Structuring the ownership of a Dubai property: direct, SCI or company?

Holding directly

This is the simplest scheme. The asset sits directly in your estate; rent and capital gains follow the treatment described on the rental income and capital gains pages. On your death, the transmission of a property situated in the Emirates follows the rules of devolution and the treaty's inheritance provisions — a point to anticipate, as the applicable law and the duties may differ from those for a French asset.

Interposing an SCI

A preliminary point on the Dubai side: an SCI or a French company cannot, as a rule, be registered directly as owner with the Dubai Land Department; corporate ownership of a Dubai property runs through a company approved by the DLD (notably certain free-zone structures, such as JAFZA offshore companies), the French structure holding, where appropriate, the shares of that company — subject to prior validation with the DLD and to a full tax analysis of the ownership chain. The eligibility of the contemplated structure must be confirmed case by case with the DLD, as not all free-zone companies have the same capacity to acquire property.

The société civile immobilière (SCI) makes it possible to organise joint ownership and to prepare transmission (gift of shares, splitting of ownership). Beware, however: the SCI does not remove the asset from the IFI base of a French resident, the value of the shares representing the property remaining subject to it. The tax treatment of income depends on the ownership chain actually used (a DLD-approved company held by the SCI) and on how it interacts with the treaty.

Holding through an Emirati company

Ownership through a company established in the Emirates is sometimes considered. It raises serious questions: real economic substance of the structure, place of effective management (a company run from France may be regarded as tax-resident there), possible application of anti-abuse rules, and interaction with UAE Corporate Tax, in force since 2023. A scheme lacking substance, motivated solely by tax advantage, is fragile.

The choice also has inheritance consequences: held directly, the property is taxable only in the State where it is situated (treaty of 19 July 1989, art. 17, § 1 — the UAE levy no inheritance duties); held through a company, it becomes shares — movable assets taxable in France if the deceased was a French resident (art. 17, § 3). Interposing a company may thus forfeit the treaty inheritance advantage.

There is no default "optimal" scheme

The right scheme depends on the purpose: to receive income, to prepare a succession, to keep flexibility, or to accommodate several investors. Each of these objectives points to a different structure, with its own cost and constraints. That is precisely the object of a prior review, before you commit.

Comparing the three modes of ownership

The table below sets side by side the three schemes most frequently considered by a buyer who is a French tax resident: purchase in one's own name, purchase through an Emirati company formed for the purpose, and the scheme in which an SCI or a French company holds the shares of a DLD-approved company, itself the registered owner — an SCI cannot, as a rule, appear directly on the title deed. It is an overall reading grid; each line refers to rules whose application depends on the specific facts.

This table does not exhaust the subject. It does show the essential point: none of the three schemes makes French tax disappear, and each shifts the burden — towards IFI, succession or Corporate Tax — rather than removing it.

Worked example: an AED 2,000,000 property, directly or through an SCI holding a DLD-approved company

Take a French tax resident who buys an apartment in Dubai for AED 2,000,000 — approximately €476,000 (July 2026) — lets it for AED 120,000 a year (around €28,500), then resells it after five years realising a gain of €100,000.

During the holding period: a French charge on the rent that is nil in practice

Held directly, the rent constitutes property income declared in France. The treaty of 19 July 1989 nevertheless grants a tax credit equal to the French tax: the charge is neutralised, and only an effective-rate effect on the taxation of the household's other income remains (art. 19, § 1).

Since a French SCI cannot, as a rule, be registered directly as owner with the Dubai Land Department, the corporate scheme here means an SCI holding the shares of a DLD-approved company, itself the registered owner of the property. The tax analysis then changes in nature: the rent is received by the Emirati company, the sums reaching the SCI and its shareholders (distributions) do not necessarily qualify as property income, and the possible application of articles 123 bis or 209 B of the CGI must be checked case by case. The interposition therefore saves nothing as a matter of principle during the holding period; it adds set-up and running costs, and calls for a full tax analysis of the ownership chain.

On the IFI side

Taken alone, a €476,000 asset does not trigger IFI: the tax applies only if the household's net taxable real-estate wealth exceeds €1.3 million. The Dubai property is, however, added to worldwide real-estate wealth and may, combined with other assets, tip the household over the threshold — whether held directly or through the SCI's shares (art. 965 CGI).

On resale: around €38,200 of levies under both schemes

The sale takes place after five years of ownership: the allowances of article 150 VC of the CGI, which run only from the sixth year (6% per year for income tax from the 6th to the 21st year, 1.65% per year for social levies), do not yet apply. The taxable gain therefore remains €100,000.

The result: €19,000 of income tax (19%), €17,200 of social levies (17.2%) and €2,000 of surtax on high gains, article 1609 nonies G of the CGI applying above €50,000 of taxable gain, at a rate of 2% for a €100,000 gain. Around €38,200 in total, the treaty credit — capped at the Emirati tax, nil in practice — changing nothing.

In the corporate scheme, the comparison is not term for term: the gain is realised by the DLD-approved company, its passing up to the SCI and then to the shareholders follows its own analysis, and the sale of the SCI's shares is examined separately. The individuals' regime described above applies to direct ownership only.

The conclusion stands: interposing a structure does not erase the French tax burden — it changes its nature and shifts the points of taxation. The case for the corporate scheme lies elsewhere — transmission, joint ownership, family governance — and carries in return the inheritance shift described above, the property becoming, ultimately, shares, i.e. movable assets. Note, finally, the value of timing under direct ownership: one further year of ownership would have opened the first year of allowance.

The false good ideas

Three schemes come up regularly in the projects submitted to us. None survives scrutiny where it rests solely on the aim of erasing French tax.

The interposed foreign company without substance

The idea is to place the property in an offshore structure to shield rent and gains from French tax. Article 123 bis of the CGI, often cited in this context, targets entities whose assets are mainly financial: it therefore rarely reaches a purely real-estate structure. The protection is no less illusory. A company run from France may be regarded as French tax-resident; article 209 B of the CGI may apply where the interposition runs through a French company subject to corporate income tax; and the abuse-of-law procedure remains available against arrangements with a mainly or exclusively tax-driven purpose.

The poorly documented split of ownership

Giving away the bare ownership of the shares while retaining the usufruct is a classic transmission tool. Poorly executed — approximate valuation of the usufruct, no proper deed, shareholder current accounts left untouched, quasi-usufruct without an agreement — it exposes the donor to a challenge of the gift or of its valuation and strips the scheme of most of its point. A split of ownership must be documented: deeds, valuations, registers, all kept up to date.

The local nominee

Having the property acquired by a third party established in the Emirates, against an informal acknowledgment, stacks up the risks. In civil terms, the real investor's ownership is unenforceable and rests solely on the nominee's good faith. In tax terms, the sham falls within the abuse-of-law rules. Locally, the arrangement may breach Emirati ownership rules. This is the scheme to rule out, without exception.

If you are not a French tax resident

The analysis on this page is built around French tax residence — IFI, French inheritance duties, the France-UAE treaty of 19 July 1989. None of it transposes automatically to other jurisdictions. A UK or US resident weighing a company structure for a Dubai property faces a different set of rules: each system has its own controlled-foreign-company and attribution mechanisms, which may tax the shareholder on income accumulated in a personal holding company, as well as its own inheritance or estate-tax treatment of shares as opposed to directly held property. The trade-offs described above — where interposing a company forfeits a treaty advantage on succession — may therefore point in a different direction under another system, and must be re-run under the rules of your own State of residence. If you are a US person, see our dedicated page: US persons moving to the UAE.

Two points hold for everyone. First, the UAE position does not depend on your residence: no personal income tax or capital-gains tax for individuals, and Corporate Tax at company level under the conditions described above. Second, on the estate side, non-Muslim owners of Dubai assets may register a will with the DIFC Wills Service Centre to organise the local devolution of the property — an instrument of succession law, distinct from any question of taxation, which does not displace the tax analysis in the owner's State of residence.

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