While being nestled in the Persian Gulf is a source of pride for Dubai, the delightful blend of soft-sand beaches and a thriving metropolis is no less. The record-breaking structures and popular tourist attractions can make you live here forever. If the same thought has brought you to Dubai, start your journey with the intent of an investment. 

Doing so, your path will collide with the terms “freehold” and “free zone”. Since both terms are interrelated, getting confused between the two is common. Across the Emirates, the lucrative property market has surpassed our expectations, and investors are trying to relish the benefits. Yet, many are caught off guard between free zone vs freehold property. 

They cannot understand their legal differences, and if you belong to the same troop, we’ve got you! Here’s a breakdown to help you decide whether you should invest in free zone property or the freehold.

Free zone vs Freehold Property: What’s better?

It doesn’t matter if you’re an entrepreneur or an investor aspiring to become a part of Dubai’s real estate market. Familiarising yourself with the initials of free zone vs freehold property is important.

Free zone in Dubai 

Free zone areas, also known as trade zones, tend to exempt businesses from taxation. Since the area is exclusively dedicated to business persons, there are no residences. That’s why millions of entrepreneurs approach free zone areas in Dubai to set up their franchises and headquarters. After all, who wouldn’t get enticed by the idea of tax-free commercial activities? 

On the other hand, it’s great for business people wanting to utilise the oil potential of the UAE for the manufacturing process. The tax exemption blew life to a good business atmosphere, attracting potential foreign prospects. 

However, it doesn’t give you the liberty to practice immoral activities. As an entrepreneur, you must abide by the laws and regulations placed by free zone authorities. Only this way can you enjoy 100% ownership of the business.

Free zone Areas in Dubai

Here’s a breakdown of all the free zone areas in Dubai

  • Dubai Multi Commodities Centre (DMCC)
  • Jebel Ali Free Zone (JAFZA)
  • Dubai Airport Free Zone
  • Dubai Media City
  • Dubai Internet City
  • Dubai Knowledge Village 
  • International Media Production Zone
  • Dubai Silicon Oasis
  • Dubai World Central 
  • Dubai Cars and Automotive Zone
  • Dubai International Academic City 

Pros and Cons of Free zone Areas in Dubai 

When differentiating between free zone vs freehold property, how can we forget to weigh their pros and cons? Let’s determine them below. 

Pros of Free zone Areas
  • These areas eliminate the requirement for a local partner. 
  • It provides 100% ownership to investors and business people.
  • It grants complete liberty over official functions. 
  • There are no restrictions on practicing more than a single commercial activity. 
  •  Free of taxation. 
Cons of Free zone Areas
  • As per a general rule, companies working in free zone areas can also associate within the premises or outside of the UAE. They can’t work with business people within Dubai.  

Freehold Properties in Dubai 

As for freehold properties in Dubai, these are located where foreigners can own residential properties. It can be land, property, or a plot, just not commercial property. These areas were developed as per Law No. 7 of 2006 to allow expats to own property in Dubai. Owning a property in a freehold area grants full ownership of the property over the land. 

Once you’ve purchased any freehold property, you’ll be free to live, rent or sell it according to your preference. Upon purchasing land or property in the available freehold areas, you get registered with Dubai Land Department (DLD). Like any other state, the heir can inherit the possession after the owner’s death.

Indeed, it’s a great opportunity for investors to earn a stable passive income and expats wishing to settle with their families. 

Freehold Areas in Dubai 

Here’s a list of some of the major freehold areas in Dubai. 

  • The Palm Jumeirah
  • Emirates Hills
  • The Meadows
  • The Lakes
  • The Springs
  • Dubai Marina
  • Jumeirah Lake Towers
  • Downtown Dubai
  • Discovery Gardens 
  • Dubai Investments Park
  • Jumeirah Beach Residence
  • The Greens
  • Arabian Ranches
  • Falcon City
  • The Villa
  • Al Barari
  • Dubai Sports City
  • Motor City
  • Green Community
  • Business Bay
  • Jumeirah Village 
  • Jumeirah Islands 

Pros and Cons of Freehold Areas in Dubai 

Let’s make the free zone vs freehold property debate easier for you by listing the pros and cons of freehold areas below. 

Pros of Freehold Areas 
  • You’ll have complete ownership over the property, including the decision-making part. 
  • You can start living in the property, give it up for rent or resell it as per your will.
  • Investments in freehold areas are safe and secured
Cons of Freehold Areas
  • If you decide to do a commercial activity on the property, you’ll only receive the 49% of the shares. On top of that, you’re bound to make a local partner, not a foreigner. 
  • As a freehold property owner, you’ll be in charge of the structural repairs and maintenance of the housing unit. 
  • In case of having tenants, you’ve to keep your eyes open at all times. 

Wrapping Up!

At last, it all boils down to your budget and preferences. You’ve to decide whether you want to grow in the world’s most advanced economy as an entrepreneur or if being a homebuyer brings more joy to your life. That’s why choosing between freehold and free zone depends on the purpose of your investment. But now that you know everything about free zone vs freehold property, the decision-making becomes easier. Upon making up your mind, connect with Zoom Property to get the best property deal on board!

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