Gifting Real Estate Property from Company to Individual (or Vice Versa) in Dubai

Dubai, known for its opulence and remarkable real estate market, has long been an attractive destination for property investments. It’s no wonder that individuals and businesses from all over the world are drawn to this dynamic emirate. As a result, property transactions in “the city of gold” are quite common. Among the various property-related transactions, gifting property in Dubai from a company to an individual or vice versa from an individual to his/her company is a common endeavor.

Dubai property gifting from a company is a process by which a corporate entity transfers ownership of real estate to the individual owner(s) of such entity or first-degree relatives of the owner(s). On the other hand, gifting property from an individual to a company is a process by which an individual transfers ownership of real estate to his/her company. Gifting property in Dubai between an individual to a company or vice versa is done for various reasons, such as estate planning or asset protection. However, it’s essential to comprehend the legal and procedural aspects involved in this process.

This can be a complex process, and in this blog, we will explore the various aspects of gifting property from a company to an individual or from an individual to a company, including reasons for doing so, the legal framework, and steps to ensure a smooth process.

Reasons for Gifting Property

People may consider gifting property from a company to an individual for various reasons including:

1. Asset Protection: Gifting property from an individual to a holding company can help protect assets by shielding them from potential creditors. This is often seen in the case of high-net-worth individuals who want to protect their personal assets from potential business-related risks.
2. Estate Planning: Property gifting in Dubai can also be part of comprehensive estate planning. Property gifting can help assets bypass the probate process, ensuring a quicker distribution to beneficiaries. Depending on the individual needs of each person, in some instances, it may be prudent to hold real estate under a legal entity’s name (e.g., foundations).
3. Succession Planning: To reduce the potential for family disputes, gifting property from a company to first-degree family members of the company’s owner can facilitate a seamless transition of property to future heirs.

Legal Framework

Dubai has a well-established legal framework for property transactions. To gift property from a company to an individual or from an individual to a company, it’s essential to understand the legal requirements and restrictions, including the Dubai Land Department (DLD) regulations and other applicable laws. Consulting with a legal expert or a reputable real estate advisor is highly recommended to ensure you are compliant with all the legal formalities.

1. Documentation: Ensure that the property you intend to gift to yourself, or your first-degree relatives is legally under the name of the company that you own 100%. On the other hand, if you wish to transfer your property as a gift to a company, then such company must be owned fully by you. Owners can download their title deeds through the Dubai REST app. No objection certificate (NOC) from the Developer and/or Mortgagee (if mortgaged) and Valuation Certificate are also part of the documents that you need to secure.
2. Corporate Structure: Further to the above, for you to be able to do a gift transfer from a company to yourself, the property must be wholly owned by the company wherein you’re the sole shareholder/owner (i.e. an entity owned by the same individual). You will also need Valid commercial documents issued by the issuing authority (mainland or free zone) to establish the corporate entity’s legitimacy and ownership: such as trade license, memorandum & articles of association (MOA), share certificate and/or certificate of incumbency and certificate of incorporation. Moreover, legal entities registered in certain jurisdictions in the UAE can not own property under Dubai laws, thus before selecting a company structure, it is worth checking whether such a company will be allowed to own a property in Dubai.
3. Legal Beneficiary: Gifting from company to individual or vice versa is limited to happen between the company and its sole shareholder/owner only. Additionally, property gifting from a company can be done to first-degree relatives of the shareholder of the company. As per Dubai laws, for property gifting, first-degree relatives include spouses, parents, and children only. Siblings, aunts/uncles, grandparents/grandkids, or any other second-degree relationship is not allowed for a property gift transfer.

Steps for Gifting Real Estate Property from Company to Individual

To ensure a smooth & successful property transfer, consider the following steps:

1. Consult Legal and Corporate Professionals: Seek advice from real estate conveyancers or lawyers who can guide you through the process.
2. Comply with Local Laws: Ensure that you follow all local laws and regulations related to property transfers.
3. Due Diligence: Ensure that the property is free from any encumbrances or legal disputes. Additionally, it’s essential to have the property accurately valued. The DLD or a certified property valuator can guide this matter. The property’s value will impact the DLD’s transfer fees (0.125%), so accuracy is crucial.

Conclusion

Gifting property in Dubai from a company to an individual or from an individual to a company in Dubai is a multi-faceted practice with various motivations. Whether it’s for asset protection, estate planning, succession, or financial legacy, it has far-reaching beneficial merits. It’s important to approach this transaction with careful consideration and professional guidance.

Contact our team at POA.ae today to start your property gifting process in the UAE.

Disclaimer: The content on this page is for general information purposes only and does not constitute legal advice nor should it be used as a basis for any specific action or decision. Nothing on this page is to be considered as creating a lawyer-client relationship or as rendering legal advice or legal services for any specific matter. Users of this website are advised to seek specific legal advice from their lawyer or legal counsel regarding any specific legal issues.