Ludmila Yamalova: Welcome and welcome back. This is Ludmila with Lawgical with LYLAW. To recap, in the previous segment we discussed the issue of a security deposit in rental relationships in the U.A.E. In this segment, we’ll talk about residence visas in connection with owning property in the U.A.E.
The general rule is that questions on residence visas are subject to the U.A.E. federal law, and that is immigration laws apply equally to all emirates. There is no federal law allowing for issuance of a U.A.E. residence visa on the basis of owning property. Certain emirates, however, have come up with different options, allowing owners to have the benefit of a U.A.E. residence visa.
In the past, the emirate of Dubai in particular had a practice allowing owners of properties to have a residence visa, and that included properties that were ready and those that were still off plan. There are no other requirements regarding the specifications of the properties or the value of the properties in order to qualify for a U.A.E. residence visa. That was in the past.
A few years late, the U.A.E. had reinforced the importance of having a uniform immigration policy across all emirates. At that point, the practice of granting property visas directly based on the ownership of properties ended. A number of years later, Dubai had introduced a different option, allowing investors to have the benefit of a U.A.E. residence visa. This time, the U.A.E. residence visa is based more on company laws which are subject to individual emirates’ regulations.
These days, it is possible for investors in Dubai to have the benefit of a residence visa if those properties qualify. In general terms in order for property to qualify, it has to be a freehold property. It may not be a leasehold and it must be a ready property, no longer off plan properties. Furthermore, it only applies to properties that are registered with the Dubai Land Department and therefore it excludes all the properties that are based in the DIFC. The value of the property has to be at least a million dirhams. If there is a mortgage on the property, the mortgage has to be paid off at least 50% and there is a requirement of an NOC from the bank. The property must not be granted. In other words, it cannot be passed down as a gift.
Those properties that meet these requirements can be used as a basis for owners to apply for a residence visa. To do this, they will approach the Land Department, and this entire process is done through the Land Department. One of the steps in the process will involve CID approval, which refers to the Criminal Investigation Department. CID approval will be done on the individual applicants, and if there is more than one, the approval will have to be granted for all of the applicants.
There will also be a requirement of health insurance and generally a payment of about 16,000 dirhams to the Land Department, which will be divided up between the various fees going to different authorities and also is inclusive of the license fee and the health insurance.
The residence visa that is issued on the basis of this structure is a full-fledged residence visa that gives investors full-fledged rights as any other resident in the U.A.E., but it is only for two years. It can be renewed as long as the property continues to be owned by the investors. If there are multiple owners and all owners want to receive a property visa, each one of them has to have a fraction that is equivalent at least to one million dirhams. In other words, if you have two owners and the property is worth 2 million dirhams and the owners have a 50/50 interest in the property, then they will both qualify. If, however, the property is worth 1.5 million and both owners wish to apply for a residence visa, they will not qualify. The residence visa, however, does give owners the right to sponsor their spouses and their domestic staff. This is because it is a normal residence visa that comes with the same benefits and rights as for anyone else having a residence visa in the U.A.E., which is most of the time associated with employment. Also, if the same owner has multiple properties, but each one of those properties is below 1 million dirhams, the properties may not be combined for the purposes of qualifying for this residence visa.
Recently, Dubai has introduced yet another structure allowing investors to own properties potentially which meet different qualifications and may exist outside of Dubai. In particular, this is done through what is called the JAFZA Offshore Corporate Structure. JAFZA refers to the Jebel Ali Free Zone Authority. Recently, JAFZA has introduced new regulations allowing JAFZA offshore companies to own properties outside of Dubai. Another regulation that JAFZA has introduced is allowing those JAFZA offshore companies which own properties to qualify to apply for a U.A.E. residence visa. However, the requirements for the properties in this particular structure have not yet been released. In other words, it is not clear today whether properties must be of specific value and what other potential requirements might be attached to this particular structure. However, it is clear that JAFZA offshore companies from now on will be able to own properties outside of Dubai and those who are associated with these JAFZA offshore companies, be it shareholders or officers or directors, may qualify for a U.A.E. residence visa on the basis of those companies owning properties.
This concludes our segment on U.A.E. residence visas in connection with owning properties. Thank you for listening. Stay tuned for our next segment discussing issues of inheritance of real estate assets in the U.A.E.
Hanan: Hello. This is Hanan Arab. Thank you for listening to our Managing Partner, Ludmila Yamalova from HPL Yamalova & Plewka DMCC. If you have any further questions or would like any specific clarifications, feel free to contact us at info@Lylawyers.com. You can also find other ways of contacting us on our website, www.Lylawyers.com. That’s all for now. See you next week.