How to Set Up Your Real Estate Agency in Dubai: Legal Considerations

Explore the legal requirements to start a real estate agency in Dubai. Gain additional understanding with tips on avoiding the most common legal pitfalls while setting up your agency.

Dubai’s real estate business is flourishing, and you can be a part of it!

Dubai can be an  ideal location to start your real estate agency and earn a very high income through residential or commercial property sales and rentals.  Whether you’re new to real estate or have been a successful agent and are looking to also be your own boss, our comprehensive guide will help you navigate the maze of legalities. Property Finder’s guide outlines the documents and documentation you need, as well as the other licensing requirements to get your agency up and running in no time. 

It’s important to note that Dubai’s real estate requirements and regulations are often evolving. Don’t rely just on this guide, as we can’t provide you legal advice. Always consult the latest information from government sources. 

Two professionals discussing legal matters in a modern office setting, with one person attentively taking notes while the other listens, highlighting the importance of legal considerations when setting up a real estate agency in Dubai.

Limited Liability Company (LLC)

A Limited Liability Company (LLC) offers essential protections for your personal assets. This is especially helpful if your business lacks a UAE partner. If you don’t have a real estate or business partner in the UAE, you’ll need a minimum of two shareholders and a local service agent— who can act as your sponsor. This sponsor can effectively engage an individual with the governmental authorities, receiving a small share of around 5%. 

Sole Proprietorship

This option gives you complete control over your agency so that you can keep all the earnings to yourself. However, this option doesn’t offer a liability shield, meaning the owner’s assets (your assets)  might be jeopardized if the company accrues debt or something goes wrong. 

This option might be ideal for a small firm, or a micro-agency, which can benefit from having access to all of the commissions or other revenue. After all, for a small company just starting out, cash flow can be a challenge. Contrarily, a scalable organization has no legal safeguards against liability claims when an agency expands.

License and Approvals

Decided on the legal structure for your new real estate agency? Great!  Now, it’s time to process the application for all the necessary licenses, so you can start earning. 

The Trade License

Your trade license license is akin to an open for business sign that you can display for your company. With a trade license – also known as Dubai Economic Department (DED) license, you have officially received the nod of approval to start your real estate business in Dubai. Without a trade license you cannot do business in Dubai, let alone sell real estate in the UAE. Review this article to learn more about the specific steps to get your trade license. [hyperlink to article]

Important! Operating Without a Trade License

The trade license is the official badge that permits you to conduct your business in Dubai. And without a trade license,  your organization is simply illegal. This can lead to hefty fines and potential business closure. 

Furthermore, the DED can also take over your assets and prevent you from leaving the country until all of the fines are cleared. Don’t skip the step of getting your trade license or think you can save it for last.

The Brokerage License

Your brokerage license, from the Dubai Land Department (DLD), makes you a licensed real estate agent. You can buy, sell, or rent properties for clients – basically, you’re officially a real estate agent! (For the most up to date information always check out their website: https://dubailand.gov.ae/en/)

The Commercial License

If you plan on doing all the real estate sales yourself, you don’t need a commercial license. However, if you plan to have a team of agents working for you, your commercial license is absolutely necessary. It allows your agency to handle property transactions on your clients’ behalf, giving you the green light to build your real estate empire!

Ejari Registration

If you plan on handling rentals, it’s important to know about the Ejari Registration. Ejari is a central hub for rental agreements in Dubai, managed by the DLD. Landlords and property owners need to register their tenancy contracts here to ensure everything is above board and legal. 

The Ejari system oversees all rental agreements in Dubai. This means landlords and property owners must register with Ejari to buy, sell, and lease properties. Furthermore, real estate agents also need to register with the Ejari system. 

 RERA Certification

Have more real estate agents working for your agency? Get them certified by the Real Estate Regulatory Agency (RERA)! 

To do so, your agents must submit the required documents, and prepare and pass the RERA test and a required program. But, the good news is that the RERA certificate, provided by the Dubai Real Estate Institute (DREI), builds the credibility of your real estate agency. This certificate proves your agents’ knowledge and that they have the expertise required to conduct real estate business competently while ensuring compliance with the Dubai real estate regulations.

Government building in Dubai, the Department of Land Development, where official documentation and trade licenses are processed for real estate businesses.

Ensuring Compliance: Essential Regulations and Ongoing Requirements

Securing licenses is just the first step of the long ladder towards success. But it’s worth it, if you want your operations to run smoothly without any legal hiccups. Remember, while it’s a lot of work, the real estate market in Dubai is booming, and you don’t want to miss out on the opportunity to build your business and generate real wealth.  Follow the rules and keep up with the following requirements: 

Taxation

There’s no personal income tax in Dubai. However, most purchases have a 5% “Value Added Tax” (VAT). Your organization’s annual revenue determines its tax value. You can find more information on the VAT rules, including the registration procedures at https://tax.gov.ae/en/.

Renewals and Reporting

Don’t forget that registrations for Ejari, RERA certificates, and trade licenses need to be renewed regularly. To ensure the smooth operations of your agency, keep your licenses, certification and registrations updated and submit reports as per the DLD and DED rules and regulations. 

You should know that missing the renewal deadlines can lead to penalties and hamper your business activities. Set a time on your calendar at least a month in advance of the deadline, so that you can begin collecting the necessary documents and complete your renewal before the deadline.

Documents Required to Set Up Your Real Estate Business in Dubai

Getting (and keeping) your real estate license in Dubai involves collecting a lot of different documents including: 

  • Proof of passing the real estate exam
  • Valid passport
  • Proof of office space
  • Licensed broker
  • RERA-registered accountant
  • Letter of recommendation
  • Your official degree.
  • Criminal record
  • Property valuation certificate
  • Financial statements

Navigating the legal labyrinth of the Dubai real estate market can be tricky, and even a seemingly minor mistake can have severe implications. That’s why, we have curated a list of common pitfalls you should avoid. 

Illegally Advertising (i.e. Advertising Without a Trakheesi Permit)

Many new real estate agents and agency owners don’t realize they can’t advertise their properties without a Trakheesi permit. Without this permit, any advertising activities by a real estate agency are considered illegal and can lead to fines and other penalties. Don’t make that mistake!

What are Trakheesi Permits

Trakheesi permits are necessary for real estate brokers and agencies in Dubai to legally advertise properties on various platforms, including online portals like Property Finder. This system ensures that all advertisements comply with DLD’s regulatory standards, maintaining transparency and reliability in property listings.

How to Obtain a Trakheesi Permits

To obtain a Trakheesi permit, agencies must first be licensed and then follow these steps:

  • Register an account on the DLD website.
  • After account verification, log in and select “New Application” for Trakheesi permits.
  • Fill in the required details about the property type and other relevant information.
  • Submit the necessary documents, such as Emirates ID, passport copies, and proof of agency license.
  • Upon approval, the permit is issued which then allows the agency to list and advertise properties legally.

A helpful and detailed guide to Trakheesi Permits is available here! 

Misrepresenting Properties

Never exaggerate the qualities of the property! Always accurately represent the size, condition, and amenities of the property.

Dubai has serious laws against misleading advertisements. Hence, to mitigate hefty fines or charges by the DLD, ensure complete transparency while writing property descriptions for your property listing and associated marketing material. In fact, one of the best ways to ensure your property listing is accurate is to list it on Property Finder and have it verified!

Non-Compliance with RERA Regulations

Your RERA certificate isn’t optional.

Your agents risk penalties and possibly suspension if they operate without a current RERA accreditation or violate the organization’s code of conduct. Considering how quickly the real estate market in Dubai is growing and how much money is flowing in, RERA is essential to regulating the real estate industry and continuously protecting consumers’ rights. Therefore, keeping up to date with these regulations can ensure that your agency operates within its guidelines. Don’t let your success get off track!

Mishandling Client Funds

Keeping your client’s money in a different bank account is crucial. Having a separate bank account for your personal finances, and a separate bank account for your business creates better transparency, helps you with proper accounting, and—above all—safeguards your real estate client’s hard-earned money.  This goes without saying, but mixing your business and personal finances can be very risky and land you in hot water, including fines and even jail time.

Professional accountant calculating financial details at a desk, surrounded by cash, documents, and using a laptop, representing the financial planning involved in setting up a real estate agency in Dubai.

Important! Consult a Professional

We hope this guide is helpful, but remember it isn’t legal advice. It’s simply an outline to help point you in the correct direction. Obtaining a real estate license in Dubai can feel a bit intimidating, so (in addition to reading the various agency websites) be sure to engage professionals to help you. Here’s how you can be certain you’re doing everything you need: 

  • Consult a Lawyer: Connect with a real estate lawyer in Dubai for advice tailored to your business and particular demands. Furthermore, they will help you navigate the legal maze to ensure compliance with all the rules and regulations and tackle all the challenges you might face. 
  • Business Setup Consultants: Many professional firms in Dubai offer business setup consultation, such as real estate license procurement. They can effectively handle many of the activities necessary to set up your business, including handling bureaucratic hurdles and intricate paperwork. 

Although securing these professional services are more expensive than trying to set up your real estate agency on your own, they could prove worth the cost. Consider if the cost is worth the amount of time and stress having professional help can save you, and how these experts might help you better navigate the agency requirements, ensuring  an easier and seamless application process.

Key Takeaways

Setting up a real estate agency in Dubai requires several licenses and submitting numerous documents and fees before operating with an official legal stamp of approval for your brokerage. However, securing the proper licenses and following the rules gets you access to the hottest real estate market in the world! 

Once your agency is up and running, get access to the best tools and most qualified real estate leads with Property Finder, the UAE’s leading real estate portal. With our platform, you can list your properties and tap into a massive database of potential buyers actively searching to buy or rent apartments, luxury homes, villas, and even commercial spaces  in Dubai. 

Disclaimer: This article provides general information and is not a substitute for professional legal advice. We highly recommend that you contact a lawyer for updated and personalized guidance based on your situation and business goals.

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