How to Start a Real Estate Brokerage Company in Dubai

(MENAFN – Khaleej Times)

With world-class infrastructure, technological developments, business investment and business opportunities, Dubai is a hotbed for foreign investment. Breathtaking skylines, excellent infrastructure, renowned architecture and great shopping malls make Dubai an ideal destination for real estate investors.

Due to the factors stated above, Dubai is becoming one of the world’s leading real estate market, generating a higher return on investment (ROI) than other major cities in the world.

According to the August 2022 report, the real estate market recorded an average of MAD 1.4 billion in sales transactions in a single day.

The recent introduction of the golden visa program for property investors and buyers who invest or purchase property worth AED 2 million has increased the popularity of Dubai properties. The 10-year residency permit boosts real estate investment, making Dubai an ideal location for buyers compared to any other metropolitan city.

The real estate sector in the UAE has changed drastically and focused on the long-term investment option, a sign of Dubai’s unprecedented rate of growth.

Establish your real estate brokerage business with 100% ownership

In accordance with the law reform in the United Arab Emirates, expatriates or foreigners can set up a freehold real estate brokerage company.

These regulations came into effect in 2021, removing real estate brokerage from the “restricted category” and allowing more foreign brokerage firms to start real estate business in Dubai with 100% ownership.

In addition, the government has made the overall process more seamless. New businesses can apply for a license from the Department of Economy and Tourism (DET) and obtain an approval from the Real Estate Regulatory Agency (RERA) through the Trakheesi system.

Trakheesi, managed by the Dubai Land Department (DLD), was developed to streamline the real estate industry and its services, such as licenses, e-maps and approvals. It is integrated with DET to collect centralized data. Recently, the government has made it mandatory for brokerages to register and obtain unique Trakheesi numbers.

Local sponsor role

A local sponsor acts as a service agent to register professional business activities in Dubai Economy and Tourism (DET).

They facilitate the documentation of the company with government authorities and municipalities, but do not intervene in the operation or management of the company. Moreover, the local sponsor does not hold any stake in the company.

Anti-money laundering and CTF regulations

The UAE has taken measures to prevent money laundering in real estate transactions. The government is strictly forcing regulators to make the sector more controlled and monitored.

The underlying anti-money laundering law in the UAE is Decree Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations.

Under AML regulations, real estate brokers must identify suspicious transactions and comply with the following requirements in the UAE:

> Understand the source of transferred funds

> Implement necessary Customer Due Diligence (CDD) based on screening, profiling and previous employment status.

> Manage necessary measures such as internal governance, policies and oversight to ensure ML risk mitigation.

Real estate brokerage firms must register with the Financial Intelligent Unit-goAML service portal. It is an anti-money laundering reporting platform launched by the Central Bank of the United Arab Emirates to restrict money laundering (ML), financing of terrorism (FT) and other illegal activities.

Real estate brokerage activities

Within the framework of real estate brokerage, there are two types of commercial activities:

> Purchase and sale

> Rental

Most brokerages can have both activities under one license. However, companies may be involved in related real estate activities with additional approval from authorities.

Set up a real estate business

1. Registration

After deciding on the business name, you must submit the required business documents to complete the registration process through the online portal. In the meantime, you will need to obtain certification from the Real Estate Regulatory Agency (RERA).

2. RERA Certificate

To become a real estate agent, you must follow the Approved Training for Real Estate Brokers issued by the RERA.

You receive certification by attending a four-day training session and passing the following exam. The real estate agent employed by the company must hold the real estate agent card issued by the RERA.

3. TED License

You must submit the RERA approval, rental agreement, passport copies and business name certificate to receive the final real estate license from the authorities. Once you have provided all the required documents, the Department of Economy and Tourism (DET) will issue you a payment voucher. After payment, the DET will issue the license.

4. RERA Registration

You can now register your real estate company with the RERA with the following documents:

RERA application form

Copy of DET business license

· Received

RERA course certificate

Rent control/Ejari copy of office

The governing authority will then grant you a business license to conduct operations.

To hire and sponsor employees, like any other mainland business, the business must register with the Ministry of Labor (MOL) and the Directorate of Residency and Foreigners (DNRD).

5. Office space

According to Department of Economy and Tourism rules, you must have rented office space in a business center or fully independent office anywhere in Dubai to obtain a real estate brokerage license.

Even if you are starting your own real estate business, you can outsource some of your operations, such as your accounting services, to cut costs and build your business efficiently. The cost of obtaining a real estate brokerage license depends on factors such as your business activities, the size of your business and its location. On top of that, you pay for the certification.

Conclusion

The real estate market generates about 5.5% of the global gross domestic product (GDP) annually, making it one of the most lucrative business start-up options. It is an excellent investment for those who want to make a profit in this sector.

Pratik Rawal is the Managing Partner of Ascent Partners, which offers bespoke business formation and advisory services to entrepreneurs looking to set up their next business in Dubai. The opinions expressed are his own and do not reflect the policy of the newspaper.

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