Laws, UAE

Commercial Property Leasing in Dubai

Dubai is rated as one of the best locations for company establishment. Modern business structures, transparent processes, and tax regulations are just a few of the features that make it a desirable choice. Businesses who want to lease a commercial space in Dubai must follow a certain procedure and meet the requirements for eligibility stipulated by the government.

Today, we’ll go over all the procedures, requirements, and other important information pertaining to leasing commercial property in Dubai. Let’s first clarify the difference between leasing and renting commercial properties before moving on.

In Dubai, RENTING VS. LEASING COMMERCIAL PROPERTY

The terms lease and rent are frequently used interchangeably and are commonly mistaken with one another. But buying a property may be done in two distinct ways: renting and leasing.

In exchange for rent, the tenant in a rental property is granted temporary access privileges to the property. Depending on what the parties have agreed upon, the time frame may range from an hour to years.

In contrast, a property is normally leased for a longer length of time—up to 99 years—which may be shortened in specific situations. Additionally, a new contract must be executed between the parties when the existing one expires.

Now that you are aware of the distinction between rent and leasing, let’s explore Dubai’s commercial property leasing opportunities in more detail.

COMMERCIAL LEASE TYPES

Here are Dubai’s four main types of leasing agreements.

GROSS LEASE

In a gross lease, the landlord is in charge of paying taxes, property upkeep, and insurance in addition to the rent that the tenant is required to pay. The most fundamental form of leasing is a gross lease.

LEASE OF LAND

Land leases, as the name suggests, permit tenants to develop on a plot of land. All additional costs associated with constructing and employing the building for business purposes must be borne by the Tenant. The landlord will buy the property when the contract has reached its maturity.

TRIPLE NET LEASE

Landowners benefit from a Triple Net lease. Tenants are responsible for keeping the building up and paying the rent under this sort of lease. Other hidden costs of owning a house in Dubai, such as paying property taxes, are also included in the expenses.

LEASE MODIFIED NET

Tenants and landowners split all costs evenly under the Modified Net Lease.

COMMERCIAL PROPERTY LEASING IN DUBAI: HOW TO DO IT

All the steps needed to lease a commercial property in Dubai are listed here.

ASSESSMENT OF FULFIL ELIGIBILITY

To lease commercial property in Dubai, companies must first get a trade license from the Dubai Economic Department. It limits the locations in which enterprises may lease property while also enabling them to operate lawfully in the Emirate. If your commercial property is in a freezone, the freezone’s authorities will grant the license.

Determining whether the business will be offshore or onshore is also important, in addition to the license. Companies must co-own their operations with an Emirati if they are onshore. However, if the company is operating from one of Dubai’s free zones, this requirement is not applicable.

SELECT THE TYPE OF OFFICE

The sort of commercial space that the company has rented will determine how many employment visas it may sponsor. Therefore, make a list of the amount of workers you intend to sponsor before looking through commercial properties for rent in Dubai.

The number of visas permitted according to the size of the office is as follows:

Companies using Flexi-desk, commonly known as shared offices, are permitted to sponsor up to 3 work visas.
Up to 5 visas may be sponsored by companies that have service offices.
The number of visas is based on the number of completely leased physical offices and the size of the premises. 9 Sqm of the office space may accommodate 1 visa application.

REQUIRED DOCUMENTS FOR ALIGN

The following are the paperwork necessary for leasing commercial premises in Dubai.

Evidence of business ownership
Status of the premises that must adhere to current plans
Passport or Emirates ID (Copy)
trade permit (Copy)
NOC (for expats) (for expats)
Credit rating
Statements of personal and corporate finances

These are the standard set of paperwork needed to rent out business property. Other documentation might or might not be requested by the landowner or the authorities. It is advised to use a real estate agent in Dubai for convenience.

COMMERCIAL PROPERTY SEARCH

Once you’ve completed all the processes, it’s time to look for the ideal piece of commercial real estate for your workplace. Decide first if you want to live in a freehold region or a mainland area. Finding a suitable commercial property is the next stage, for which you may either use internet portals or get in touch with a real estate professional.

APPLICATION FOR EJARI

After you have finished looking over the property, you should prepare and sign the lease agreement. A government agency called Ejari Dubai is in charge of managing all real estate deals. Therefore, be sure to include all of Ejari’s provisions when signing the lease agreement for a commercial property in Dubai. Additionally, as soon as your contract is signed, register it with Ejari.

FEE AND CHARGE PAYMENT

Leases are not included in the list of VAT-free real estate transactions. Tenants are therefore obligated to pay the VAT on the lease. Tenants will also be responsible for paying for the furnishing office, utilities, and general property upkeep. Depending on the kind of lease and any mutual agreements between the landlord and renters, these costs may change.

LEASED COMMERCIAL PROPERTIES RENT PAYMENT

Cheques are frequently used to pay rent for commercial properties, same like they are for residential rentals. The tenant’s personal account or the business account may be used to write the check. The tenant must, however, provide post-dated checks as required by law. The parties agreed that a security deposit that is refundable equals 5% of the entire annual rent.

This article is only offered for educational purposes, providing a general understanding of its material, including relevant laws and regulations, and is not meant to provide specific legal advice. The Blog is not meant to take the place of qualified guidance from a licensed professional.