Leasing a property in Jebel Ali Free Zone (JAFZA) offers businesses a strategic opportunity to be a part of Dubai’s most established commercial hub. From warehouses to open plots, businesses can lease a number of units in JAFZA. Leasing property in JAFZA is governed by a comprehensive legal framework ensuring transparency and protecting the rights of all stakeholders.
Leasing Property in JAFZA
There are multiple options for commercial leasing in JAFZA, including:
- High-grade offices: Businesses in JAFZA can lease office spaces or entire buildings equipped with value-added facilities such as fire safety, internet connection, parking and security.
- Warehouses: JAFZA offers high-quality, thermally insulated, purpose-built warehouses for lease. These units also include office spaces, typically ranging from 313 sqm to 670 sqm.
- Open plots: Starting from 5,000 sqm, lands are available for short and long-term lease in JAFZA with annual rent starting from AED 40/sqm.
Jebel Ali Free Zone Leasing Rules
JAFZA operates under a structured and comprehensive legal framework established under Decree No. (1) of 1985 and administered by the free zone authority. All leasing activities within the free zone are governed by the JAFZA rules, regulations and applicable UAE and Dubai tenancy laws, unless expressly modified by the free zone authority. That said, Law No. (26) of 2007as amended by Law No. (33) of 2008, applies to all property leases in JAFZA.
Sub-leases
Sub-leases require prior approval from the JAFZ Authority. Subject to JAFZA Authority approval, there is no limitation on the number of subleases allowed.
- The sub-lessor must have a valid land lease and a fully-constructed building
- Sub-lease is only allowed between subsidiaries and sister companies
- All the activities must be in accordance with JAFZA rules regarding safety, environment, health and the zoning plan
- There should be enough space for both the sub-lessee and the sub-lessor to operate
- The sub-lessor undertakes to be fully responsible for the activities of the sub-lessee
- A sub-leasing fee of AED 20,000/year will be charged by the JAFZ Authority
Insurance
Tenants are required to insure their property in JAFZA against fire and other perils. Other requirements regarding property insurance in JAFZA are as follows:
- The policy shall be under the name of the tenant and the JAFZ Authority
- The policy should be enough to cover the replacement costs of the structure, fixtures and fittings
- Pre-built units are insured by the JAFZ Authority for standard annual charges
- If the pre-built structure is damaged, tenants will pay a deductible amount of AED 1000 for offices and AED 3000 for industrial units and banks
- The JAFZ Authority will not be responsible for loss or damage to tenants’ contents under any circumstances
Termination of Lease
The tenants in JAFZA are responsible for the following things when a lease is terminated:
- Restoring the property to its original condition
- Disposing of any contaminated soil as per JAFZ Rules and Dubai Municipality regulations
- JAFZ Authority will issue a notice to the tenant if any goods are left on the property. If the goods are not removed within the prescribed time, the Authority has rights to auction the abandoned goods.
Mortgage of Constructed Properties
Tenants mortgaging a property in JAFZA constructed over leased land should meet the following criteria:
- The financial institution must be licensed by the Central Bank or bythe Dubai Financial Services Authority (DFSA).
- The contract of mortgage must be signed in front of the registrar, who shall then enter the details into the Mortgage Register
- More than one mortgage can be secured on an immovable property
- The mortgagor is required to pay a mortgage registration fee of 0.12% of the debt value, an amendment fee of 0.12% of the total debt in case of any changes to the mortgage terms and AED 500 for mortgage cancellation.
Commercial Lease Renewal in JAFZA
Businesses operating in JAFZA can renew their lease through the following process:
- Step 1: Log in to ‘Dubai Trade Portal’
- Step 2: Navigate to ‘Lease’ and select ‘Renew Lease – Approval’
- Step 3: Create a new request and submit all the required documents
- Step 4: Submit the application and receive a renewed lease in 1 working day
Documents Required for Lease Renewal
The lease rental payment confirmation and updated copies of insurance confirmation are required to renew the lease of a rental property in JAFZA.
FAQs
What is JAFZA and why do companies lease property there?
JAFZA is a leading economic free zone in Dubai that supports global trade, logistics and industrial activities. Companies lease property there to benefit from strategic location, tax advantages, world-class infrastructure and investor-friendly regulations.
What types of properties are available for lease in JAFZA?
JAFZA offers a range of properties, including high-grade office spaces, purpose-built warehouses, industrial units and open plots for long-term lease.
What are the requirements for leasing in JAFZA?
To lease in JAFZA, companies must obtain the necessary approvals from the JAFZA Authority and hold a valid trade license. They must also comply with leasing rules, zoning regulations, and operational guidelines set by the free zone authority.
This is all about leasing property in JAFZA, including its regulations, sub-leasing framework and renewal process. The structured leasing system, along with clear compliance requirements enhance the convenience of businesses. In addition, world-class infrastructure, availability of utilities and round-the-clock security make JAFZA ideal to rent commercial properties in Dubai.
Stay tuned to dubizzle’s property blog to learn more about Dubai free zone business setup.
