Real estate continues to attract a significant share of foreign investment into the UAE. According to available data, approximately 25% of foreign direct investment inflows into the UAE is directed into the real estate sector.[1]

The market has, so far, maintained a notable growth trajectory across several emirates, particularly Dubai and Abu Dhabi. In the first quarter of 2026, the Dubai Land Department (“DLD”) reported a 6% increase in the number of real estate transactions compared to Q1 2025, while the aggregate value of transactions rose by 31% to AED 252 billion.[2] Construction has also remained active, with building permits in Dubai reportedly increasing by 12% year-on-year during the same period.[3]

The scale of Dubai’s market is particularly striking in regional terms. The total value of real estate transactions in Dubai during 2025 reportedly reached approximately US$207 billion – exceeding the combined transaction value of Saudi Arabia, Abu Dhabi, Kuwait, Sharjah, Oman, Ras Al Khaimah, Qatar and Bahrain by roughly US$60 billion.[4]

Abu Dhabi demonstrated similar momentum. The Abu Dhabi Real Estate Centre (“ADREC”) recorded AED 66 billion in transactions in Q1 2026, representing a 160.7% increase compared to the same period in 2025. Transaction values in 2025 had already increased by approximately 44% compared to 2024.[5] Other emirates have also seen continued growth, with Sharjah and Ajman reporting increases in transaction volumes of 40.7% and 12% respectively, in Q1 2026 compared to Q1 2025.

Whether this pace of growth will continue unchanged remains uncertain, particularly in light of ongoing regional instability and broader global economic pressures. Nevertheless, many analysts continue to view the UAE market as comparatively resilient, citing factors such as contained inflation, relatively strong banking liquidity, sustained population growth and continued government support for investment and infrastructure development.[6]

02 – RightsTypes of rights to property

Broadly speaking, UAE property law distinguishes between proprietary rights, i.e. rights touching the property itself, and purely personal rights, such as those arising between parties to a contract.

Property rights (rights in rem)[7]

A right in rem is a proprietary right touching the property itself. It is distinguished from a merely personal claim against another party. In practical terms, it is a distinction between the right of ownership and a contractual right to obtain ownership by transfer. Rights which are less than ownership, known as encumbrances, survive and continue to touch the property even upon change of ownership. A simple example illustrates the distinction. If land is transferred to a new owner subject to a properly registered usufruct right, the new owner will generally acquire the property subject to that existing encumbrance.

Proper registration of a property right is central to the creation, protection and enforceability of that right.[8]

Principal property rights recognized under UAE law include:

  • Ownership: the fullest and most extensive proprietary right that may be registered over property;
  • Musataha: a long-term right that allows its holder to develop a building on land owned by another and to enjoy the use of that building for a period of up to 50 years;[9]
  • Usufruct: a right that permits the holder to use and enjoy property belonging to another, commonly for a term of up to 99 years;[10] and
  • Easement (servitude): a limited right that benefits one property through permitted use of another, such as right of access or passage.[11]

Contractual rights (rights in personam)

A right in personam, by contrast, is a right which one specific person has against another specific person, most commonly on the basis of a contract made between them. Typical examples include rights to payment or to performance of a specific action. Where a personal right is breached, the holder of the right acquires a claim against the party in breach, for the right to be restored by performance or the breach compensated by payment of compensation.

Unlike proprietary rights, contractual rights will generally not bind future owners of the property unless the relevant arrangement has been validly structured and registered in a manner recognized by applicable law (e.g. a registrable long-term lease or musataha contract).

In this paper, we focus primarily on two forms of real estate interests commonly encountered by foreign investors in the UAE: ownership rights and leasehold rights. Short leasehold is one of the key contractual rights to real property.

03 – OwnershipOwnership

As a constitutional matter, legislative authority in the UAE over regulation of real estate principally rests with the federal authorities.[12] The primary piece of federal legislation governing property rights is the UAE Law on Civil Transactions.[13]

In practice, however, each emirate has broad authority to regulate the manner in which federal real estate legislation is implemented and how the real estate is registered within its jurisdiction.[14] It is through these emirate-level regulations that restrictions on foreign ownership are primarily imposed. Notably, Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) freezones have their own property laws which apply to real properties situated there.[15]

Ownership in Dubai

General rule. Under Dubai law, the general position is that ownership of real property is restricted to UAE nationals, GCC nationals, entities wholly owned by them, and public joint stock companies incorporated in the UAE (“PJSCs”).[16]

Designated areas. The principal exception relates to so-called designated areas where foreign persons and companies owned by them can own real estate. These areas are determined by Regulation of the Ruler of Dubai No. (3) of 2006 (as amended) and include, among others, Dubai Marina, Emirates Hills, Palm Jumeirah and Jebel Ali.

Foreign companies. A foreign legal entity incorporated outside the UAE cannot be the holder of registered title to Dubai real estate directly, including within designated areas. It may only do so through a subsidiary established either on UAE mainland or in a freezone that has entered into the relevant cooperation arrangements with the Dubai Land Department.[17]

Freezones currently recognized for these purposes include, among others, Jebel Ali Free Zone (JAFZA), Dubai Multi Commodities Centre (DMCC), DIFC,[18] ADGM,[19] RAK International Corporate Centre,[20] certain entities established in Masdar City Free Zone[21] and Ajman Free Zones,[22] and a number of other approved free zones.

Where a freezone does not benefit from a cooperation framework with the DLD, a company incorporated in that freezone will generally not be permitted to hold Dubai real estate directly.

Non-designated areas. Outside designated areas, ownership restrictions are considerably narrower. UAE and GCC nationals, their wholly owned entities and PJSCs may own property interests throughout Dubai, including in non-designated areas.

Foreign individuals and legal entities, by contrast, cannot generally acquire ownership rights in such areas, whether directly or through a UAE mainland or freezone vehicle. That said, certain long-term use rights, including leasehold rights of up to 99 years, may in some circumstances be acquired by foreign investors over properties situated in non-designated areas.[23] The precise legal nature and enforceability of such rights will depend on the structure of the arrangement and the manner in which it is documented and registered.

Ownership in Abu Dhabi

General rule. The overall approach in Abu Dhabi is broadly similar to that adopted in Dubai, although the legislative framework differs in certain respects. As a general rule, ownership of real property is reserved to UAE nationals and companies of equivalent status, public joint stock companies majority owned by UAE nationals, and persons specifically authorized pursuant to resolutions issued by the Crown Prince or the Chairman of the Executive Council.[24] One important distinction from Dubai is that Abu Dhabi law limits ownership strictly to UAE nationals, to the exclusion of any other nationalities, including those of GCC countries.[25]

Investment areas. Abu Dhabi law nevertheless permits foreign individuals and foreign-owned entities to acquire ownership and accessory property rights within designated “investment areas”.[26] In practice, these rights may include ownership, usufruct and musataha interests, depending on the structure of the relevant development and the nature of the transaction.

Foreign companies. One practical distinction between Abu Dhabi and Dubai concerns the treatment of foreign corporate purchasers. Dubai’s DLD expressly indicated that foreign companies must use UAE mainland and certain freezone companies for property ownership. The relevant Abu Dhabi legislation states, in relatively broad terms, that non-UAE corporate entities may own real property in investment areas. Unlike Dubai practice, however, publicly available guidance issued by Abu Dhabi authorities is less detailed on the mechanics of registration where the purchaser is a foreign-incorporated entity with no UAE vehicle.[27] As a result, it is prudent for a foreign company to double check with ADREC the registrability of the proposed ownership structure before committing to it.

Non-designated areas. Similarly to Dubai, foreign individuals and legal entities cannot own real property rights in non-designated areas of Abu Dhabi, although they can acquire other long-term rights, such as leaseholds and usufruct rights.[28]

04 – LeaseholdLeasehold

As with ownership, the basic framework for leases is established by the Civil Transactions Law[29] and each emirate has its own detailed regulations.

Leasehold in Dubai

Regulations. In mainland Dubai, leases of commercial, residential and industrial properties[30] are governed by one set of regulations, enacted in Law No. 26 of 2007 Regulating the Landlord – Tenant Relationships in Dubai (as amended) (“Dubai Lease Law”). The DIFC Leasing Law No. 1 of 2020 has specific provisions for retail leases.

Lease period. Lease period must be defined in the agreement. If it is not defined, the lease shall be deemed to have effect for the rent-payment period, that is, the interval by reference to which the rent is stipulated (e.g. monthly, quarterly or annually).[31] If the lease period ends and the lessee retains possession of the property without objection from the lessor, the lease shall be automatically renewed for the lesser of: (i) one year; or (ii) the original lease period.[32] Short-term leases (less than one year) are generally allowed, but in certain cases may require a permit from the Dubai Department of Economy and Tourism.[33]

Rent. If the rent is not defined, it shall be equal to the market rent to be determined by the relevant authority.[34] The Civil Transactions Law permits non-cash rent.[35] Rent increases are generally regulated by the rental framework administered by the Real Estate Regulatory Agency (“RERA”) and must be aligned with the applicable RERA Rental Index.[36]

Termination. As a general rule, if neither party takes any steps to renew, the lease terminates upon expiry. If the tenant wishes to renew the lease for a further term (for example, one year) and has complied with its obligations, the landlord’s ability to refuse renewal is significantly restricted under the Dubai Lease Law.

First, the landlord must rely on one of the grounds for eviction upon expiry listed in the Dubai Lease Law.[37] In short, these include:

  • where the landlord wishes to demolish the property for reconstruction or to add new constructions that prevent the tenant from using the leased premises, provided that the landlord obtains the necessary permits from the competent authorities;
  • where the condition of the property requires comprehensive restoration or major maintenance and cannot reasonably be carried out in the presence of the tenant, as confirmed by a technical report issued or attested by the Dubai Municipality;
  • where the landlord wishes to recover the property for his personal use or the use of his first-degree relatives, provided that he does not own another suitable property for that purpose and does not re-let the property to a third party for at least two years from the date of eviction in the case of residential property (three years for non-residential property), unless the Rental Disputes Settlement Centre authorizes a shorter period; or
  • where the landlord wishes to sell the property.

Second, the landlord must serve a written eviction notice on the tenant at least twelve months in advance, through a public notary or registered post.[38] There is some uncertainty in practice as to when this notice may be served. Article 25(2) of the Dubai Lease Law refers to eviction “upon expiry” of the lease, which, taken literally, suggests that the landlord should wait until the lease term ends, then serve notice, and only thereafter can the twelve‑month period run. At the same time, there are reports that some judges of the Rental Disputes Settlement Centre (“RDSC”) accept notices served earlier (other than during the first year of a newly entered lease), provided the tenant still enjoys a full twelve‑month notice period before the intended eviction date.[39] On a conservative view, therefore, the effective termination period is twelve months plus whatever remains of the current lease term at the time the landlord makes its decision.

Example – eviction notice timing

The property is leased under an agreement dated 1 January 2026 for a one‑year term. On 1 June 2026, the owner decides that it wishes to occupy the property itself. On a conservative reading, the owner should allow the lease to run to its contractual expiry on 31 December 2026, then serve the eviction notice, specifying 31 December 2027 as the termination date. A less stringent approach, which may in some cases be accepted by the RDSC, is that the owner serves notice on 1 June 2026 specifying 1 June 2027 as the termination date, on the basis that the tenant still receives a full twelve‑month notice period.

The purpose of these strict conditions is to prevent arbitrary displacement of tenants and to ensure that eviction without breach occurs only in clearly defined circumstances and with adequate advance notice. By contrast, if the tenant commits one of the breaches specified in the Dubai Lease Law (for example, non‑payment of rent, unlawful use or substantial unauthorized alterations), the landlord may seek eviction during the term of the lease in accordance with the procedures and timelines set out in the law.

Long-term vs short-term lease. The lease period determines its legal character. Long-term leases have certain features of rights in rem, such as mortgageability. The key differences are outlined below.

Dubai · Long-term lease

Term 10–99 years[40]; registered in the Real Estate Register[41]; capable of being mortgaged as real estate[42]; registration fee linked to the total value of the contract (4%)[44]; disputes resolved by the Dubai courts.

Dubai · Short-term lease

Term under 10 years; registered in the Ejari system; no mortgage provision[43]; fixed registration fees, significantly smaller than for long-term leases; disputes resolved by the Rental Disputes Settlement Centre[45].

Leasehold in Abu Dhabi

Regulations. Leases in Abu Dhabi are principally governed by Abu Dhabi Law No. 20 of 2006 Concerning the Leasing of Spaces and Regulating the Leasing Relationship (as amended) (the “AD Lease Law”), together with the general provisions of the Civil Transactions Law. Compared to the Dubai Lease Law, the AD Lease Law has slightly narrower scope. For example, it does not regulate the lease of tourism and agricultural assets, or certain other properties, which are regulated by specific Abu Dhabi Executive Council resolutions.[46]

Lease period. If the lease term expires and the tenant remains in possession without the landlord’s objections, the lease shall be renewed for a similar term and on the same conditions.[47]

Rent. If the rent is not defined, it shall be determined on the basis of similar rentals.[48] As for indexation, the approaches adopted by Dubai and Abu Dhabi differ in important respects. As noted, in Dubai rent increases are linked to the relationship between the existing rent and the market rent reflected in the RERA Rental Index. A landlord’s ability to increase rent therefore depends on how far the contractual rent falls below the applicable benchmark for comparable properties. Abu Dhabi adopts a more straightforward model. Rather than relying on a market index, the law generally caps annual rent increases at 5% of the contractual rent,[49] irrespective of prevailing market rates, although the relevant authorities retain the power to amend or remove this cap (which has in fact been done recently).[50] As a result, Dubai’s regime is more closely tied to market conditions, whereas Abu Dhabi’s framework places greater emphasis on predictability and statutory limits.

Termination. If a party does not wish to renew the lease or wishes to renew it on amended terms, that party shall notify the other party two months before the expiry of the lease in the case of residential properties and three months in the case of commercial, industrial or professional services properties.[51] Similarly to Dubai, Abu Dhabi rules on early termination by the landlord are strict. For example, prior notice of termination by reason of the landlord’s need of the property for personal use must be given six months before the termination date rather than two months.[52]

Long-term vs short-term lease.

Abu Dhabi · Long-term lease

Term 25–99 years[53]; leases with a term of more than 4 years are registered in the Real Estate Register[54]; considered a “Property Right”[56] and capable of being mortgaged as real estate[57]; registration fee of 1% calculated on a one-year rent amount for residential properties[59], with no registration fee for commercial and industrial long-term leases[60]; disputes resolved by the Abu Dhabi courts.

Abu Dhabi · Short-term lease

Term under 25 years; registered in the Tawtheeq system[55]; no mortgage provision[58]; fixed registration fees, significantly smaller than for long-term leases[61]; disputes resolved by the Rent Dispute Settlement Committees[62].

The law is stated as at the date of publication. The information contained in this document is provided for general informational purposes only, does not constitute legal advice, and does not purport to be an exhaustive analysis of the issues addressed herein. Neither AKTA nor any of its employees accept any responsibility for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this document, and in no event shall they be liable for any losses resulting from reliance on or use of this information. For advice on specific circumstances, please contact AKTA.

Notes

  1. See for example, the 2023 stats on page 9 of the report available at: https://www.investuae.gov.ae/storage/post/PwRqf03MgwY0pMmGW7GkfzZ3fGflNoKWxkuPJ71R.pdf. ↩

  2. https://www.wam.ae/en/article/bzt8d2q-uae-real-estate-sector-posts-record-performance. ↩

  3. https://www.wam.ae/en/article/bzdr4dh-dubai-records-strong-performance-construction. ↩

  4. https://www.knightfrank.ae/site-assets/research/gated-reports/2025/destination-dubai-2025.pdf (page 6). ↩

  5. https://www.mediaoffice.abudhabi/en/infrastructure/abu-dhabi-real-estate-centre-records-44-percent-increase-reaching-aed142bn-in-transactions-in-2025/. ↩

  6. https://www.cbre.ae/press-releases/uae-real-estate-market-review-q1-2026. See also: https://gulfnews.com/business/property/uae-property-buyers-stay-in-the-market-despite-regional-tensions-1.500531056. ↩

  7. Book Three of the Civil Transactions Law No. 5 of 1985 and Book Three of the Civil Transactions Law No. 25 of 2025. ↩

  8. Article 1277 of the Civil Transactions Law No. 5 of 1985 and Article 1049(2) and 1169 of the Civil Transactions Law No. 25 of 2025. ↩

  9. Article 1353 of the Civil Transactions Law No. 5 of 1985 and Articles 1253–1261 of the Civil Transactions Law No. 25 of 2025. ↩

  10. Articles 1333–1352 of the Civil Transactions Law No. 5 of 1985 and Articles 1234–1252 of the Civil Transactions Law No. 25 of 2025. ↩

  11. Articles 1362–1398 of the Civil Transactions Law No. 5 of 1985 and Articles 1262–1295 of the Civil Transactions Law No. 25 of 2025. ↩

  12. Article 121 of the UAE Constitution. ↩

  13. Before 1 June 2026, it was the Federal Law No. 5 of 1985, and starting from 1 June 2026, it is the Federal Law No. 25 of 2025. ↩

  14. Compare Article 120 which provides that “[t]he UAE has exclusive legislative and executive jurisdiction” in the matters such as foreign affairs, defence, cash, education, etc. and Article 121 which stipulates that “the UAE has exclusive legislative jurisdiction” in the matters such as ownership of real properties, labour relations, banks, etc. (emphasis added). In other words, emirates have the “executive” jurisdiction with respect to ownership of real properties. See also: N. Abiad, ‘The Functional Federalism of the United Arab Emirates’ [2023] Perspectives on Federalism, Vol. 15, issue 1-2, 2023 84, 91. ↩

  15. DIFC Law No. 10 of 2018 (Real Property Law) and ADGM Real Property Regulations 2024. ↩

  16. Article 4 of Dubai Law No. 7 of 2006 Concerning Land Registration in the Emirate of Dubai. ↩

  17. https://dubailand.gov.ae/en/frequently-asked-questions/#/ (See the section: “Transaction Services” – “Can the land or property be registered in the name of a foreign company?”). See also: Clause 2.2.4.1.1 (Openness to Foreign Purchasers) of the Guidance for Licensed Financial Institutions Providing Services to the Real Estate and the Precious Metals and Stone Sectors issued by the Central Bank of the UAE (https://rulebook.centralbank.ae/en/rulebook/guidance-licensed-financial-institutions-providing-services-real-estate-and-precious). ↩

  18. https://gulfnews.com/business/property/difc-signs-mou-with-dubai-land-department-1.2022797#google_vignette. ↩

  19. https://www.adgm.com/media/announcements/dubai-land-department-signs-mou-with-adgm-registration-authority-to-bolster. ↩

  20. https://www.rakicc.com/wp-content/uploads/2021/04/PRESS-RELEASE-RAK-ICC-and-Ras-Al-Khaimah-Municipality-Department-Sign-MOU_EN.pdf. ↩

  21. https://dubailand.gov.ae/en/news-media/dubai-land-department-masdar-city-sign-memorandum-of-cooperation-to-enable-free-zone-companies-to-own-properties-in-dubai#/. ↩

  22. https://www.wam.ae/en/article/bizqj8m-dubai-land-department-ajman-free-zones-authority. ↩

  23. See for example: https://egsh.ae/insights/freehold-vs-leasehold-in-dubai. ↩

  24. Article 3 of Abu Dhabi Law No. 19 of 2005 Concerning Real Property (as amended). ↩

  25. See definition of “Nationals” in the Abu Dhabi Law No. 19 of 2005 Concerning Real Property (as amended). ↩

  26. Article 3 of Abu Dhabi Law No. 19 of 2005 Concerning Real Property (as amended). ↩

  27. There is no FAQ on the websites of ADREC or DARI which contains similar conclusion to what is reflected in DLD FAQ mentioned in footnote 17. ↩

  28. Clause 2.2.4.1.1 (Openness to Foreign Purchasers) of the Guidance for Licensed Financial Institutions Providing Services to the Real Estate and the Precious Metals and Stone Sectors issued by the Central Bank of the UAE (https://rulebook.centralbank.ae/en/rulebook/guidance-licensed-financial-institutions-providing-services-real-estate-and-precious). ↩

  29. Articles 742–796 of the Civil Transactions Law No. 5 of 1985 and Articles 685–739 of the Civil Transactions Law No. 25 of 2025. ↩

  30. Save for free accommodations provided by individuals or legal entities to their employees (see Article 3 of the Dubai Lease Law). ↩

  31. Article 5 of the Dubai Lease Law. See also: Article 756 of the Civil Transactions Law No. 5 of 1985 and Article 692(2) of the Civil Transactions Law No. 25 of 2025. ↩

  32. Article 6 of the Dubai Lease Law. ↩

  33. Decree No. 41 of 2013 Concerning the Regulation of the Holiday Homes Rental Market in the Emirate of Dubai. ↩

  34. Article 9 of the Dubai Lease Law. See also: Article 748(2) of the Civil Transactions Law No. 5 of 1985 and Article 696(3) of the Civil Transactions Law No. 25 of 2025. ↩

  35. Article 748(1) of the Civil Transactions Law No. 5 of 1985 and Article 696 of the Civil Transactions Law No. 25 of 2025. ↩

  36. Decree of the Rule of the Emirate of Dubai No. 43 of 2013 “Determining Rent Increase for Real Property in the Emirate of Dubai”. ↩

  37. Article 25(2) of Dubai Lease Law. ↩

  38. Last paragraph of Article 25(2) of Dubai Lease Law. ↩

  39. https://www.thenationalnews.com/business/money/homefront-i-ve-bought-a-dubai-property-what-notice-period-do-i-give-the-tenant-1.943512 ↩

  40. Article 1 of the DLD Administrative Resolution No. 134 of 2013 “Concerning the Registration of Lease Contracts”. ↩

  41. Article 2 of the DLD Administrative Resolution No. 134 of 2013 “Concerning the Registration of Lease Contracts”. ↩

  42. Article 22 of Mortgage Law No. 14 of 2008 of the Emirate of Dubai. ↩

  43. For example, Article 1406 of the Civil Code: “It shall not be permissible for there to be a security pledge save over real property which may be dealt in and sold by public auction or a right in rem over real property”. See however, articles 37 and 45 of the Commercial Code which list the “right to lease” as a business asset that may be pledged between merchants. ↩

  44. See for example: Schedule No. 1 to the Government of Dubai Executive Council Resolution No. 30 of 2013 Approving the Fees Concerning the Land Department. ↩

  45. Article 6(b)(3) of the Decree of the Rule of the Emirate of Dubai No. 26 of 2013 “Concerning the Rental Disputes Settlement Centre in the Emirate of Dubai”. ↩

  46. Article 2 of the AD Lease Law. ↩

  47. Paragraph 2 of Article 20 of the AD Lease Law. ↩

  48. Article 4 of the AD Lease Law. ↩

  49. Article 16 of the AD Lease Law. ↩

  50. https://www.khaleejtimes.com/business/property/abu-dhabi-tenants-relieved-rent-hike-freeze ↩

  51. Paragraph 3 of Article 20 of the AD Lease Law. ↩

  52. Article 23 of the AD Lease Law. ↩

  53. Definition of the “Long-Term Lease” in Law No. 3 of 2015 “Concerning the Regulation of Real Estate Sector in the Emirate of Abu Dhabi”. ↩

  54. Article 6 of the Law No. 3 “Regulating the Real Estate Register in the Emirate of Abu Dhabi”. ↩

  55. Article 20(6) of the AD Lease Law. ↩

  56. Definition of the “Property Right” in Law No. 3 of 2015 “Concerning the Regulation of Real Estate Sector in the Emirate of Abu Dhabi”. ↩

  57. Article 50 of the Law No. 3 of 2015 “Concerning the Regulation of Real Estate Sector in the Emirate of Abu Dhabi”. ↩

  58. For example, Article 1406 of the Civil Code: “It shall not be permissible for there to be a security pledge save over real property which may be dealt in and sold by public auction or a right in rem over real property”. See however, articles 37 and 45 of the Commercial Code which list the “right to lease” as a business asset that may be pledged between merchants. ↩

  59. Item 12 of Schedule 1 to Executive Resolution No. (49) of 2018 “On Municipal Services Fees in the Emirate of Abu Dhabi”. ↩

  60. https://help.dari.ae/en/support/solutions/articles/73000463109-lease-registration-fees. ↩

  61. Schedule 3 to Executive Resolution No. (49) of 2018 “On Municipal Services Fees in the Emirate of Abu Dhabi”. ↩

  62. Article 24 of the AD Lease Law. ↩

Arsen Khachikian
Arsen Khachikian
Partner & Director, AKTA