Structuring a zero-tax Dubai portfolio – Should you invest in residential or commercial property?

Dubai’s property market has attracted investors from across the world for years, but the reasons people are looking at the emirate are changing. It is no longer just about buying a holiday home or securing a rental property. With more international businesses setting up operations in Dubai, the city is also becoming an important destination for investors looking at long-term property opportunities.

The numbers tell part of the story. In 2025, the Dubai Chamber of Commerce welcomed 71,830 new member companies, taking its total active membership to 292,486. That was a 13.2% increase from the previous year. Behind this growth is a steady arrival of businesses, entrepreneurs and employees, all of whom contribute to demand for office space, retail units and residential accommodation.

Another huge draw for investors is the UAE’s tax setup. You don’t pay any personal income tax or capital gains tax here. Businesses pay a flat 9% corporate tax, and that’s only on profits over AED 375,000, while qualifying free zone companies can still pay zero.

With so many businesses and professionals heading to Dubai, Hong Kong investors are facing a practical decision: does residential property offer better returns, or is commercial real estate where the real opportunity lies? The answer really depends on what you want from your investment, whether that is steady rental income, flexibility or long-term growth.

Why commercial property deserves a closer look

The arrival of new businesses has created a growing requirement for commercial space, particularly in established business districts such as Business Bay, Jumeirah Lakes Towers (JLT) and Downtown Dubai.

For investors who do not intend to manage a property themselves, commercial real estate can be worth considering. One of its biggest attractions is the nature of the tenancy. Commercial leases usually mean longer commitments, often starting at three years. That translates to fewer tenant turnovers and a much more predictable rental income while you hold the property.

You can also earn solid rental returns. Select commercial spaces, like those at DAMAC Park Towers, offer gross yields roughly between 5% and 8%. Actual returns will, of course, depend on the purchase price, occupancy and rental terms.

Another consideration is residency. Yes, commercial real estate does qualify for the UAE’s 10-year Golden Visa. You just need to hit the AED 2 million threshold and meet the standard official criteria.

The costs, however, need to be factored into the decision. While the purchase process is broadly similar to that of residential property, commercial acquisitions generally attract 5% VAT (which can often be recovered if purchasing through a VAT-registered corporate entity), in addition to the 4% Dubai Land Department (DLD) transfer fee. Investors should also account for service charges, developer NOC fees, and brokerage costs, which are typically 2% on resale transactions.

What makes residential property a strong investment?

Commercial property may offer longer leases, but residential real estate has an advantage that is difficult to overlook: a much wider pool of potential tenants.

As companies continue to establish themselves in Dubai, their employees need somewhere to live. This drives strong demand across all property types and budgets, from young professionals and relocating executives with families to entrepreneurs setting up a long-term base.

Infrastructure continues to shape location choices, with the AED 128 billion expansion of Al Maktoum International Airport leading the way. Designed to handle 260 million passengers annually at full capacity, its initial phase will support 150 million.

Dubai South is a prime example of this, future job hubs and better transit connections naturally draw more people looking for homes. While new infrastructure never guarantees property values will jump, it definitely makes nearby neighborhoods a lot more appealing over time.

Owning a home also gives landlords total control over their rental strategy. With yearly lease renewals, you can tweak rent to match the current market within local regulations. Plus, if your plans ever shift, you always have the option to sell or move in yourself.

For investors who value liquidity and want access to a larger resale market, residential property can therefore be a more comfortable starting point.

Three DAMAC Developments to Consider

There is no single investment approach that works for everyone. Some buyers are primarily interested in rental income, while others are comfortable holding a property for several years in the hope of capital appreciation. The choice of development should reflect that difference.

In partnership with DAMAC Properties, Benham & Reeves is looking at three opportunities that cater to different investment preferences.

DAMAC Safa Two: For buyers looking at Central residential locations

Created in collaboration with luxury jewellery brand de GRISOGONO, Safa II sits along the Sheikh Zayed Road corridor. Its central location makes it relevant to professionals who want to live close to Dubai’s key business and lifestyle districts. For investors, the appeal lies in the location and its potential to attract tenants looking for a well-connected address.

DAMAC Islands Villas: For a longer-term investment approach

Not every investor is looking for an apartment in the middle of the city. DAMAC Islands caters to buyers interested in villa living within a planned residential community. Its family-oriented setting makes it worth exploring for those looking at larger homes and longer holding periods. Properties meeting the relevant investment criteria may also qualify towards the UAE Golden Visa.

DAMAC Lagoon Views: Where Residential meets commercial

DAMAC Lagoon Views is particularly interesting for investors who want to look beyond conventional residential ownership. Alongside its apartments, selected ground-floor commercial units are available for businesses operating under mainland licences.

These spaces are intended for everyday services that a residential community needs, including restaurants, retail outlets, clinics and wellness centres. Projected annual rental income for certain commercial configurations ranges from AED 350,000 to AED 560,000.

The opportunity here is slightly different. Rather than relying solely on residential tenants, investors can explore the demand generated by businesses serving the surrounding community.

Meet Dubai property specialists in Hong Kong

Choosing between residential and commercial property comes down to what you want out of the investment. If you’re after long-term rental stability, a commercial lease is hard to beat. But if you’d rather keep things flexible and have an easier time selling down the line, residential is usually the better fit. Purchase costs, location, tenant demand and the intended holding period all deserve attention before making a decision.

To help Hong Kong investors understand these options, Benham and Reeves is hosting a Dubai Property Showcase and Investment Seminar in partnership with DAMAC Properties.

The event brings together property specialists and senior representatives from DAMAC Properties, giving visitors a chance to explore available developments, compare investment options, and understand the costs of buying property in Dubai.

Event Details

Dates: 28–29 November 2026 (Sat & Sun)

Seminar: 2:00 PM

Private consultations: 11:00 AM–6:00 PM

Venue: Unit 1511, 15/F, ICBC Tower, Three Garden Road, Central, Hong Kong

Reserve your seminar seat or book a private consultation

Whether you are considering a residential apartment, a commercial unit or a larger property investment, understanding how each option fits into your financial plans is a good place to start.

Disclaimer: To buy or not to buy non-local off-plan properties? Assess the risks before you buy! 境外樓花買唔買？計過風險先好買！*Prices and details are correct at the time of going to press. Expected rental yield per annum, not guaranteed. ^Travel times are an approximation only, sourced from Google Maps, and may reference driving, public transport, cycling and/or walking times. Project no.: 2200 (Safa II – registered under the Dubai Land Department as Aykon City 3); 3698 (DAMAC Islands – Seychelles 1); 3178 (Lagoon Views 11) & 3214 (Lagoon Views 12) [DAMAC Lagoons] issued by Dubai Land Department. Lease Term: Freehold. Purchasers are acquiring an interest in the land, the building to be erected thereon and/ or a right to use and occupy the properties in the building. Estimated Completion Date: 2027 Q4 (Safa II); Q2 2029 (DAMAC Islands – Seychelles 1); Q2 2027 (DAMAC Lagoon Views 11 & 12). Computer-generated images for illustrative purposes only. Purchasing uncompleted properties situated outside Hong Kong is complicated and contains risk. You should review all relevant information and documents carefully before making a purchase decision. If in doubt, please seek independent professional advice before making a purchase decision. The non-licensed staff engage in estate agency work exclusively in relation to properties outside Hong Kong and they are not licensed to deal with any property situated in Hong Kong. Property reference number: BRHK-UAE251102 (Safa II), BRHK-UAE251001 (DAMAC Islands), BRHK-UAE250201 (DAMAC Lagoon Views). Advertisement Date: 9 Nov 2026. Benham & Reeves (Hong Kong) Limited License No. C-092169.