Topic Summary
One Law Now Governs All Dubai Real Estate Funds
Before this legislation, fund structures were fragmented across mainland and free zone rules with no single regulator in charge. The new law creates a unified licensing track under the SCA and Dubai Land Department, replacing the complex offshore workarounds many investors previously relied on.
Three Fund Types Cover Every Investment Strategy
Investors can choose between open-ended funds for liquid rental income plays, closed-ended funds for long-hold development assets, and listed REITs for regular dividend income. Each structure carries its own capital requirements, redemption terms, and reporting obligations.
REITs Must Pay Out 80% of Net Income
Any fund structured as a REIT must distribute at least 80% of its net income as dividends and hold at least 75% of assets in income-producing property. This makes REITs the most income-focused option under the new framework.
Qualifying Funds Pay Zero Corporate Tax
While the UAE applies a 9% corporate tax on income above AED 375,000, real estate funds that meet the qualifying criteria pay 0% under Federal Tax Authority rules. Combined with the stable AED/USD peg at 3.67, this significantly improves net returns for foreign investors.
Expect 8 to 16 Weeks From Application to Launch
The setup process involves five main steps: selecting a fund structure, obtaining an SCA fund manager license, registering assets with the Dubai Land Department, preparing an approved offering document, and opening a dedicated fund bank account. Planning for the full 16-week window helps avoid delays in capital deployment.
Public Funds Face Stricter Rules Than Private Ones
Funds open to retail investors must meet higher capital thresholds and receive SCA approval for their prospectus before any marketing begins. Private placement funds are restricted to qualified investors defined by net worth or professional status, giving managers a lighter compliance path for institutional raises.
In 2026, Dubai's real estate market is on track to draw over AED 400 billion in annual transactions (Dubai Land Department, 2025). The Dubai New Real Estate Funds Law is the single biggest rule change shaping how that money moves. The AED/USD peg has held at 3.67 since 1997, removing currency risk for American investors. The UAE corporate tax rate is 9% on income above AED 375,000, but funds that qualify pay 0% (Federal Tax Authority, 2024). REITs must pay out at least 80% of net income as dividends. The setup process typically takes 8 to 16 weeks from first application to launch.
This guide breaks down what the Dubai New Real Estate Funds Law means for investors: what changed, who it covers, how to set up a fund, and what you must do to stay on the right side of the rules.
What Is the Dubai New Real Estate Funds Law and Why It Matters
The Dubai New Real Estate Funds Law is a legal framework governing how property investment funds are formed, licensed, and run in Dubai. It sets rules for fund managers, asset types, investor rights, and reporting. The law aims to bring more foreign capital into Dubai real estate through a clear, regulated structure.
Before this law, fund structures for Dubai real estate were spread across mainland and free zone rules with no single regulator in charge. Foreign investors faced unclear ownership rights. Small and mid-size funds had no clear legal form to use, so many set up offshore and routed deals through complex chains. The law was issued by UAE Cabinet decree and published in the Official Gazette (UAE Cabinet, 2024). It closes the gap that pushed capital offshore and gives investors a clean, Dubai-based path instead.
The law does 4 things at once:
Creates a single licensing track for real estate funds based in Dubai
Defines the legal forms a fund can take: closed-ended, open-ended, and REITs
Sets out the Dubai Land Department as the registration body for fund assets
Gives the Securities and Commodities Authority (SCA) oversight of fund managers and public offerings
A fund manager can now register a closed-ended fund in Dubai, list assets with the Dubai Land Department, and offer units to qualified investors under one set of rules.
How the Law Changes Fund Structure
The law introduces 3 fund types: open-ended funds for liquid strategies, closed-ended funds for long-hold assets, and REITs for listed property income. Each type has its own capital rules, redemption terms, and reporting duties. Fund managers must hold a license from the SCA before they can operate.
Open-ended funds: investors buy and sell units at set intervals; best for assets with steady rental income
Closed-ended funds: capital is locked for a fixed term; used for development or value-add plays that need time to mature
REITs: listed on a UAE exchange; must pay out at least 80% of net income as dividends and hold at least 75% of assets in income-producing property
A developer building a logistics park near Al Maktoum International Airport would typically use a closed-ended structure, locking investor capital for 5 to 7 years until the asset stabilises.
The law sets minimum fund sizes to keep out under-capitalised vehicles. Public funds open to retail investors face higher capital and disclosure rules than private funds. Private placement funds are open only to qualified investors, defined by net worth or professional status under SCA rules. The public fund prospectus must be approved by the SCA before any marketing begins (Securities and Commodities Authority, 2024).
5 Key Steps to Set Up a Fund
Setting up a real estate fund in Dubai under the new law takes 5 main steps: choose a fund type, get a fund manager license from the SCA, register the fund with the Dubai Land Department, prepare an offering document, and open a dedicated fund bank account. The process typically takes 8 to 16 weeks.
Step 1 — Choose your structure and manager. Decide between open-ended, closed-ended, or REIT based on your asset plan and investor base. The fund manager can be an existing licensed firm or a new entity. The manager must hold an SCA license covering collective investment scheme management, which is separate from a trade license.
Step 2 — Register assets and get approvals. All real estate assets held by the fund must be registered with the Dubai Land Department. A valuation by an approved independent valuer is needed before registration. For public funds, the SCA must approve the prospectus before any marketing. A fund custodian must be appointed to hold assets. For more detail, see our guide on RERA approval for a Dubai real estate licence.
Step 3 — Open a fund bank account and launch. A dedicated fund account, separate from the manager's own accounts, is required by law. Subscription money must go into this account before the fund formally closes. Quarterly reporting to the SCA starts from the first quarter after launch.
Who Can Set Up a Fund
Any legal entity licensed to manage collective investment schemes in the UAE can set up a real estate fund under the new law. 4 types of entity can act as fund manager:
UAE mainland companies licensed by the SCA for fund management
Free zone companies with an SCA co-regulation agreement, such as those in the Dubai International Financial Centre
Foreign fund managers who appoint a UAE-licensed manager as the local responsible entity
Family offices structured as UAE legal entities, if they hold the SCA license
Foreign investors can hold 100% of units in Dubai real estate funds with no restriction. The fund itself holds the property title, so the foreign ownership rules that apply to direct property purchases do not apply in the same way. Profit and capital can leave the UAE with no withholding tax on dividends. The new law also puts 3 hard protections in place: a licensed custodian must hold all fund assets; an independent valuer must assess assets before registration and at wind-up; and annual audited accounts must be filed with the SCA and shared with investors.
Tax and Compliance Rules
The UAE introduced a 9% corporate tax rate from June 2023. Real estate funds are not automatically exempt. A fund can apply for Qualifying Investment Fund status from the Federal Tax Authority; if it qualifies, the fund pays 0% corporate tax on its income. To qualify, the fund must meet conditions on ownership spread, regulatory oversight, and how it distributes income.
Ongoing compliance duties include:
Annual audited accounts to the SCA within 4 months of the financial year end
Quarterly net asset value reports to the SCA and investors
AML/KYC checks on every investor before subscription is accepted
Notice to the Dubai Land Department of any change in fund assets within 30 days
Wind-up notice to the SCA within 5 business days of any wind-up decision
What the Law Means for US Investors
For US investors, the Dubai New Real Estate Funds Law creates a clear, regulated path into Dubai property without buying assets directly. You can invest through a licensed fund, hold units as a foreign national, receive dividends free of UAE withholding tax, and exit by selling your units on the secondary market or at fund wind-up.
Dubai has no property capital gains tax. The dirham has been pegged to the US dollar at 3.67 since 1997, removing currency risk entirely for American investors. The new fund law gives US investors a regulated structure they recognise, similar in form to a US-style REIT or private placement fund.
US investors must check their own FATCA reporting duties. Owning units in a foreign fund triggers IRS disclosure in most cases. The FATCA threshold for US individuals abroad is USD 200,000 at year end or USD 300,000 at any point during the year. Key due diligence steps:
Check the fund manager's SCA license number on the SCA public register before committing capital
Liquidity risk is real in closed-ended structures: you cannot exit early without a secondary market
Review the independent valuer's report and confirm the custodian is a UAE-licensed bank
Get US tax advice on FATCA and FBAR duties before you subscribe
What happens if a fund winds up?
The law sets a clear order for paying out investors when a fund closes. Secured creditors are paid first. Unit holders are paid in proportion to their holdings after costs. All assets must be valued by an approved independent valuer before sale. The SCA must be told of any wind-up decision within 5 business days.
How do I check a fund manager is licensed?
Go to the SCA public register at sca.gov.ae and search by company name or license number. Confirm the license covers collective investment scheme management and is not suspended. If the manager is in the DIFC, check the DFSA public register instead.
Can a foreign company manage a Dubai real estate fund without a UAE office?
Not directly. A foreign manager must appoint a UAE-licensed co-manager as the local responsible entity.
References
Federal Tax Authority (tax.gov.ae)
UAE Cabinet (uaecabinet.ae)
Securities and Commodities Authority (sca.gov.ae)
Frequently Asked Questions
