Question 1

Can foreigners buy commercial property in Dubai?

Accepted Answer

Yes. Foreign nationals and companies can buy commercial property freehold in Dubai's designated freehold zones - the same zones open for residential - with no UAE citizenship or residency required. Ownership is registered with the Dubai Land Department, giving full rights to sell, lease, mortgage or bequeath. Offices, retail units and warehouses all qualify. Outside freehold zones, leasehold terms of 30-50 years typically apply.

Question 2

Which freehold zones let foreigners buy commercial property in Dubai?

Accepted Answer

Foreigners can buy commercial freehold in designated zones including Business Bay, JLT, DIFC, Dubai Marina, Barsha Heights (Tecom) and Dubai South, plus industrial areas like Dubai Investment Park. As of 2026 there are 60+ freehold areas, and the list keeps growing as new master communities launch. Outside these zones, foreigners hold leasehold rights of 30-50 years rather than outright ownership.

Question 3

Is 5% VAT charged when buying commercial property in Dubai?

Accepted Answer

Yes. Selling commercial property in Dubai - offices, retail, warehouses, hotels, factories - is a standard-rated supply subject to 5% VAT on the sale price. This differs from residential property, which is generally VAT-exempt (a new home's first sale within three years of completion is zero-rated). The separate 4% DLD transfer fee itself is not subject to VAT.

Question 4

Do I pay VAT on commercial rent in Dubai?

Accepted Answer

Yes. Leasing commercial property in Dubai is standard-rated at 5% VAT, charged by the landlord on top of the rent, whereas residential rent is exempt. A landlord letting offices, shops or warehouses must register for VAT once taxable turnover exceeds the AED 375,000 threshold, then charge tenants 5% on rent and often on service charges too.

Question 5

Can I recover the 5% VAT paid on a commercial property purchase?

Accepted Answer

Generally yes. A VAT-registered buyer using the property for taxable business - leasing it out or as an office - can recover the 5% input VAT paid on purchase. On secondary-market sales the buyer often pays the 5% directly to the FTA via EmaraTax before the title deed transfers at the Land Department. Confirm treatment with a tax advisor.

Question 6

Do commercial properties in Dubai yield more than residential?

Accepted Answer

Usually yes on gross yield. Residential averages roughly 6-8% gross, while commercial ranges 6-12% by type - offices 6-10%, retail 7-12%, warehouses 8-12%. But commercial carries narrower buyer pools, slower resale (3-9 months on market), higher service charges and 5% VAT, so net returns land below the headline gross figures.

Question 7

What returns do warehouses in Al Quoz and DIP offer?

Accepted Answer

Industrial and warehouse assets in Al Quoz, Dubai Investment Park (DIP), Jebel Ali and Dubai Industrial City deliver some of Dubai's highest yields - around 8-12% gross - driven by e-commerce and logistics demand against limited supply. Q1 2026 rents ran near AED 65/sqft in Al Quoz and AED 48/sqft in DIP, both up over 30% year-on-year. Tenants typically sign multi-year leases.

Question 8

What yields do offices in Business Bay, JLT and DIFC give?

Accepted Answer

Standard offices in Business Bay and Tecom yield roughly 7-10% gross, while premium DIFC and Downtown offices compress to 6-8% on scarcity and strong tenant covenants. Business Bay units start around AED 1.7M for ~430 sqft; JLT averages ~AED 5.6M and is more accessible than central districts. DIFC operates under its own independent registry and legal jurisdiction.

Question 9

Are retail shops a good commercial investment in Dubai?

Accepted Answer

Retail is Dubai's highest-yielding commercial segment - roughly 7-12% gross for mall units and 6-10% for street retail. Top malls such as Dubai Mall and Mall of the Emirates trade around 7-9% with premium-tenant security. Prime-footfall areas (Downtown, Dubai Marina, JBR, City Walk) command the strongest rents; JBR street retail saw 12-18% rent growth in 2024-2025.

Question 10

How much are service charges on commercial property in Dubai?

Accepted Answer

Commercial service charges are generally higher than residential, typically AED 3 to AED 30 per square foot depending on building, location and amenities. They commonly consume 15-25% of gross rental income and can cut net yield by 100-200 basis points below the gross figure, so always factor them in when comparing headline yields across assets.

Question 11

How much does an office fit-out cost in Dubai?

Accepted Answer

Office fit-out runs roughly AED 200-400/sqft for a light Category A refurbishment, AED 400-700/sqft for standard Category B, and AED 700-1,500/sqft for premium turnkey work. Shell-and-core units need full fit-out before occupancy, with authority approvals (Municipality, Civil Defence, DEWA) and typical timelines of 8-16 weeks. Budget this separately from the purchase price.

Question 12

Is Ejari registration required for a commercial lease in Dubai?

Accepted Answer

Yes. Every commercial tenancy in Dubai must be registered through Ejari to be legally valid, using the unified tenancy contract signed by both parties. Registration costs roughly AED 155-220 online via the Dubai REST app, usually within one to two working days. A valid Ejari is needed to license a business at the address, connect DEWA and file rental disputes; it renews annually.

Question 13

How much deposit do I need for a commercial mortgage in Dubai?

Accepted Answer

Commercial mortgages need larger deposits than residential. The regulatory maximum LTV is around 80% (20% down), but in practice lenders usually require 20-35% down, and more for non-residents or specialised assets like warehouses. Banks separate owner-occupier loans (business trades from the site) from investment loans (income from rent), underwriting and pricing each differently.

Question 14

What are typical commercial mortgage terms and rates in Dubai?

Accepted Answer

Commercial mortgage tenures typically run up to 15 years - shorter than residential (up to 25). Rates are generally higher than residential and usually variable, as fixed rates are rarely offered on commercial loans. The Central Bank of the UAE sets the LTV framework. Lenders assess the asset, tenant covenant and the borrower's business, so terms vary widely by deal.

Question 15

What fees apply when buying commercial property in Dubai?

Accepted Answer

Expect a 4% DLD transfer fee on the property value - legally split 2% seller / 2% buyer, but usually paid in full by the buyer - plus a trustee/registration fee of about AED 2,000-4,000 (with 5% VAT on that fee), agency commission (typically 2%), and 5% VAT on the sale price for commercial assets. Dubai levies no annual property tax.

Question 16

Does buying commercial property qualify me for the Golden Visa?

Accepted Answer

Yes. A commercial property worth at least AED 2 million can qualify a foreign investor for the 10-year UAE Golden Visa, based on the DLD title-deed value. Mortgaged and combined holdings count toward the threshold, and a February 2026 circular removed the earlier down-payment requirement. Some sources say eligibility applies only to select DLD-approved office or retail units - confirm before buying.

Question 17

Is labour accommodation a good investment in Dubai?

Accepted Answer

Staff/labour accommodation in industrial zones like DIP, Al Quoz, Jebel Ali and Ras Al Khor is a high-yield niche, with operators citing ROI of about 15-20% amid chronic workforce-housing shortages. Q1 2026 rents rose over 30% year-on-year across primary sites. All-inclusive corporate leases mean operating costs run 20-30% of gross income, and units must meet municipality accommodation standards.

Question 18

What is a commercial sale-and-leaseback in Dubai?

Accepted Answer

In a sale-and-leaseback, a business sells the premises it occupies to an investor and simultaneously leases it back on a long-term contract. The occupier frees up capital while staying put; the investor gains an immediate tenant on a multi-year lease. Dubai commercial leases commonly run 3-10 years, providing the predictable income these deals rely on. Check structure and VAT treatment with advisors.

Question 19

What is the difference between freehold and leasehold commercial property?

Accepted Answer

In freehold zones, foreigners own the commercial unit outright and can sell, lease or mortgage it. Outside those zones, only leasehold applies - usufruct or long leases of 30-50 (sometimes 99) years, after which the asset reverts to the landowner. Freehold is preferred for liquidity, financing and long-term control. Always verify the exact title type, as banks treat leasehold and strata assets differently.

Question 20

Can I buy a whole floor or whole commercial building in Dubai?

Accepted Answer

Yes - investors can buy a single strata unit, a whole floor, or an entire commercial building. Whole-floor and full-building deals suit larger investors seeking single-tenant or owner-occupier control, while sub-AED 3M strata office units in Business Bay or Barsha Heights are the most accessible entry point. Minimums, financing and title type vary by asset, so confirm details before committing.

🏢 Commercial Property