Commercial leases in Dubai are governed by the same tenancy law as residential ones, Law No. 26 of 2007 as amended by Law No. 33 of 2008, but three rules apply differently to business premises: a landlord who takes the unit back for personal use cannot re-let it for three years rather than two, a tenant who leaves business premises empty for 30 consecutive days can be evicted mid-term, and the rent carries 5% VAT that residential rent does not.

Almost everything written about Dubai tenancy assumes an apartment. This guide covers what changes when the tenant is a business: registering Ejari for a trade licence, how the RERA rent-increase brackets apply to an office or a shop, fit-out and who owns it at the end, subletting, the eviction grounds that exist only for commercial premises, and where the law is silent and your contract has to do the work.

The Same Law Covers Offices, Shops and Warehouses

Article 2 of Law No. 26 of 2007, as replaced by Law No. 33 of 2008, defines real property as immovable property leased “for residential purposes or for practising any commercial activity, trade, profession, or other lawful activity.” Article 3 applies the law to all leased land and property in Dubai. There is no separate commercial tenancy statute.

The only carve-outs in Article 3 are hotels and accommodation provided to employees free of charge. A warehouse in Al Quoz, a retail unit in a mall, a clinic, a workshop and a head office are all covered on the same statutory footing as a flat in Marina.

What differs is not the framework but a handful of provisions that turn on whether the premises are residential or not, plus a tax treatment that sits entirely outside the tenancy law.

The Three Rules That Work Differently for Business Premises

Issue Residential Commercial / non-residential
Bar on re-letting after the landlord evicts for personal or family use (Art. 26) 2 years 3 years
Eviction for leaving the unit empty (Art. 25(1)(d)) No equivalent ground 30 consecutive days, or 90 non-consecutive days in a year, without a valid reason
VAT on rent Exempt for qualifying residential leases Standard-rated at 5%

The vacancy ground is the one commercial tenants never see coming

Article 25(1)(d) lets a landlord seek eviction before the lease expires “where the leased Real Property is used as business premises and the Tenant leaves it unoccupied without a valid reason for a period of thirty (30) consecutive days or ninety (90) non-consecutive days in a year.” There is no residential equivalent. A residential tenant can travel for four months and remain perfectly compliant; a commercial tenant cannot.

This matters most for businesses that lease a unit to hold a trade licence or a visa quota while operating elsewhere, for seasonal retail, and for companies that pause operations. The saving phrase is “without a valid reason,” which leaves room for a documented refurbishment, a regulatory suspension or a supply interruption, but the burden of showing it sits with the tenant. If your business will genuinely be dormant for a period, keep the evidence contemporaneous rather than assembling it after a notice arrives.

The three-year re-letting bar cuts both ways

Article 26 is the counterweight to the personal-use eviction ground. Where a landlord recovers non-residential premises to use them personally or for a first-degree relative, they may not let the property to a third party for at least three years from retaking possession, and a tenant evicted on that basis may claim compensation if the bar is broken. For an evicted retailer, checking the unit twelve or eighteen months later is a legitimate and cheap piece of due diligence.

Ejari Registration and Your Trade Licence

Article 4 requires every lease contract to be registered with RERA. For a commercial tenant, Ejari is not just a tenancy formality: the economic department requires a registered lease for the address on your trade licence, so an unregistered or lapsed Ejari can block a licence issue or renewal.

That linkage is the practical reason commercial Ejari gets done on time when residential Ejari often does not. If the Ejari certificate expires and the trade licence renewal falls due, the licence is the thing that stops, and with it the visas attached to the establishment. Anyone approaching a trade licence renewal in Dubai should check the Ejari expiry date first.

Registration itself runs through the Dubai Land Department’s Ejari service. The Department’s published fee for registering or renewing an Ejari contract is AED 177.75 through the DLD website or the Dubai REST app, and AED 220 at a real estate services trustee centre. The mechanics are the same as for a home, and the process is covered in detail in our guide to Ejari registration and status tracking.

Ejari is not the same as a fit-out permit or a signage permit

A registered lease establishes the tenancy. It does not authorize you to build anything, change the shopfront or put up a sign. Those approvals come from the building owner or master developer and the relevant municipal or free zone authority, and they are usually conditions of the lease as well as of the permit. Budget time for them separately: a fit-out approval chain is the most common reason a commercial tenant pays rent on a unit it cannot yet trade from.

Rent Increases: The RERA Brackets Apply to Commercial Too

Decree No. 43 of 2013 sets five rent-increase brackets based on how far current rent sits below the average market rent, and the decree contains no language distinguishing residential from commercial property anywhere in its text. Article 2 applies it to landlords in Dubai including those in special development zones and free zones such as the DIFC.

How far the current rent sits below the average rental value Maximum increase permitted
Up to 10% below No increase
11% to 20% below 5%
21% to 30% below 10%
31% to 40% below 15%
More than 40% below 20%

Average rental value is determined by the Rent Index approved by RERA under Article 3 of the decree. The same RERA rental increase calculator used by residential tenants is the reference point for a commercial renewal, which is a fact many commercial landlords and tenants negotiate in ignorance of.

Two caveats belong with that. The index is thinner for specialized commercial stock than for apartments, so a warehouse or a clinic may have little comparable data behind its figure, and the decree caps the increase rather than guaranteeing one. And an increase is only one of the things that can change at renewal.

The 90-day notice applies to any change in terms

Article 14, as replaced by Law No. 33 of 2008, requires a party who wishes to amend any of the lease terms to notify the other “no less than ninety (90) days before the date on which the Lease Contract expires,” unless the parties agree otherwise. That covers rent, but also term length, payment schedule, use clauses and service charge arrangements.

Article 6 then supplies the default if nobody acts: where the tenant remains in occupation after expiry without objection from the landlord, the contract renews for the same term or one year, whichever is shorter, on the same terms. A landlord who misses the 90-day window is generally stuck with the old rent for another cycle.

Fit-Out, Alterations and Who Owns the Improvements

Article 19 prohibits the tenant from making any changes to the property without the landlord’s written consent and the necessary official licences. Article 23 then states that the tenant may not remove leasehold improvements they have made, unless the parties agree otherwise.

Read together, those two articles create the commercial tenant’s biggest hidden cost. You pay for the fit-out, you need written landlord consent plus authority approvals to install it, and on the statutory default you cannot take it out again at the end of the term. Shopfronts, partitioning, specialist flooring, cold rooms and mezzanines all sit on the wrong side of that default.

The phrase “unless otherwise agreed” is doing all the work, and it is why fit-out and reinstatement provisions are the clauses worth negotiating hardest in a Dubai commercial lease. Three positions are common in practice, and the law does not prefer any of them: the tenant removes and reinstates at the end, the improvements stay and the landlord grants a rent-free period as consideration, or the improvements stay with no compensation. Only the last is the statutory default.

Article 17 provides the mirror obligation on the landlord, who may not make changes to the property that would prevent the tenant’s full use of it, and who bears responsibility for defects and damage not attributable to the tenant’s fault. Article 18 requires the landlord to obtain the necessary approvals for the tenant’s decoration works that do not affect the structure.

Maintenance sits with the landlord unless the contract says otherwise

Article 16 makes the landlord responsible for maintenance works and for repairing any defect or damage during the lease term, unless the parties agree otherwise. Commercial leases very frequently do agree otherwise, shifting internal maintenance and sometimes plant to the tenant. Check which one your contract does, because the statutory default is more tenant-friendly than the market norm.

Article 11 adds that rent covers the use of amenities such as pools, playgrounds, gyms and car parks unless otherwise agreed, which in a commercial context is most relevant to parking allocations. Building service charges are a separate matter governed by the jointly owned property regime rather than the tenancy law, and our guide to Dubai service charges and how they are calculated covers how those are set.

Subletting, Assignment and Selling the Business

Article 24 prohibits the tenant from assigning use of or subletting the property to third parties without the landlord’s written consent. Article 8 then provides that a sub-lease expires when the head lease term expires, unless the landlord expressly agrees otherwise.

Article 8 is the trap in a business sale. If you are buying a business whose value sits in its location, the sub-tenancy you inherit is only as long as the head lease behind it, whatever the sub-lease document says. Verify the head lease term and its registration, not just the agreement you are being shown.

Unauthorized subletting is also an Article 25(1) ground for eviction before the lease expires, so an informal arrangement to share space with another licensed entity is a real risk rather than a technicality. If the plan is a shared or serviced address rather than exclusive premises, the cleaner route is a product designed for it, and the trade-offs are set out in our comparison of a virtual office against a flexi-desk for a Dubai trade licence.

Rent, Cheques and the Payment Structure

Article 12 provides that where the parties have not agreed a payment schedule, rent must be paid annually in four equal instalments in advance. That is a default, not a cap, and commercial landlords routinely contract for one or two cheques.

The number of cheques is a negotiating variable in its own right, and in a commercial context it usually trades against the rent figure and the rent-free fit-out period. A tenant offering a single cheque is buying a discount; a tenant asking for six is paying for the cash flow.

Article 20 permits the landlord to require a security deposit and requires its return, or the remainder of it, on expiry of the lease. The law fixes no percentage and no return deadline for either residential or commercial premises. Commercial deposits are typically larger than the residential convention because of the reinstatement risk, and the practical protection is the same as anywhere: a documented condition report at handover. Our guide on recovering a security deposit in Dubai sets out the evidence chain and the dispute route.

Article 21 requires the tenant to surrender the property in the condition in which it was received, except for ordinary wear and tear or damage beyond the tenant’s control. Article 22 puts all government fees and taxes due for use of the property on the tenant.

VAT on Commercial Rent

A lease of commercial property in the UAE is a standard-rated supply at 5% VAT. Residential leases are exempt. This is the clearest financial difference between a commercial and a residential tenancy, and it sits in tax law rather than the tenancy law.

The exemption in the VAT legislation is written for residential buildings, so anything outside that definition, including offices, shops, warehouses and serviced premises with additional services, falls to the standard rate. Where the landlord is VAT-registered, the 5% is added to the rent and to most associated charges.

Two practical consequences follow. A VAT-registered tenant will usually recover that input tax, so the real cost differential is a cash flow issue rather than a permanent one. A tenant that is not registered, or that makes exempt supplies, absorbs it. Either way, confirm whether the rent quoted to you is inclusive or exclusive of VAT before you sign, because a 5% difference on a multi-year commitment is not a rounding error. The full treatment of property transactions, including the first-supply and bare-land rules, is set out in our guide to VAT on property in the UAE.

Ending the Lease: Eviction, Notice and First Refusal

Article 7 bars either party from unilaterally terminating a valid lease during its term. Termination can only happen by mutual consent or in the cases the law provides. Eviction before expiry needs an Article 25(1) ground; eviction on expiry needs an Article 25(2) ground plus twelve months’ notice.

Grounds to evict during the term

  • Failure to pay rent within 30 days of a notice to pay
  • Subletting without the landlord’s written consent
  • Using the property, or allowing it to be used, for an illegal purpose or in breach of public order
  • Business premises left unoccupied without a valid reason for 30 consecutive days or 90 non-consecutive days in a year
  • Alterations that endanger the property, or deliberate damage
  • Use for a purpose other than the one agreed, or in breach of planning and zoning regulations
  • Risk of structural collapse, certified by Dubai Municipality
  • Failure to comply with a legal or contractual obligation within 30 days of notice
  • Government-ordered demolition for urban development

Grounds to evict on expiry, with twelve months’ notice

Article 25(2) limits these to four: demolition and reconstruction or additions, with the necessary permits; restoration or maintenance work that cannot be done with the tenant in occupation, certified by Dubai Municipality; the owner’s own use or that of a first-degree relative where they have no suitable alternative property; and the owner’s intention to sell. In every case the landlord must notify the tenant of the eviction reasons at least twelve months before the date of eviction. The mechanics of that notice, including the service requirements, are covered in our guide to the Dubai eviction notice and the 12-month rule.

The right to come back

Article 29 gives a tenant a right of first refusal to return to the property where the landlord demolished and reconstructed it, or renovated and restored it, with the rent set under the Article 9 valuation criteria. The tenant must exercise that right within 30 days of being notified. For a business with location-dependent goodwill, that is a materially valuable right, and the 30-day window makes it easy to lose.

Disputes

Rental disputes in Dubai go to the Rental Disputes Center, not the ordinary courts. The filing fee is 3.5% of the annual rent, with a minimum of AED 500 and a maximum of AED 20,000, and half is refunded if the case settles.

Because the fee is a percentage of annual rent capped at AED 20,000, the cap bites earlier for commercial tenancies than residential ones: any lease above roughly AED 571,000 a year pays the same maximum. On a large commercial tenancy that makes the filing fee a small fraction of the amount at stake, which changes the calculus on whether to litigate compared with a residential dispute. The process, evidence requirements and timeline are set out in our guide to the RERA complaint and Rental Disputes Center process.

Frequently Asked Questions

Does Dubai’s tenancy law cover commercial property?

Yes. Article 2 of Law No. 26 of 2007, as replaced by Law No. 33 of 2008, defines real property to include premises leased for practising any commercial activity, trade, profession or other lawful activity, and Article 3 applies the law to all leased land and property in Dubai. The only exclusions are hotels and accommodation provided rent-free to employees. There is no separate commercial tenancy statute.

Do the RERA rent increase caps apply to a commercial lease?

Yes. Decree No. 43 of 2013 sets the five increase brackets by reference to how far the current rent sits below the average rental value, and its text draws no distinction between residential and commercial property. Article 2 extends it to landlords in Dubai including those in special development zones and free zones such as the DIFC. The practical limit is that the RERA rent index holds thinner comparable data for specialized commercial stock.

Is there VAT on commercial rent in Dubai?

Yes, at the standard 5% rate. The VAT exemption applies to qualifying residential leases, so offices, shops, warehouses and other non-residential premises are standard-rated. A VAT-registered tenant will usually recover the input tax, making it a cash flow cost; a tenant that is not registered absorbs it. Confirm before signing whether a quoted rent is inclusive or exclusive of VAT.

Can my landlord evict me for leaving my shop closed?

Potentially, yes. Article 25(1)(d) allows eviction before the lease expires where business premises are left unoccupied without a valid reason for 30 consecutive days or 90 non-consecutive days in a year. There is no residential equivalent to this ground. The exception turns on whether the reason is valid, so a documented refurbishment, regulatory suspension or supply interruption should be recorded contemporaneously.

Who owns the fit-out at the end of a commercial lease in Dubai?

On the statutory default, the landlord does. Article 23 provides that the tenant may not remove leasehold improvements they have made, unless otherwise agreed, and Article 19 requires the landlord’s written consent and official licences before the tenant makes any alteration at all. Because “unless otherwise agreed” is the operative phrase, fit-out ownership and reinstatement obligations are among the most important clauses to negotiate.

Do I need Ejari for a commercial lease?

Yes. Article 4 requires all lease contracts to be registered with RERA, and for a commercial tenant registration carries a second consequence: the economic department requires a registered lease for the address on your trade licence, so a lapsed Ejari can block a licence issue or renewal, and with it the visas attached to the establishment. The Dubai Land Department’s published fee is AED 177.75 online or AED 220 at a trustee centre.

How much notice does a landlord need to increase commercial rent?

At least 90 days before the lease expires. Article 14, as replaced by Law No. 33 of 2008, requires a party wishing to amend any term of the contract to notify the other no less than ninety days before expiry, unless they agree otherwise. If neither party gives notice and the tenant stays on, Article 6 renews the contract on the same terms for the same period or one year, whichever is shorter.

Can I sublet part of my office to another company?

Not without the landlord’s written consent. Article 24 prohibits assigning use or subletting to third parties without it, and unauthorized subletting is a ground for eviction before the lease expires under Article 25(1). Article 8 adds that a sub-lease expires when the head lease term ends unless the landlord expressly agrees otherwise, which is the point to check when buying a business that occupies under a sub-lease.

How long must a landlord wait before re-letting commercial premises after evicting me?

Three years, where the eviction was for the owner’s personal use or that of a first-degree relative. Article 26 sets a two-year bar for residential property and a three-year bar for non-residential property, running from the date the landlord retook possession, and a tenant may claim compensation where the bar is broken. Checking the unit’s status a year or two later is cheap and worthwhile.

What does it cost to file a commercial rental dispute in Dubai?

The Rental Disputes Center charges 3.5% of the annual rent, subject to a minimum of AED 500 and a maximum of AED 20,000, with half refunded if the case settles. Because of that cap, any tenancy above roughly AED 571,000 a year pays the same maximum fee, which makes litigation proportionately cheaper for a large commercial tenancy than for a residential one.

Official Sources

Information is current as of August 2026. Every article number and rule above was read from the English texts of Law No. 26 of 2007, Law No. 33 of 2008 and Decree No. 43 of 2013 as published on the Dubai Legislation portal, and the Ejari and Rental Disputes Center figures come from the Dubai Land Department’s own published service information. Three limitations are stated rather than smoothed over. Where Law No. 33 of 2008 replaced an article of the 2007 law, the amended text governs, and the articles it replaced are 2, 3, 4, 9, 13, 14, 15, 25, 26, 29 and 36; guidance that quotes the original 2007 wording of any of those is out of date. The 5% VAT treatment of commercial rent comes from the VAT legislation rather than the tenancy law, and your own position depends on your registration status and the nature of your supplies, so confirm it with the Federal Tax Authority or a registered tax agent. And free zone authorities, master developers and mall operators impose their own leasing, fit-out and signage rules on top of the emirate-level law, so a lease inside a free zone or a managed retail scheme will carry obligations this guide does not describe. This is general information, not legal advice.