Ajman Enacts Law No. 1 of 2025 on Real Estate Contributions
Real Estate / UAE
The Law marks a shift towards stronger regulatory oversight of off-plan investment structures. It introduces mandatory licensing, project registration, escrow protections and disclosure obligations.
Law Update: Issue 379 – Saudi Arabia
Mohammed KawasmiPartner,Real Estate
Khaled AlzahraniTrainee Solicitor,Corporate Commercial
On 14 April 2025, the Emirate of Ajman published Law No. 1 of 2025 concerning the regulation of real estate contributions (the “Law”) in Official Gazette Issue No. 3. The Law introduces a legislative framework for contribution-based real estate investment, which represents a significant milestone for Ajman and, would indeed serve as a solid precedent for the wider Emirates. The contributions operate under a structure that allows multiple investors to collectively participate in property development with the aim of generating profit. The Law applies to projects involving vacant land, buildings under construction, or properties to be rebuilt through real estate contribution arrangements.
The Law marks a shift towards stronger regulatory oversight of off-plan investment structures. It introduces mandatory licensing, project registration, escrow protections and disclosure obligations. Its enactment marks a pivotal advancement in Ajman’s real estate regulatory framework and could serve as a model for future legislative initiatives across the Emirates.
Real estate contribution is a newly introduced investment model in the UAE, established for the first time under the Law. It differs from traditional off-plan sales, where individual units are sold to end-users during the construction phase.
Contribution projects instead involve collective investment into a real estate development through defined shareholding structures, overseen by a licensed trustee and subject to comprehensive regulatory oversight. While off-plan transactions have long been regulated in other Emirates, the Law represents the UAE’s first statutory framework dedicated to real estate contribution projects. Its enactment addresses prior gaps in enforcement and transparency and introduces a distinct model tailored to collective real estate investment.
Law No. 1 of 2025 addresses these concerns by introducing mechanisms familiar to those operating across the region. In doing so, it creates a more predictable and therefore stable legal environment for developers and investors with interests in multiple jurisdictions.
Scope and Definition
The Law applies to real estate contribution projects involving collective investment in real estate, where participants acquire shares in a project with the expectation of profit. This includes both public offerings and private arrangements. The Law covers contributions related to undeveloped land, incomplete buildings, and properties undergoing reconstruction.
Developer Licensing
Entities engaging in real estate contribution activity must obtain initial approval from the Department of Municipality and Planning in Ajman (the “Department”) and be licensed by the Department of Economic Development in Ajman. The appointed trustee of the contribution must be a licensed real estate office, responsible for managing the project. The Department retains oversight and supervises compliance.
Project Registration
Real estate contribution projects must be registered with the Department prior to launch. Registration requires the submission of ownership documents, written consent from the property owner, appointment of a financial auditor, and clear share structuring. The trustee must also contribute at least 15% of the shareholding and ensure the project has a compliant escrow account.
Escrow Obligations
All shareholder contributions must be deposited into a dedicated escrow account held with an authorised financial institution. The account is opened in the name of the real estate contribution project under an agreement approved by the Department. Withdrawals may only be made with Department approval and in line with the certified construction progress. Trustees are prohibited from collecting funds outside the escrow mechanism.
Marketing and Disclosure
No marketing or promotional material may be issued without the prior written approval of the Department. All materials must include accurate and complete information regarding the location and description of the property, the value per unit, trustee details, project timeline and the number and value of shares offered. Non-compliant marketing may lead to administrative sanctions or project suspension.
Investor Rights
Upon full payment, investors are entitled to receive a certificate evidencing their ownership of shares in the contribution project. They also have the right to access relevant project documentation and may transfer their shares in accordance with the procedures established by the Department. In the event of project cancellation or non-completion, the Department will oversee the return of funds held in the escrow account to the investors.
Regulatory Supervision and Enforcement
The Department is granted broad powers to inspect, investigate, and enforce compliance with the Law. These powers include the authority to freeze escrow accounts, suspend project approvals, impose administrative fines, and, where necessary, initiate legal proceedings. Notably, a formal grievance mechanism is available, enabling affected parties to appeal decisions issued by the Department. These supervisory tools are designed to enhance accountability and ensure sustained compliance throughout the project lifecycle.
The enactment of Ajman Law No. 1 of 2025 marks the first comprehensive legislative framework in the UAE dedicated exclusively to regulating real estate contribution projects. While it draws conceptually on elements familiar from off-plan regulation in other Emirates, such as escrow protections and licensing controls, this Law is unique in its express treatment of contribution-based investment structures. For developers operating regionally, it introduces a new model that may influence future regulations elsewhere in the UAE and provides a clear foundation for structured contribution offerings within Ajman.
From an investor perspective, the Law represents a step towards regulatory maturity, particularly through its formal recognition and structuring of contribution-based investment. While escrow account arrangements are not new to Ajman and have been previously implemented for off-plan sales, the Law introduces a dedicated framework specific to contribution projects, coupled with direct oversight by the Department. This distinguishes it from models seen in the other Emirates, such as tokenized real estate investment in Dubai, which is subject to separate licensing regimes, including the Virtual Assets Regulatory Authority. By centralizing regulatory responsibility within the Department, the Law enhances clarity and creates a defined channel for investor engagement in contribution projects within the Emirate.
Ajman Law No. 1 of 2025 establishes a clear statutory foundation for contribution-based real estate projects, setting a legislative benchmark both within the Emirate and across the UAE. As the first law of its kind in the country, it formalizes previously unregulated practices and introduces defined obligations around licensing, registration, fund management and investor protection.
The framework is expected to improve governance standards, reduce transactional risk and provide developers and investors with greater legal clarity. For market participants, the Law presents both a compliance requirement and a strategic opportunity to engage with Ajman’s real estate sector in a more structured and transparent environment.
Our firm advises clients across the UAE on all aspects of real estate development and regulatory compliance, including contribution-based schemes, escrow structuring, licensing and project registration. We are well placed to assist stakeholders in understanding the impact of this Law and in taking the necessary steps to meet its requirements.
For further information,please contact Mohammed Kawasmi and Khaled Alzahrani.
Published in August 2025
