Publication
Renting an office in the UAE – features, restrictions, how to pay?
Many companies decide to rent an office in the UAE. This may be required by the business itself (warehouse, production, staff accommodation), for others it is a way to meet licensing requirements or improve their reputation. The variety of such reasons can only be compared with the number of features that office rental in the UAE has.
Do you want to know how office rental in the UAE differs depending on the type of company, what rules and features of rent exist in the Emirates? Let's start with the main thing.
There are two big differences - an office for a freezone company (freezone) and an office for a mainland company (local company)
Office for a freezone company (freezone)
Where can you rent an office? Depending on the type of license, freezone companies (freezone) can rent either a virtual office or a standard classic (physical) office. But there is one general rule - freezone companies (freezone) must rent an office or some coworking space only on the territory of their freezone (where they have a license).
For example, if your company is registered and operates under a DMCC license, then you can rent an office in the DMCC. If your company operates in the Dubai Silicon Oasis zone, then you can rent an office for it only in this zone. This applies to most of the free zone zones represented in the UAE.
Payment. The issue of payment for a local office of a free zone company in the UAE deserves special attention. There are two key features that are specific to the UAE:
1) Most free zones in the UAE require payment of rent for the entire period - for the entire year or six months (2 times a year).
2) Payment for office rent in the UAE free zones must be made from the company's corporate account, or through a check system (a check issued by the company). This means that the company must already have an account in order to rent an office.
The procedure for signing a lease agreement. It is very important that the lease agreement is signed with the registrar, that is, the Free Zone management company, and this usually happens in electronic form (certified within the Free Zone).
Office for a mainland company (local company)
Where can I rent an office? Local mainland companies in the UAE have the opportunity to rent offices anywhere in the local territory of the Emirates. This gives local local companies more room to maneuver, because they can rent offices in any business centers and in any commercial buildings.
Payment. In the vast majority of cases, mainland (local) companies in the UAE pay for rent using checks, not bank transfers. But this limitation is compensated by the presence of a mechanism for making payments through third parties (a check can be issued by an authorized person).
The procedure for signing a lease agreement. The lease agreement is concluded in writing, after which it is registered in the register. Accordingly, a mandatory requirement for a mainland company (local company) is to enter the concluded agreement in Ejari. It is from the moment of its registration that it is considered valid.
Tips for renting offices in the UAE
What should you pay attention to and what should you check if you decide to rent an office in the UAE?
1) Check the requirements of your license in the UAE. This is especially important for free zone companies. Before entering into a lease agreement, check whether your license corresponds to the selected premises.
2) Register the lease agreement. This is equally important for any type of company in the UAE. If you have a mainland company (local company), then the registration of the lease agreement must be carried out through Ejari. If a freezone company, then through the freezone management company)
3) Title Deed. Make sure that the landlord gives you a Title Deed - if he is the owner, or another document confirming the possibility of renting out this premises.
4) Read the contract carefully. Check what legal terms it contains: payment rules, terms of use, etc.
If you are planning to rent an office in the UAE - Contact Antwort Law! We are ready to help you at every stage.
Diana Gulevskaya
Partner
Antwort Law
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Organization of office, payments and work with staff of IT companies
FAQ
What is the difference between office rental for freezone and mainland companies in the UAE?
Freezone companies can only rent an office within their freezone where they have a license. For example, if a company is registered in DMCC, an office can only be rented in that zone. However, there are exceptions, such as in Meydan (MFZ), where it is possible to obtain permission to rent outside the zone. At the same time, mainland companies have the right to rent an office in any part of the UAE without any territorial restrictions.
What are the key features of paying for office rent in the UAE?
For free zone companies, rent is usually paid for the entire year or half year and must be paid from the company's corporate account or by cheque issued in its name. For mainland companies, the cheque system is also preferred, but payment through a proxy is permitted.