Decree No. (22) of 2022
Approving the Grant of Privileges to Real Estate
Investment Funds in the Emirate of Dubai[1]
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We,
Mohammed bin Rashid Al Maktoum, Ruler of Dubai,
After
perusal of:
Federal
Law No. (5) of 1985 Issuing the Civil Code of the United Arab Emirates and its
amendments;
Federal
Law No. (4) of 2000 Establishing the Emirates Securities and Commodities
Authority and Market and its amendments;
Federal
Law by Decree No. (32) of 2021 Concerning Commercial Companies;
Law No.
(3) of 2003 Establishing the Executive Council of the Emirate of Dubai;
Law No.
(7) of 2006 Concerning Real Property Registration in the Emirate of Dubai and
its amendments;
Law No.
(13) of 2008 Regulating the Interim Real Property Register in the Emirate of
Dubai, its amendments, and its Implementing Bylaw;
Law No.
(7) of 2013 Concerning the Land Department;
Law No.
(1) of 2016 Concerning the Financial Regulations of the Government of Dubai and
its Implementing Bylaw;
Law No.
(4) of 2019 Concerning the Real Estate Regulatory Agency;
Law No.
(6) of 2019 Concerning Ownership of Jointly Owned Real Property in the Emirate
of Dubai;
Law No.
(5) of 2021 Concerning the Dubai International Financial Centre;
Decree
No. (22) of 2009 Concerning Special Development Zones in the Emirate of Dubai;
Decree
No. (4) of 2010 Regulating the Transfer of Title to Granted Industrial and Commercial
Land in the Emirate of Dubai;
Regulation
No. (3) of 2006 Determining Areas for Ownership by Non-UAE Nationals of Real
Property in the Emirate of Dubai and its amendments;
Executive
Council Resolution No. (30) of 2013 Approving the Fees of the Land Department;
Executive
Council Resolution No. (37) of 2015 Regulating the Real Property Valuation
Profession in the Emirate of Dubai; and
The legislation
establishing and regulating free zones in the Emirate of Dubai,
Do
hereby issue this Decree.
The following words and expressions, wherever mentioned in this Decree,
will have the meaning indicated opposite each of them unless the context
implies otherwise:
|
Emirate: |
The Emirate of Dubai. |
|
Ruler: |
His Highness the Ruler of Dubai. |
|
Government: |
The Government of Dubai. |
|
Executive Council: |
The Executive Council of the Emirate of Dubai. |
|
DLD: |
The Land Department. |
|
Director General: |
The director general of the DLD. |
|
Competent Entity: |
The authority in charge of licensing and
regulating Funds in accordance with the legislation applicable by it. This
includes the Securities and Commodities Authority and the Dubai Financial
Services Authority of the Dubai International Financial Centre. |
|
Committee: |
The Real
Estate Investment Funds Committee formed
pursuant to this Decree. |
|
Fund: |
A fund licensed by the Competent Entity to
conduct the Activity of investing in Real Property assets in the Emirate. |
|
Real Property: |
Anything which is fixed and cannot be moved
without damage or alteration of its structure. For the purposes of this
Decree, this does not include vacant land. |
|
Real Property Register: |
The Real
Property register regulated pursuant to the above-mentioned Law No. (7) of
2006. |
|
Register: |
The electronic record maintained by the DLD
for registering Funds, and enabling them to avail of the privileges
prescribed under this Decree. |
|
Areas for Ownership by Non-UAE Nationals of
Real Property: |
The areas designated by the Ruler in which
non-UAE nationals may acquire freehold ownership rights over Real Property
without time restriction, or usufruct or lease rights for up to ninety-nine
(99) years. |
This
Decree applies to:
1. all Funds which
are regulated by a Competent Entity and licensed by it to operate in the
Emirate, including in Special Development Zones and free zones, such as the
Dubai International Financial Centre; and
2. all Real Property
in the Emirate, including those in Special Development Zones and free zones, but
excluding those existing within the Dubai International Financial Centre.
This Decree aims to:
1. promote the
Emirate as a global Real Property investment destination;
2. award incentive privileges to encourage Funds
to invest in various Real Property projects in the Emirate;
3. attract
international real estate investment funds to conduct their investment
activities in the Real Property sector of the Emirate; and
4. increase
investments in the Real Property market in the Emirate by achieving long-term
capital returns for the shareholders of Funds.
a. A register known
as the “Real Estate Investment Funds Register” will be maintained by the DLD
for registering the Funds which meet the registration requirements, and which
are eligible for availing of the privileges prescribed under this Decree.
b. The Director
General will determine, pursuant to a resolution he issues in this respect, the
form of the Register and the information that must be entered in it.
a. The registration
of a Fund in the Register is subject to the following requirements:
1.
The Fund must be
licensed by the Competent Entity, and its licence must be valid.
2.
The value of the
Real Property assets owned by the Fund at the time of submitting the
application for registration on the Register must not be less than one hundred
and eighty million dirhams (AED 180,000,000.00).
3.
At the time of
submitting the application for registration on the Register, the Fund must not
be suspended from trading its shares in the financial markets in the Emirate.
4.
A fee of ten
thousand dirhams (AED 10,000.00) for registration on the Register must be paid
to the DED.
b. The DLD will, in
coordination with the concerned entities, regularly verify that all the
requirements stipulated in paragraph (a) of this Article, including those related
to the value of the Real Property assets owned by the Fund, continue to be met
throughout the validity of registration of the Fund on the Register, as evidenced
by the annual financial reports audited by an external auditor and submitted to
the Competent Entity.
c. The procedures for
registration on the Register and the relevant documents that must be provided
to the DLD will be determined pursuant to the relevant resolution issued by the
Director General for this purpose.
a. A Fund will be struck
off the Register in any of the following cases:
1.
where it ceases to
meet any of the requirements stipulated in sub-paragraphs (a)(1), (a)(2), or
(a)(3) of Article (5) hereof;
2.
where it is
declared bankrupt pursuant to a definitive court judgment;
3.
where it is
dissolved and its assets are liquidated; or
4.
where its
activities are restricted pursuant to a definitive court judgment.
b. Striking a Fund off
the Register will result in suspension of all the privileges granted to it under
this Decree. However, the enjoyment of all privileges by the Fund prior to the
date of striking it off the Register will be deemed valid and legally
effective.
A Fund will enjoy the privileges granted pursuant to this Decree as of
the date on which it is registered on the Register. The enjoyment of these
privileges will continue throughout the validity of the Fund registration.
a.
A Fund registered on the Register may acquire ownership rights
over Real Property existing in the Areas for Ownership by Non-UAE Nationals of
Real Property.
b.
A Fund registered on the Register may acquire freehold
ownership rights, without time restriction, or usufruct and lease rights for up
to ninety-nine (99) years, in Real Property existing outside of the Areas for
Ownership by Non-UAE Nationals of Real Property, as designated by the Committee
formed pursuant to Article (9) hereof.
a. Pursuant to this
Decree, a committee named the “Real Estate Investment Funds Committee” is
formed. The Committee will be responsible for determining the areas and Real
Property, existing outside of the areas designated for ownership by non-UAE
nationals, in which non-UAE nationals may acquire freehold ownership rights
without time restriction, or usufruct or lease rights for up to ninety-nine
(99) years.
b. The Committee
chairman and members will be appointed, and its terms of reference determined,
pursuant to the relevant resolution issued by the Chairman of the Executive Council.
c. In determining the
aforementioned areas or Real Property existing outside of the Areas for
Ownership by Non-UAE Nationals of Real Property, the Committee must verify
that:
1.
the market value of
the Real Property to be owned is not less than fifty million dirhams (AED
50,000,000.0);
2.
the Real Property
to be owned generates a return on investment, as per the relevant criteria
prescribed by the DLD;
3.
the provisions of
the above-mentioned Decree No. (4) of 2010 are complied with, in case of granted
Real Property; and
4.
any other requirements
prescribed pursuant to the relevant resolutions of the Director General are
met.
d. A Fund may not
assign the ownership of any Real Property existing within the areas determined
by the Committee without first obtaining its approval. Any assignment of
ownership made in contravention of this Article will be deemed null and void.
Article (10)
a. Notwithstanding
the provisions of any other legislation, the following rules will apply to the
fees prescribed for the registration of Real Property Dispositions undertaken
by a Fund:
1.
In case of the purchase
of Real Property by the Fund, and registration of the same under its name, the
DLD will collect a fee of two percent (2%) of the market value of the Real
Property. Unless otherwise agreed, this fee will be paid in equal shares by the
seller and the purchaser.
2.
In case of the sale
of Real Property owned by the Fund as part of its Real Property portfolio to
another party, and registration of the same in the name of that party, the DLD
will collect a fee of four percent (4%) of the market value of the Real
Property. Unless otherwise agreed, this fee will be paid in equal shares by the
seller and the purchaser.
3.
In case of
registration by the Fund of a usufruct or long-term lease right regulated by
the above-mentioned Law No. (7) of 2006, the DLD will collect a fee of two
percent (2%) of the market value of the Real Property. Unless otherwise agreed,
this fee will be paid in equal shares by the owner or landlord, and the tenant
or holder of the usufruct right, as the case may be.
4.
In case of
assignment by the Fund of a usufruct or long-term lease right regulated by the
above-mentioned Law No. (7) of 2006, the DLD will collect a fee of four percent
(4%) of the market value of the Real Property. Unless otherwise agreed, this
fee will be paid in equal shares by the Fund, and the new tenant or holder of
the usufruct right, as the case may be.
b. The fees
prescribed by paragraph (a) of this Article will be collected if the subject of
the Real Property disposition is related to any of the Real Property of the Fund,
rather than to the dispositions by shareholders of their Real Property shares
in the Fund.
The Chairman of the Executive Council will be authorised, upon the
recommendation of the DLD, to modify any of the privileges granted to Funds under
this Decree, or to add new privileges to the same.
The President of the
Dubai International Financial Centre is hereby authorised to prescribe the privileges
to be enjoyed by the Funds operating within the centre, and the conditions and
procedures for availing of these privileges.
a. Notwithstanding
the provisions of any other legislation, where the Fund is under incorporation
within the jurisdiction of a Competent Entity, the founders of the Fund may provide
any Real Property they own as an in-kind contribution to the Fund's share
capital and register that property on the Real Property Register. In this case,
the DLD must create an entry on the Real Property registry folio to denote that
the Owner of the Real Property is a Fund which is under incorporation.
b. Upon completion of
the Fund's incorporation process and issuance by the Competent Entity of the
licence required for conducting its activity, the DLD will amend the entry on
the Real Property registry folio to denote that the Owner of the Real Property
is the Fund.
c. Upon completion of
the process stated in paragraph (b) of this Article, the DLD will collect a fee
of fifty thousand dirhams (AED 50,000.00) in return for transferring the
ownership of each Real Property from a founder to the Fund; and will issue a
title deed of that Real Property in the name of the Fund.
For the purpose of valuation of the Real Property assets of a Fund, the
DLD will appoint a Valuer accredited by the Real Estate Regulatory Agency. The
Valuer will conduct a Real Property Valuation of the Real Property assets of
the Fund in accordance with the Valuation standards adopted by the DLD.
The fees collected pursuant to this Decree will be paid to the Public
Treasury of the Government.
With the exception of the resolutions which the Chairman of the
Executive Council is exclusively authorised to issue under this Decree, the
Director General will issue the resolutions required for implementing the
provisions of this Decree. These resolutions will be published in the Official
Gazette.
Any provision in any other legislation is hereby repealed to the extent
that it contradicts the provisions of this Decree.
This Decree will be published in the Official Gazette and will come into
force on the day on which it is published.
Mohammed bin Rashid Al Maktoum
Ruler of
Dubai
Issued in Dubai on 7 July
2022
Corresponding to 8 Thu
al-Hijjah 1443 A.H.
©2022 The Supreme
Legislation Committee in the Emirate of Dubai
[1]Every effort
has been made to produce an accurate and complete English version of this
legislation. However, for the purpose of its interpretation and application,
reference must be made to the original Arabic text. In case of conflict, the
Arabic text will prevail.