Tim Elliot: Welcome to Lawgical, the U.A.E.’s first legal podcast. My name’s Tim Elliot. Lawgical comes to you from the Dubai-based legal firm, HPL Yamalova & Plewka. As always, here is the Managing Partner, Ludmila Yamalova. Nice to see you.
Ludmila Yamalova: Good to see you too, Tim.
Tim Elliot: Today, all about visas once again, but in particular- we have seen so much change, we’ve talked so much about visas- this is another of the specific categories, this is the real estate visa in the U.A.E., Ludmila, something that I think is going to generate much interest.
Ludmila Yamalova: Indeed. It will generate interest across the U.A.E. as a country in general, and not just in specific emirates. This is important because as per this new type of visa, it is ultimately a U.A.E. residence visa that is available for real estate investors.
There are different types of visa, and I will talk about them shortly, but they are all ultimately based on investment in real estate in the country. This new type of visa was introduced most recently by the U.A.E. immigration law. This is Federal Degree 65 of 2022. It is a federal law, and this particular real estate residence visa is now available to all who live in the U.A.E. and invest in any kind of properties or real estate across the U.A.E. This is a very specific dedicated visa for the particular purpose of real estate investment.
This is especially interesting at a high level and a theoretical level. Until recently, the option of having residency on the back of real estate investment was, for the most part, available only in Dubai. This is because Dubai had always led the way of attracting investors, particularly in real estate, and offering solutions that would attract those investors to come into the U.A.E., invest here, and have their interest and ability to come into the country protected. I remembered, however that back in 2008, when I came here, Dubai was offering this kind of a real estate investment visa to anybody who invested in the Dubai real estate market, even for those who invested off plan, but I still remember that back then there was a caveat in all of the sales and purchase agreements that provided this visa at some point in time might not be available anymore. It was still subject to compliance with the U.A.E. immigration law. I remember that clause back then, and I was not quite sure what it really meant in the long run. But in the end, that time did come when the U.A.E. decided that as a country overall it needed to have a uniform immigration policy across the board and having these kind of real estate visas at the time were not part of its immigration policy and for Dubai to continue to do this, it was inconsistent with the federal law. That is when this visa ceased to exist, temporarily at least, and then Dubai was able to carve out another exception, another tool, of making it work and fit the legal framework by ultimately offering a special purpose vehicle through which you could own real estate and it would be on the back of owning a company. As a shareholder of the company, you would then qualify for residency. You would not directly have residency on the basis of your real estate, but rather vis a vis a company. You would set up a company and that company would own real estate, and as a shareholder of that company you would then qualify for a residence visa. That was Dubai’s carveout and it were able to do so because anything to do with company laws is reserved for every emirate, and it can be regulated at the emirate level. For the most part, that is the system that existed until recently, until basically the immigration law started changing as of 2020 and it ultimately culminated in this new immigration law which is the Federal Decree 65 of 2022, which did away with all of these different tools and machinations and variations of different types of companies and such across the U.A.E. into basically one uniform platform. This law now applies to all emirates equally. I suggest the law in many ways, in my opinion, is based on the lessons and experiences perhaps that Dubai had experimented with in terms of these investor visas and real estate visas, and it is now being incorporated into a proper legislative framework. I think there is a lot of positive lessons that we have learned along the way, and this new law is basically incorporating those positive lessons and results in its structure.
Now there is a real estate investor visa, and this is available to anybody who invests in any kind of real estate in the U.A.E. It could be in Fujairah, it could be in Sharjah, it could be in Ras Al Khaimah. It is now possible under the federal immigration law, and it is not emirate specific.
With regard to what kind of real estate, the value of the real estate, and the types of visas, at a high level there are two types of real estate visas.
Tim Elliot: You have the regular and golden. Basically, those are the two?
Ludmila Yamalova: We have two types. There is the regular visa and the golden visa. A regular visa, for those who might be thinking of a green visa, it is not the same as a green visa. This particular real estate visa is not a green residence visa. It is actually, like you said, a regular visa.
As per, once again, the changes from this new law, this regular visa is no longer issued for three years, which was the case until recently, but now it is only for two years. What makes it a regular visa is that you get this visa for two years. Then the other type of visa for real estate is the golden visa which is issued for 10 years, again, as per this new law.
Some might be remembering a five-year visa that existed not long ago, and that was in 2020 when all these laws were being amended in the U.A.E. and there was in fact a real estate visa you could get for five years if your property was worth more than 2 million dirhams, but less than 10 million. I want to clarify that the five-year visa is no longer available and is no longer an option.
Now you only have these two types of visa, either for two years or for 10 years. The two-year visa is the regular visa for the likes of you and me, the simple folks, and then there is the golden visa for the golden folks.
Both visas, by the way, are self-sponsored. Unlike the system that existed before, when you had to have a company and the company ultimately was the owner of the property, so you were being sponsored by that company, now this real estate visa is self-sponsored. You are sponsoring yourself.
Tim Elliot: And the property is the guarantor really, I guess, in this case?
Ludmila Yamalova: Correct. Yes. There is no other buffer or other entity in between. There is no other guarantor. The property is the guarantor. In other words, you don’t require any other kind of entity, buffer, or layer to be involved.
Tim Elliot: Right.
Ludmila Yamalova: Now, to qualify for the regular visa – remember we are talking about a real estate visa, so there has to be real estate – the real estate has to be fully built. That is the requirement, and it has to be fully owned by the applicant, and it must be habitable.
Tim Elliot: When you say fully owned – sorry to but in – does that mean you have to have paid for it outright it could it be mortgaged?
Ludmila Yamalova: I would say you have to own it outright because the requirement in the law is fully owned. Fully owned is when you own it in full. If you are mortgaging it, and the way that particular relationship is reflected on the title in the U.A.E., it shows that there is another owner of the property, and that is the bank. I would argue that is not fully owned. Also, because you have not really paid for it, it is basically not fully owned. It also must be habitable. That means that this does not apply to vacant land. Land does not qualify. The applicant must present proof of real estate ownership, like a title deed, for example, and also have a monthly income of not less than 10,000 dirhams or the equivalent, or to prove some financial solvency in some other way, which is to be determined further.
To apply for this kind of visa, it is done through the Dubai Land Department. One overarching comment about this particular visa is this is for properties or for real estate investments which are less than 2 million dirhams. Let’s say if you have a studio valued at 500,000 or 700,000 dirhams, the regular real estate visa is available for real estate that is worth less than 2 million dirhams. Anything below that, basically you would qualify for this kind of visa. That is the regular visa.
The other real estate visa is the golden visa. If your real estate is worth more than 2 million dirhams, then you would qualify for a golden visa. Importantly, to qualify for this golden visa, you don’t need to have one piece of real estate that is valued at 2 million dirhams. It can be cumulative. You can have, for example, five units valued at half a million each, or 2.5 dirhams, and that cumulative value of real estate will qualify you for the golden visa. The golden visa is 10 years, not five years. Once again, this is a self-sponsored visa without a guarantor. To qualify for this kind of real estate visa, the real estate must be fully owned by the investor. It can be mortgaged, however, and if it is mortgaged, the mortgage must be through an approved U.A.E. bank. That is again, for the property that is worth than 2 million dirhams.
Also, if the property is off plan, even off-plan property qualifies. If it is off plan, it must be bought from a licensed local company and at least 2 million dirhams of the property’s purchase price is paid.
There is one question about the loan or the mortgage. The law does not specifically state that the mortgage has to be paid at least to the tune of 2 million dirhams, the law does not say that, but in practice what we are seeing so far is that the requirement is still there. For off-plan properties, there is still a requirement that you have to pay at least 2 million dirhams in. I would imagine that the same requirement would apply for mortgaged properties. Let’s say if you bought a 10-million-dirham property and you took a mortgage for it, but as part of the mortgage you have already paid into the property 2 million dirhams, then you qualify. But if you had only paid, let’s say 1.5 million dirhams, you would not qualify even though the property itself is worth 10 million dirhams, but because it is mortgaged, the way the government is looking at it, from what we can tell, is they want to make sure you have properly invested into the country in order to qualify. Remember, this is a 10-year visa, so they want to see that you are serious, that you are committed, that you have actually put actual money into the country to give you this eligibility requirement.
The same thing for the off-plan property. Let’s say you bought an off-land property and it is worth 10 million dirhams. You can qualify for the golden visa as long as you have already paid to the developer at least 2 million dirhams.
As is the case with all the other visas, whether it be the requirement for the regular real estate visa or the real estate golden visa, you need to have health insurance. Also, if you want to sponsor your family, you can also sponsor your family, and you will need to make sure you have health insurance for you and your family in order to qualify.
Just as a datapoint, the application fee for the golden residence visa on the back of the real estate investing is 5,000 dirhams, so it is not exorbitantly expensive, especially since you are getting a 10-year visa.
Tim Elliot: That’s about $1,500 for 10 years.
Ludmila Yamalova: Correct. One more thing I wanted to say. Let’s say you have a property and it’s worth 5 million dirhams, and you have two owners in the property. Who qualifies? If it is a husband and wife, you have one of two options. One of the primary owners can have a residence visa.
The 2-million-dirham requirement applies to each person. If you have a property and it is worth 4 million dirhams and you have two owners. In that case, both owners, a husband and wife as business partners, would qualify to apply for the real estate golden visa.
But let’s say the property is 3 million dirhams. The value of the property is enough to qualify, but if you have two owners, then each owner does not qualify. In that case, they would not be able to apply. In order to qualify for the golden visa, which it is a person-based visa, each person’s investment must be at least 2 million dirhams.
Tim Elliot: Okay. That’s another episode of Lawgical. This time, real estate visas in the U.A.E., the ins and outs of the regular residency for the simple folks, like you and me, Ludmila, and the golden visas for the golden folks, which we are not, unfortunately, at least not yet. Our legal expert, as ever, Ludmila Yamalova, the Managing Partner here at Yamalova & Plewka. A very big thank you.
Ludmila Yamalova: Thank you, Tim, for always being here.
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