When the Dubai Land Department signed a July 2025 memorandum with Masdar City, it let companies licensed in that free zone own freehold property on Dubai’s mainland, as reported by Dubai Chronicle citing DLD — quietly redrawing a geography of ownership that, for two decades, decided foreign purchases more than price did. Whether a plot sits inside a designated freehold zone, whether the buyer is an individual or a company, and whether that company holds a mainland or a free-zone licence have long mattered more to the outcome than the yield on the asset. It is a narrow, technical step. It is also a signal about the direction of travel, and for anyone weighing a commercial acquisition in the emirate, understanding the machinery behind it matters more than the headline that announced it.
What freehold actually means in a foreign-ownership market
Freehold and leasehold describe two fundamentally different relationships to land. Freehold is outright, perpetual ownership of the property and, depending on the structure, the land beneath it: the holder receives a title deed, can sell, lease, mortgage or bequeath the asset, and faces no expiry date on the right. Leasehold grants the use of a property for a fixed term — commonly up to 99 years in Dubai’s regulated framework — after which the interest reverts to the freeholder. For a commercial investor, the distinction is not academic. Freehold underpins the ability to use an asset as collateral, to hold it across generations, and to capture the full uplift in a rising market rather than an amortising slice of it.
Most mature markets extend freehold to nationals and foreigners alike without geographic restriction. The Gulf has historically taken a more calibrated path, and Dubai’s model is the region’s most studied example. Rather than open the entire emirate to foreign freehold at once, Dubai created designated zones — areas explicitly gazetted where non-GCC nationals and foreign entities may acquire full ownership. Outside those zones, foreign ownership has traditionally been limited to long leasehold or usufruct rights, or required an Emirati partner. The designated-zone architecture is what turned Dubai into a global destination for property capital while preserving a controlled onshore regime, and it is the frame within which every reform, including the 2025 memorandum, has to be read.
The designated-zone architecture and its logic
Dubai’s designated freehold areas are the districts most familiar to international buyers — the master-planned communities and central business districts where towers, retail podiums and mixed-use plots have been sold to foreign individuals and companies for two decades. Within these zones, a foreign purchaser can obtain a title deed registered with the DLD in their own name, whether the asset is a residential apartment, a retail unit or a whole commercial floor. The register is administered by the DLD, with day-to-day regulatory oversight of the sector exercised through the Real Estate Regulatory Agency (RERA), the department’s regulatory arm.
The logic of the zone system is control without closure. By defining ownership geographically, the authorities can channel foreign capital toward areas planned for it — with the density, infrastructure and use-mix designed accordingly — while keeping other land under domestic tenure. For a commercial investor, the practical consequence is that due diligence begins not with the building but with its status: is the plot inside a designated freehold zone, and does the title on offer convey freehold or a leasehold interest dressed in ownership language. Those two questions determine what the buyer can actually do with the asset afterwards — mortgage it, sell it to another foreign entity, or hold it indefinitely.
The free-zone route: JAFZA, DIFC and RAKICC
Alongside the designated-zone map, a second channel to freehold has long existed for corporate buyers: the free-zone company. Certain of the UAE’s free zones were structured so that entities registered within them could hold real estate, and this route became a standard vehicle for institutional and corporate ownership of commercial assets. Companies established in the Jebel Ali Free Zone (JAFZA), the Dubai International Financial Centre (DIFC) and Ras Al Khaimah International Corporate Centre (RAKICC) have historically been recognised as able to hold freehold interests, making the free-zone entity a familiar holding structure for commercial real estate in the emirate.
The attraction of the free-zone route was never only ownership eligibility. A free-zone corporate wrapper can offer confidentiality of the ultimate owner, a straightforward mechanism to transfer the asset by selling the company rather than the property, and alignment with the way international investors already hold assets in other jurisdictions. For a commercial buyer assembling a portfolio — a retail parade, an office floor, a logistics facility — the company-held freehold has often been the default. But that route carried a structural limit: a free-zone company’s ability to own on the Dubai mainland, outside the designated zones and outside its own free zone, was constrained. Bridging that gap generally meant additional structuring. It is precisely this limit that the 2025 development began to address.
July 2025: the Masdar City memorandum and what it changed
In July 2025, the DLD signed a memorandum of cooperation with Masdar City, the Abu Dhabi free zone, under which companies licensed in Masdar City were permitted to own freehold property on Dubai’s mainland — a step reported by Dubai Chronicle citing the Dubai Land Department in its July 2025 coverage. The significance lies less in the single free zone named than in the mechanism used. Rather than redraw the designated-zone map or amend ownership law wholesale, the authorities extended freehold eligibility through a bilateral cooperation agreement between the land registry and a specific free zone. It is an incremental, memorandum-by-memorandum approach — one that widens the pool of companies able to own mainland freehold without dismantling the controlled architecture that governs it.
For the commercial market, the reading is directional. A single memorandum with one free zone does not, on its own, reshape the ownership landscape. But it establishes a template. If eligibility to own mainland freehold can be extended to a free zone by cooperation agreement, the same instrument can in principle be used again, progressively enlarging the set of corporate structures that can hold commercial assets on the mainland in their own name. Investors should be careful not to overstate the immediate effect — this is a specific arrangement, not a blanket liberalisation — while recognising that the trajectory it implies is toward wider, not narrower, foreign corporate access. The precise terms, conditions and any use or approval requirements attaching to such ownership are matters to verify with the DLD and qualified advisers before acting.
Why title, register and structure decide the deal
Whatever the ownership route, the transaction ultimately turns on the title deed and its registration with the DLD. The title deed is the definitive record of ownership; registration converts a contractual claim into a real, enforceable property right recognised by the state. For foreign commercial buyers, three verification points recur. First, the nature of the interest: does the deed convey freehold or a leasehold term, and if leasehold, how long remains and on what reversion terms. Second, the zone status: whether the plot lies within an area where the intended buyer — individual or corporate, mainland or free-zone — is eligible to hold the interest on offer. Third, the holding structure: whether the asset is bought directly or through a company, and what that choice implies for future transfer, financing and succession.
These are not procedural footnotes. They determine whether the asset can be mortgaged to release capital, whether it can be sold to the widest pool of buyers or only to a restricted set, and whether ownership survives a change in the buyer’s own corporate arrangements. A commercial acquisition that looks identical on a yield spreadsheet can carry materially different risk depending on which side of these lines it falls. This is why, in Dubai more than in most markets, the ownership question is answered before the pricing question — and why a reform that shifts eligibility, even at the margin, is worth close attention.
What the reform means for the commercial investor
The practical takeaways for a foreign investor in Dubai commercial real estate are best kept grounded. The designated-zone system remains the backbone of foreign freehold: the first question about any asset is still whether it sits within a zone open to the intended buyer. The free-zone company remains a principal vehicle for corporate ownership, with JAFZA, DIFC and RAKICC structures long recognised for holding freehold interests. What the July 2025 memorandum adds is a widening of the corporate on-ramp to mainland ownership — beginning with one free zone, through an instrument that can be repeated.
For investors, that argues for a few disciplines. Structure the holding with future flexibility in mind, since the rules governing which entities can own where are evolving rather than fixed. Treat zone status and title verification as the first gate of due diligence, not a closing formality. And read regulatory signals for direction rather than for immediate opportunity: the memorandum route suggests a policy inclined to broaden access incrementally, which favours patient, well-structured positions over speculation on a single announcement. The broader market backdrop is supportive of that patience — Dubai recorded roughly AED 917 billion in total real-estate transaction value across all transaction types in 2025 according to DLD figures, a scale that reflects deep and liquid demand, though that headline covers all transaction types rather than sales alone. None of this substitutes for jurisdiction-specific advice on any given asset.
Conclusions
Dubai’s foreign-ownership regime for commercial property has always been a matter of geography and structure as much as of capital. Freehold has been available to foreigners within designated zones and, for companies, through recognised free-zone vehicles such as JAFZA, DIFC and RAKICC. The July 2025 memorandum of cooperation between the DLD and Masdar City, reported by Dubai Chronicle, did not tear down that architecture; it extended it, letting companies of one free zone own freehold on the Dubai mainland through a bilateral instrument that can be used again. For the commercial investor, the lesson is not that the rules have been swept away but that they are moving in a consistent direction — toward wider corporate access, extended carefully and incrementally. The winning approach is the one Dubai’s ownership system has always rewarded: verify the title, confirm the zone, structure for what the rules may become, and treat every figure and every eligibility as something to be checked against the register, not assumed.
This article is for general information only and does not constitute legal, tax or financial advice.