Ajman offers a compelling opportunity for investors seeking to purchase commercial real estate. With attractive yields, affordable property prices, and streamlined regulations, the buying process is accessible and rewarding. Here’s what you need to know:
Step-by-Step Guide to Buying Commercial Property in Ajman
- Initial Visit and Agreement
- Investors typically start by visiting the property and negotiating terms with the seller. Once both parties agree, a Sales and Purchase Agreement (SPA) is signed.
- Property Transfer Process
- The buyer and seller complete the property transfer at the Ajman Real Estate Regulatory Agency (ARRA) or the Ajman Land Department.
- Required documents include:
- Copies of passports
- Original Title Deed
- Signed SPA
- The buyer pays transfer fees to finalize the ownership transfer.
- Payment Terms
- Depending on the agreement, payments are usually made directly to the seller or through an escrow account. Unlike other countries, UAE property transactions do not typically involve notaries unless specific legal circumstances arise.
- Ownership for Companies
- If the property is purchased under a company name, the Title Deed is issued to the company.
- Ensure the company complies with UAE property ownership laws. Free zone companies often qualify, but mainland companies may require additional permissions.
- Banking for Transactions
- Opening a UAE bank account is not mandatory, as international transfers or certified checks are accepted. However, having a UAE account simplifies rent collection and local transactions.
Rental Income and Banking
- Rental Income Deposits:
- Rental payments can be deposited into:
- A UAE bank account in the property owner’s name, or
- A foreign account, such as in the Netherlands, is based on the lease agreement.
- For practical management, a UAE account is recommended.
- Bank Account Requirements:
- A residency visa is often required to open a UAE personal bank account.
- Non-resident accounts are available but come with higher minimum balances and limited services.
Advantages of Buying Commercial Real Estate in Ajman
- High Rental Yields:
- Investors can expect 7% to 9% yields, significantly higher than in many other global markets.
- Affordable Prices:
- Ajman offers competitive pricing per square foot compared to nearby Emirates and other international cities.
- Regulatory Changes:
- Recent amendments by the Ajman government now allow foreign investors to own property, increasing accessibility.
- Financing Options:
- Banks such as Emirates NBD, HSBC, and Mashreq offer mortgages to ex-pats and foreign nationals with competitive rates and high loan-to-value (LTV) ratios.
Key Ownership Models in Ajman
- Musataha Agreements:
- These are long-term investment partnerships, typically for 50 years (renewable). Owners can construct, alter, or demolish buildings on the land.
- Long-Term Lease or Commonhold:
- Initially granted for up to 25 years, with options for extension. Ideal for businesses seeking operational flexibility.
Investor Visas and Benefits
- Properties valued over AED 750,000 may qualify owners for a property investor visa, which simplifies bank account setup and provides residency benefits.
This streamlined focus on the buying process and investment potential will help guide your real estate journey in Ajman.
Questions from our clients about buying commercial real estate in Ajman
I come to Ajman, visit the property, sign the papers, and then what happens?
- After signing the Sales and Purchase Agreement (SPA), the buyer and seller usually proceed to complete the property transfer process at the Ajman Real Estate Regulatory Agency (ARRA) or the Ajman Land Department.
- To finalize the property transfer, both parties will submit the required documents (passport copies, Title Deed, and SPA) and pay the transfer fees.
Do I make a transfer to the notary?
- No, the payment is typically made directly to the seller or via an escrow account, depending on the arrangement. Notaries are not commonly involved in UAE property transactions unless a special legal requirement exists.
Is the property in the name of my company holding?
- Yes, if you are purchasing the property under a company’s name, the Title Deed will be issued in your company’s name.
- Ensure the company has the proper legal framework to own property in the UAE (some free zones allow this, but mainland companies may require specific permissions).
Must I open a UAE bank account to pay the notary?
- Opening a UAE bank account to pay for property transactions is not mandatory. Depending on the agreed terms, payment can be made via international transfer or certified checks.
- However, having a UAE bank account simplifies local transactions, including rental income management.
Where does the money from rental income go?
- Rental income can be deposited into:
- A UAE bank account in the property owner’s name or
- A foreign account (e.g., in the Netherlands), depending on the lease agreement and the method set up for receiving payments.
- Using a UAE bank account is often more practical for local management.
Must I apply for a visa to open a bank account?
- Most banks require a valid UAE residency visa to open a personal bank account in the UAE. However:
- Non-resident bank accounts are possible with limited functionality (higher minimum balance requirements and no chequebooks).
- Company accounts are easier to open if a company owns the property.
How do I get a property investor VISA?
- Ownership visas: If the property value exceeds AED 750,000, the owner may apply for a property investor visa, simplifying opening a bank account and staying in the UAE.
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