The Airbnb business has revolutionized travel and accommodation worldwide, generating global revenues of $8.4 bn in 2022.
The UAE offers a thriving environment for starting an Airbnb business, given its diverse landscapes, cultural attractions, and economic opportunities.
Additionally, travelers are increasingly choosing Airbnb accommodations over hotels for a more authentic experience and the chance to live like a local.
If you want to take advantage of these opportunities, keep reading to learn more.
UAE’s regulations on short-term rentals
When starting an Airbnb business in the UAE, specifically Dubai, it is important to understand the regulations for short-term rentals.
Additionally, all holiday rentals must be registered with the Department of Economy and Tourism (DET).
This registration ensures adherence to the Guide Regulation for the Activity of Leasing Out Holiday Homes.
To list a property on Airbnb as a holiday home, registration with DET is mandatory. Owners can manage up to eight units concurrently. However, if you want to manage more, consider establishing a UAE company and obtaining Dubai Department of Economic Development licenses and approvals.
For tenants aiming to list holiday homes on Airbnb, there are certain requirements to meet. An authorization letter and a No Objection Certificate from the property owner are needed.
Moreover, other documents such as leasing agreements, title deeds, and bills are also required. Ultimately, remember that all rooms within each unit must be rented out to guests on Airbnb.
Read: UAE tourism on the spike
Steps to get a license for your Airbnb business
Step 1: Choose a company name
The process of choosing a company name is relatively straightforward. However, there are specific guidelines and conventions to follow in the UAE.
For example, your chosen business name must not be identical to an existing business name in the UAE. In addition, it is also essential to ensure that the name does not include any offensive language or have religious connotations.
Step 2: Apply for a UAE trade license
After choosing a company name, the next step in starting your Airbnb business in the UAE is to apply for a trade license. This license grants you permission to manage and rent out properties on Airbnb.
You can apply for the license from the DED or from one of the many UAE free zones. To apply, you will need to fill out and submit an application form. Likewise, you will need to provide identification documents and property-related paperwork to support your application.
Step 3: Register with DET
Once you have your trade license, the next step is to register as a homeowner with the DET. Again, this is a mandatory step for anyone who wants to lease out properties as holiday homes on Airbnb.
To register with DET, you can easily create an account on their dedicated website. You will need to register as the property manager or assign a suitable third party. Additionally, you will need to upload:
- a valid Emirates ID card or passport copy,
- a copy of the property’s title deed, and
- proof of Ejari registration.
Afterward, they will send you the payment details to complete the registration process. Costs for registration start at AED 1,590.
Once complete, DET will provide you with a certificate confirming your eligibility to lease out your property. Remember to display this certificate visibly on your Airbnb property to show your compliance with DET regulations.
Step 4: Apply for visas
As a property owner in the UAE, you have the opportunity to apply for a residency visa. This visa allows you to legally reside in the country for an extended period of time.
Applying for a residency visa is a separate process from obtaining a trade license. It involves additional steps such as a medical examination, a blood test, and biometric scanning for the issuance of your Emirates ID.
Moreover, you can also sponsor visas for your family members or employees, enabling them to reside and work in the UAE under your sponsorship. This provides an opportunity for you to support and bring your loved ones or talented individuals to the country.
Taxation and fee structures
When it comes to taxation for an Airbnb business in the UAE, the good news is that there is no tax on rental profits. Both corporate and personal income tax rates remain at 0 percent.
Nevertheless, there are still fees to be aware of. For instance, as the owner or manager of a holiday home in Dubai, you will be responsible for collecting the Tourism Dirham.
This fee amounts to AED 15 per night for each occupied deluxe bedroom. Meanwhile, the fee is AED 10 per night for each occupied standard bedroom.
The Tourism Dirham is applicable for a maximum of 30 consecutive nights. It must be displayed as a separate item on receipts and clearly identified as a fee, not a tax.
Looking ahead
The UAE provides an ideal environment for success in the Airbnb business. Start exploring this lucrative market today and reap the rewards of being an Airbnb host in the UAE.
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