Buying property under an LLC in the UAE has many potential benefits, especially for entrepreneurs, investors, and business owners. Such a strategy secures your company’s rights and provides a systematic yet tax-efficient way of proper asset management.
Opening a License for Property Ownership
Opening a license for property ownership through an LLC comes with various advantages.
- Asset Protection: The separation of personal and company assets results in reducing personal liability.
- Legal Benefits: Properties owned through an LLC fall under business law and offer superior protection for your rights.
- Estate planning: It provides ease of property transfer and decreases inheritance for whatever is allowed.
Preferred Entity Types
The correct entity to hold property in an LLC is very important.
- Holding Company: Ideal for holding multiple assets (including property) while retaining control.
- Investment Company: Suitable for business concentrations on property leasing or investments.
Best Jurisdictions for Property Ownership
Choosing a jurisdiction depends on your business purpose. Common destinations include:
Free Zones:
Dubai Silicon Oasis (DSO): Reasonable and less time-consuming than the licensing procedure.
Dubai Multi Commodities Centre (DMCC): Known for real estate investment.
Dubai International Financial Centre (DIFC): A destination for international business investors.
Jebel Ali Free Zone (JAFZA): Suited to larger-scale industrial or commercial property.
Mainland
Offers flexibility for property and business operations across the UAE.
Cost and Time Saving Overview
Countries like Dubai Silicon Oasis (DSO) provide license issuance at nominal charges and other time-saving processes.
Achievements: Managing Portfolios Above AED 50 Million
At RAS Corporate Advisors, we have successfully undergone the transfer of property portfolios exceeding AED 50 million into holding companies. Our expertise facilitates seamless transitions while safeguarding our client’s investments.
Financing and Mortgage
When purchasing a property through an LLC, the mortgage is usually determined by your capacity rather than the company’s financial standing. It can be helpful to be aware of this approach while purchasing property.
Is It Safer to Transfer Property to an LLC?
Yes, it is! This automatic transfer of ownership from individual to LLC itself places a clear margin of safety, such as:
- Limiting personal liability.
- Safeguarding one asset from any claim or personal debts.
- Making sure that one has a smoother transition of succession.
Key Costs and Obligations
License Costs
Under an LLC, a license must be obtained from the Department of Economic Development (DED) for the property ownership, and the pricing is competitive and depends on the jurisdiction.
Corporate Tax Registration
As prescribed by UAE regulations:
- Corporate tax registration is a must for any entity.
- A corporate tax charged at 9% shall apply to any revenues exceeding AED 375,000.
VAT Registration
If, on an annual basis, the rental income exceeds AED 375,000, VAT registration becomes a necessity.
- You must apply to the Federal Tax Authority (FTA) for registration.
- VAT is to be charged to all your tenants and subsequently reported.
Opening a Business Bank Account
A business bank account is essential for property-related transactions and rental income management. It also shows compliance with UAE regulations. Find out here how to open a business bank account.
Next Steps: Property Transfer and Registration
To transfer a property under an LLC:
- Registration with the Dubai Land Department (DLD) must be done as an entity.
- Real Estate Regulatory Agency (RERA) registration is to be completed.
- If transferring property as a gift, RERA charges a token fee of only 0.25% compared to the conventional 4% transfer fee.
How can RAS Corporate Advisors help you?
RAS Corporate Advisors has specialized in offering detailed solutions for property transfers under LLC for years. From setting up the license to ensuring tax compliance, we pull together to complete the task most swiftly and securely.
Take the first step towards a secure future for your company by securing your property today.
Contact us now to get started!