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UAE: Law Allows Foreigners to Own Real Estate Properties in Abu Dhabi’s Investment Zones

(May 1, 2019) On April 17, 2019, Sheikh Khalifa bin Zayed Al-Nahyan, the governor of Abu Dhabi and the president of the United Arab Emirates (UAE) issued a new, unnumbered law that amends Law No. 19 of 2005 regulating the ownership of real-estate properties. The new amendment allows foreign individuals and foreign legal entities to own and acquire all rights over properties in the investment zones of Abu Dhabi. (Sheikh Khalifa bin Zayed Issues Law Amending Real Properties Law in Abu Dhabi, AL-EMARAT AL-YOUM (Apr. 17, 2019) (in Arabic).) Previously, foreigners were allowed to own only the property and not the land on which the property was built. Ownership of land and real estate was permitted only for nationals of the UAE and Gulf Cooperation Council (GCC) countries. (Abu Dhabi Enacts New Property Ownership Rules for Foreigners, THE NATIONAL (Apr. 18, 2019).)

The 2019 law amends articles 3 and 4 of Law No. 19 of 2005. The amended article 3(i) stipulates that there are three categories of entities and individuals who have the right of real property ownership:

  • Emirati citizens and legal entities, such as corporations
  • Public holding corporations owned by foreigners, whose share of ownership must not exceed 49%
  • Anyone who owns a property by a decree issued from the Abu Dhabi Crown Prince

Furthermore, article 3(ii) now provides that foreign individuals and legal entities have the right to own and acquire all deeds of real estate properties located in the investment zones of Abu Dhabi. (Khalifa bin Zayed Issues Law Amending Real Properties Law in Abu Dhabi, AL-ITTIHAD (Apr. 17, 2019) (in Arabic).)

In accordance with the amended article 4 of Law No. 19 of 2005, the holders of a usufruct for more than ten years have the right to mortgage the property without the consent of the landlord. On the contrary, the property owner may not mortgage the property without the consent of the usufruct holder. Article 4 grants to both parties the right to agree otherwise. (Id.)

Shaikh Khalid bin Mohammad bin Zayed Al-Nahyan, the UAE president’s son and chairman of the Abu Dhabi government’s Executive Committee of Investment Zones of Abu Dhabi, has endorsed the new law, announcing that it adheres to the economic vision of the government of Abu Dhabi through 2030 in its aim to develop the economic sector of the country. (The Government of Abu Dhabi, The Abu Dhabi Economic Vision 2030 (Nov. 2008).) It also encourages investors to invest more in the real properties sector and own more lands in the Abu Dhabi investment zones. (Khalifa Issues Law Amending Real Estate Regulations, Property Ownership in Abu Dhabi, GULF NEWS (Apr. 18, 2019).)

Craig Plumb, head of research at Consultancy JLL, a company specializing in property services and investment management, has stated that the new amendments to Law No. 19 of 2005 would create a balance between Abu Dhabi and Dubai, where foreigners are already permitted to buy freehold property in investment zones. (Abu Dhabi Enacts New Property Ownership Rules for Foreigners, supra.)