Tim Elliott
Welcome to Lawgical, the UAE’s first and still the only legal podcast. My name is Tim Elliott. Lawgical is brought to you by the Dubai-based legal firm, HPL Yamalava and Plewka. And as always, here is the managing partner, our legal eagle, Ludmila Yamalova. Good to see you.
Ludmila Yamalova
Good to be with you here, Tim, as always.
Tim Elliott
Now in this episode, Ludmila, big news here in Dubai. I think it’s fair to say you hear that phrase a lot, but I think this is an important development. It always kind of feels like everybody here loves their real estate. It’s a major part of Dubai’s economy, of course. Now, real estate brokerage or opening a brokerage firm has been recategorized as a professional activity by the Dubai Department of Economic —Dubai Economy. What does that mean? Let’s break it down. It’s now the case that in brokerage and real estate, if you’re a foreigner, I could, for example, open a real estate brokerage here in Dubai.
Ludmila Yamalova
Indeed. And why this is interesting is two reasons. One is that legally, you can do it now. And two, a lot of people might actually find it surprising to know that it wasn’t possible in the past. Because let’s face it, there are a lot of real estate brokerages here, and real estate brokers who over the years have always said, “It’s my brokerage firm” or “It’s owned by such-and-such foreigner.”
But I’ll tell you, technically speaking, throughout all this time until basically now, every real estate brokerage was not only owned by a local shareholder but had to exclusively be owned 100% by a UAE national.
Tim Elliott
That’s surprising.
Ludmila Yamalova
Yes, it could not even be owned as your typical LLC, which in the past required a 51% UAE national and 49% expatriate split. There was an additional legal requirement that certain businesses, including real estate brokerages, had to be owned 100% by a UAE national. Other examples included industries like insurance and recruitment companies.
Yet, over the years, you’d always hear people claiming to own real estate brokerage firms. But if you ever checked their trade license, it would show that these licenses were fully owned by Emiratis. The arrangement often involved power of attorney or side agreements that gave foreigners operational control of the company. However, legally speaking, the Emirati retained ownership.
Tim Elliott
And those side agreements weren’t enforceable, right?
Ludmila Yamalova
Exactly. They worked until a problem arose. When issues did arise, the law was clear—it was a locally owned company.
Last year, significant legislative changes were introduced, including amendments to the UAE’s company laws. One groundbreaking change eliminated the requirement for local ownership of most businesses. Previously, the default rule was that all businesses required a local partner unless explicitly exempted. Now, the reverse applies—foreigners can own businesses unless specifically restricted by law.
Tim Elliott
That’s a significant shift.
Ludmila Yamalova
It really is. The changes apply to businesses outside of industries of strategic importance, such as state security and nuclear energy. For real estate brokerages, this means the 100% Emirati ownership rule no longer applies. In Dubai and Abu Dhabi, brokerage firms are now classified as professional activities, meaning foreigners can own 100% of these businesses.
Tim Elliott
This follows a similar announcement in Abu Dhabi. If I decided to set up Tim’s Real Estate Brokerage in Dubai, I could get a Department of Economic Development (Dubai Economy) license, open an office, and hire staff. But I’d still need to appoint a local service agent. What exactly does that agent do?
Ludmila Yamalova
A local service agent is just that—an agent. They are not a shareholder, officer, or decision-maker in the company. Their role is limited to acting as a local contact, primarily for the purpose of accepting service, such as legal notices, on behalf of the business.
The service agent has no control over the business, and their appointment is purely contractual. You can change the agent at any time, and there is no mandatory fee—this is negotiated between the business owner and the agent.
Tim Elliott
So Tim’s Real Estate Brokerage is up and running. It’s important to note that nothing has changed in terms of regulation. Real estate brokerages still need to be registered with RERA, correct?
Ludmila Yamalova
Yes, exactly. In Dubai, real estate brokerages must be licensed by RERA, the Real Estate Regulatory Agency. In addition to the trade license from Dubai Economy, the company and its brokers must obtain RERA licenses.
All brokers must complete RERA training, pass exams, and carry a RERA card. The industry remains regulated for good reason, and RERA continues to oversee real estate activities in Dubai.
Tim Elliott
Legally speaking, what’s the process for setting up a real estate brokerage from scratch?
Ludmila Yamalova
The process remains similar to setting up any new company. You’d start with an application to Dubai Economy for a real estate brokerage license. You’d also need approvals from RERA, including proof of completing their training and exams. Once you’ve secured a license, you’d need to find and register an office space under the company’s name.
Since this law is relatively new, the exact timelines and processes are still evolving. But as a general rule, setting up a new brokerage might take a few months.
Tim Elliott
What about existing brokerages? Can they now be fully owned by foreigners?
Ludmila Yamalova
The new law doesn’t automatically apply to existing companies. If you have an existing brokerage with a local partner, you’ll need to follow the proper legal procedures to transfer their shares. This requires mutual agreement between you and your local partner.
What’s changed is that now, local partners can legally transfer their shares to foreigners. Previously, that wasn’t an option. However, the terms of the transfer, including costs, will depend on your agreement with the local partner.
Tim Elliott
Why now?
Ludmila Yamalova
This change is part of the UAE’s broader initiative to make the country more competitive and business-friendly. Allowing 100% foreign ownership removes barriers and encourages foreign investment.
Tim Elliott
That’s another episode of Lawgical, focusing on the news that real estate brokerages can now be 100% foreign-owned in the UAE, provided a local service agent is appointed. Ludmila Yamalova, managing partner at Yamalava and Plewka in JLT, thank you once again.
Ludmila Yamalova
Thank you, Tim. Always a pleasure.
Tim Elliott
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