The Dangers of Personally Owning UAE Real Estate

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Thinking of investing in UAE real estate? 

You’re not alone, people from all over the world invest in the UAE. Regardless of what type of real estate you are planning on purchasing, you need to plan your investment properly to maximize profits. 

Investing in UAE real estate in your individual name has its downsides, including:

  • Additional transfer taxes
  • Reduced privacy
  • Operational complexity
  • Lack of asset protection
  • Estate planning challenges

Many of these challenges can be easily solved, RAKICC entities provide significant advantages over buying property as an individual.

The Ras Al Khaimah International Corporate Center (RAKICC) is a corporate registry responsible for the registration and incorporation of companies in Ras Al Khaimah, United Arab Emirates.

Transfer Tax 

RAKICC entities are not subject to taxation, even on the profits from the sale or lease of local real estate. Excluding the Dubai International Financial Center, the UAE imposes a 4% tax on the transfer of real estate. 

However, this tax does not apply to the transfer of shares of a company – even if that company owns UAE real estate. Thus, it’s possible to avoid the 4% transfer tax when you sell your RAKICC company, which owns UAE real estate, rather than the UAE real estate itself.

Banking

It is simple to have your banking needs met with a RAKICC entity. Credit is available with proper documentation.

Esquire can introduce you to several banks upon request.

Privacy & Security 

RAKICC entities also provide privacy and security. Real estate ownership is not public record. RAKICC does not have a public beneficial owner registry making it possible to own several properties without public disclosure. Negotiating the sale or lease of a property pseudonymously can be advantageous. Shielding your identity motivates others to deal in good faith. 

Real estate owners can help protect their wealth against frivolous lawsuits and fraudulent claims by creditors. A RAKICC entity effectively isolates the assets it owns creating an additional hurdle which creditors must overcome to attack your wealth.

Convenience

Passive real estate investors can own property through a RAKICC entity and appoint a director to handle the day-to-day operations of rentals.

Easy to Use

Administratively, it is simpler and cleaner to divide ownership of a property amongst several parties is significantly easier through shares of a RAKICC than having several people on a title. Different classes of shares can have varying rights over the properties owned by the company.

Sharia

RAKICC entities are also useful tools in estate planning. If desired, individuals have the flexibility to structure their affairs so that  Sharia Law inheritance rules don’t apply.

Value

In relation to the price of even modest real estate purchases, the cost of forming a RAKICC entity is minimal. Yet, the advantages are extensive and significant.

Esquire Corporate Services is a full-service corporate service provider. Our knowledgeable specialists can help you form an entity that is tailored to your specific needs. We’ll make sure you understand how to properly use your entity to maximize its benefits.

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