real estate brokerage as your business activity, you can legally represent on behalf of the seller of a building, rent buildings, manage properties on behalf of owners, and consult on building sales and lettings.
There are many property-related business activities to choose from. Your chosen type of business should match the demands or goals of your business. Choosing a business organization might not be an easy task. That is why it is recommended that you should reach out to a business consultant in Dubai.
Choosing Company Name
Once you have chosen the business model, it’s time to give your company a decent name. Choose a good name that follows the criteria set by the government. When choosing a name, try to add “broker” or “real estate” to your company name. A trade name having these terms will make a great impact and help you in letting everyone know what business you run.
Go to the Department of Economic Development of the relevant authorities of the free zones to approve and register your chosen company name. After the registration is done, you will receive an initial approval via your e-mail. You will also be required to approve your associated documentation from Tasheel.
Getting RERA Certification
Before applying for the license, you should register yourself for the Dubai Real Estate Institute’s Certified Training for Real Estate Brokers course (DREI). This certification is necessary for the license-issuing process. You must pass an exam at the end of the course to become a registered real estate broker in Dubai. Obtain a Good Conduct Certificate from Dubai Police after passing the course.
After that, you need to contact RERA to obtain your broker ID. Once you get your broker ID, you can now legally begin your career as a real estate agent in Dubai. Because each emirate has its own real estate regulatory body if you have a RERA broker ID only then you will be allowed to work in Dubai. Keep in mind that your license must be renewed after every year.
Memorandum of Association (MoA)
Don’t forget about the Memorandum of Association (MoA). Memorandum of Association must be typed in accordance with the protocols of the Department of Economic Development (DED) and UAE commercial law. It is also important to notarise the MoA.
Applying for Trade License
Now that you have selected the business activity and company name, you are good to apply for a trade license. For applying for a trade license on the mainland, you will go to the Department of Economic Development. For free zones, you have to visit the respective authorities.
You will be asked to give some documents along with the submission of your license application.
Now, you need to get the final approval in the form of a professional services license. This license is required for those who want to run property management or brokerage services in Dubai. For that, you will need to again submit the required documents and application. Once your application is accepted, you will be issued a trade license.
Getting Approval from Dubai Land Department
Real estate brokerages in Dubai must receive approval from the Dubai Land Department (DLD) before starting their business operations. Dubai Land Department is the government body that is responsible for overseeing activities related to real estate in the UAE.
Finding Rented Office Space in Dubai
You will be able to distinguish yourself from the competition being a real estate business owner in Dubai if you have your own physical office space. As a result, you will gain the trust of your customers since they will perceive you as an ethical businessperson.
Should You Hire Back Office Services?
You must manage each and every activity like an expert as a fresh entrepreneur. However, you may become bogged down at some point with real estate accounting, back-office, and other tasks. As a startup, managing your accounting books is highly significant because in this way you will be able to keep a track of your revenue and expenses, and will help you adapt and act on better business plans. That is why outsourcing accounting services is preferable because it is less expensive than recruiting an in-house team of experienced professionals.
What Accounting Services Do Service Providers Offer?
Following are the accounting services offered by companies:
- Tax Preparation
- Making Financial Reports
- Bank Reconciliation
- Payroll Processing
- Accounts Receivable and Payable
Why Should You Outsource?
By outsourcing, you can get relief in form of the following:
- Project deliveries before the set deadline
- Lower operational costs
- Access to expertise
- Round-the-clock service
Cost of Setting Up a Real Estate Business in Dubai and UAE
The cost of opening a real estate brokerage in Dubai varies from Emirates to Emirates and jurisdiction to jurisdiction. It also depends on certain factors including location, specific business activities, and company size. In general, you can expect the following cost for starting your real estate business in the UAE:
RERA charges AED 5,020 for each activity. The RERA course fee is AED 6,300 for non-bachelor degree applicants. Fees are AED 2,500 to 3,200 for bachelor’s degree holders. Those who don’t have any educational qualifications have to pay AED 15,750.
In Dubai, expect the cost of starting a real estate business around AED 21,000.
In Fujairah Creative City Free Zone, it would cost you approximately AED 15,000 to AED 25,000 to get a real estate license. In this region, AED 19,538 is the approximate cost for setting up a property management business as the sole shareholder with eligibility for a single visa along with the use of co-working space.
The charges for a real estate brokerage license for a business that follows an LLC structure is AED 12,950.
Things to Consider Before Setting Up Real Estate Business in Dubai
See Things from the Eyes of Your Clients
You might know that quick commissions generally appear to be lucrative in the real estate business. As someone who is just getting started in this business, you might desire to strike a solid deal only to generate some hefty cash in no time. However, in the long run, this strategy may put you on the wrong side of the market.
Remember that the goal of real estate is to assist clients in finding the ideal property that meets their demands. Therefore, it’s critical to understand their unique requirements. You won’t be able to create your brand in the future unless you’re providing what your clients are looking for. Good deals not only help you develop a great client experience. This in return help you receive referrals. More the referrals, more the clients to gain which ultimately lets you make a good profit.
Understanding the Market
You must understand the market in order to be a successful real estate businessman in Dubai. Examine and learn everything you can about the locations or places where you wish to establish your company.
Conduct a physical inspection and explore the area on your own rather than relying solely on the virtual information present on the internet or forums. Talking to the neighbors about their livelihood and day-to-day activities is an excellent way to develop a better understanding of the real estate market.
Keep Up With the Latest Trends
Dubai’s real estate market is constantly expanding with the passage of time. This makes things hard for you to compete in the market. If you stay ahead of the curve you would be able to keep your business afloat in the long run. Try to keep up with the latest market trends and new real estate legislation.
Similarly, try your level best to keep an eye on what your competitors are offering their customers or what marketing strategies they are implementing. The markets are constantly changing with the passage of time. So, you should stay on top of new initiatives to give yourself an advantage with your buyers.
Starting a real estate business in Dubai is very fruitful. This is due to the ever-growing investments and awesome market opportunities in Dubai. You can get started with your business plan by having the required support. Riz and Mona have the expertise to establish your real estate business in Dubai and the rest of the UAE. We have in-house experienced professionals that can deal with the licensing, documentation, banking, and the rest of the process of setting up your company. It will let you concentrate on making the backbone of your company. Connect with our team of business setup experts right now.