Dubai, March 8, 2010 (Gulf News) - Dubai's Land Department will soon announce a new regulatory framework for offshore companies investing in Dubai's freehold market. The move is aimed at improving transparency.
The Land Department has halted, for a month, transactions of offshore companies due to lack of clarity.
"There are currently guidelines that exist which offshore companies have to adhere to. A new set of regulations is currently awaiting approval and is due to be introduced by the end of the week. Most of the new regulations will be to monitor who the owner of the companies are, so whenever they want to sell they are able to inform the Land Department," Mohammad Sultan Thani, director-general of the Dubai Land Department, told Gulf News yesterday.
An offshore company is a business that is incorporated outside the jurisdiction of its primary operations. The Jebel Ali Free Zone Authority in Dubai and Ras Al Khaimah Free Zone offer offshore licences in the UAE.
From the beginning of this month, offshore companies will be able to register with the Dubai Land Department but not as developers, according to Thani.
"They can't be developers for now, until they have the mechanism to work as a developer locally instead of offshore. The reason being, if there is a court case against an offshore developer that is not physically available here and does not follow the local laws, then it is a lot harder to carry out a judgement against them," Thani told Gulf News.
Industry experts see these new regulations as a welcome move.
"Relationships between corporate entities and regulators need to be established. There needs to be an understanding of their obligations, issues and opportunities to clarify and strengthen their requirements for their companies to operate in Dubai and the UAE. It is very important in these turbulent times that there is clarity and understanding in respect to the way they do business. Anything that the regulator can do to enhance this clarity will be well received," Blair Hagkull, managing director at Jones Lang Lasalle, told Gulf News.
Throughout February, the registration of titles for freehold properties in the name of foreign offshore companies was suspended while the Land Department updated its system.
The directive, effective February 1, instructed the transaction department not to register titles in the name of foreign offshore companies. It did not affect the ownership of properties registered in the name of foreign offshore firms that were registered before February 1.
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