How to Rent a Company Office in the UAE

The United Arab Emirates is a country extremely popular with foreign entrepreneurs.

11:05 02 April 2024

The United Arab Emirates is a country extremely popular with foreign entrepreneurs. Large and small companies from different countries of the world establish presence in the UAE because there they find a beneficial geographical location, economic stability, elaborate legislation, low taxes, and many other advantages. If you would like to register a company and start doing business in the Emirates, you need a company office. Below we discuss the specifics of renting office space for your company in the UAE.

Commercial property in the UAE

The UAE is being actively developed: multiple large-scale development projects are launched in the country every year. They erect all kinds of buildings – residential and office buildings, warehouses and trade centers, etc. Real property in the Emirates is characterized by exceptionally high quality, comfortable floorplans, and the use of the latest technologies in construction. If you wish, you can not only rent but buy office space in Dubai or some other emirate. In any case, however, you have to follow the regulations and learn about the specifics of the local real property market in the area that you are considering.

Please note that the type of company that you register in the UAE will affect your choice of office buildings. An offshore company is not entitled to rent an office in the mainland UAE.

Office space for FEZ-registered companies in the UAE

A company registered in one of the Free Economic Zones (FEZs) in the UAE is entitled to rent office and warehouse space. The general rule is that the property should be located on the territory of the FEZ where the company is registered. However, there are exceptions from this rule.

In some FEZs, you can rent a shared office (used by more than one firm) or even a virtual office but this opportunity is sometimes unavailable in other FEZs. Another option is renting a desk in a co-working area. This opportunity is worth considering if you are not going to use your company office very often. At the same time, your company will have a registered address, which is required in the UAE. We cannot say that renting a desk will cost you nothing: you will have to pay at least US$ 1,300 per year for it.

Office space for mainland companies

Companies registered in the mainland UAE (local companies) shall have brick-and-mortar offices – shared and virtual offices are prohibited. Besides, the address of the company office has to be the address where the company can be found at any time. The local business authorities carry out inspections regularly and if a company cannot be found at the address where it is registered, it will face a large fine.

Office rental in the UAE

Office rental in the Emirates is possible if you have a business license or company registration documents (if the company is undergoing the registration procedure).

Important aspects to bear in mind:

• The premises have to be suitable for the type of business activities indicated in the license. After some amendments to the legislation were made in 2021, more than a thousand types of business activities have been available to foreigners in the UAE.
• Several companies can rent a shared office only if they are owned by the same people;
• Office space can be rented in office buildings exclusively: putting offices in residential buildings is strictly prohibited in the UAE;
• The office area has to correspond to the number of people working in the office; 9 m2 per person. The office area affects the number of resident visas that the company officers can be eligible for.

Office types in the UAE

You have two options when renting an office in the UAE:

• Fitted office – an office ready for use. If can be furnished or unfurnished;
• Shell&core – an unfinished office that requires repairs. The price is lower but you could hardly save money by renting a shell&core office because the repairs are going to cost you a pretty penny.

The number of resident visas that you can apply for depends on the office area:

• Physical space – one visa per every 9 m2;
• Flexi desk – a virtual office entitles you for three visas;
• Serviced office – a fully functional office rented from a service company entitles you for 4 to 5 visas depending on the area.

Types of lease agreements in the UAE

You can make lease agreements of four types in the country:

• Modified-net lease – the owner and the renter agree how they are going to share the office maintenance costs. It is considered the smartest option;
• Triple Net lease – all costs have to be covered by the renter. Highly unpopular lease agreement type as far as renters are concerned;
• Land lease – you can rent a land plot and build a commercial building there. Afterwards you will have to negotiate the terms of the building use with the land owner;
• Gross lease – you pay a fixed price every month (quarter, year) and the building owner covers all the maintenance costs. The most widespread option.

EJARI system

The Real Estate Regulation Agency of the UAE launched the system in 2010. All the lease agreements have to be registered in an electronic form in the Emirates. This makes the agreements totally transparent as the system is publicly accessible. This allows avoiding machinations and resolving disputes that may arise in court. As a rule, the property owner registers the agreement with the EJARI system and the renter covers the registration cost. 

After the agreement has been registered with the system, you have to sign agreements with water and electricity suppliers. In addition, you have to insure the office against physical damage. When you are done with that, you can start using your office in the UAE for business purposes.

Lease payments in the UAE

In most cases, renters make out checks when paying for offices. The frequency of payments is specified in the rent agreement. Usually, rent is paid quarterly in the UAE but it can also be paid monthly or yearly in some cases.

The lease agreement also specifies how the additional costs (utilities, technical services, Internet, air conditioner, and garbage collection) are going to be covered. The renter also has to leave a security deposit of 5% of the yearly rent. If everything is alright, the deposit will be returned to the renter.

The rent term starts at 12 months. Please be prepared for a price rise of about 5% after the first two or three years of renting an office in the UAE.

A belated payment may have serious consequences for the renter. If your rent is more than one month late, the property owner can take you to court. In 2022, Dubai Land Department signed an agreement with the largest bank in the UAE Emirates NBD Bank that allows debiting rent payments from the renter’s bank account.

Real estate agencies are quite plentiful in the UAE and you would benefit from professional assistance in finding a nice office for rent in Dubai or another Arab Emirate.