Commercial contracts use the same DLD template as residential - but with duration, VAT, trade licence, and permitted use differences.
Commercial vs residential differences
- Duration: commercial 1-5 years (residential 12 months)
- VAT: 5% applies to commercial (residential exempt)
- Trade licence must match property permitted use
- Security deposit: no legal cap for commercial
- Notice periods: same 90-day rule
Required documents
- Property title deed
- Landlord's Emirates ID / trade licence
- Tenant's trade licence matching property use
- Authorised signatory Emirates ID
- Signatory Power of Attorney
- Company stamp for each page
- Recent DEWA bill
Trade licence matching (critical)
Trade licence business activity must match property's DLD-registered permitted use:
- Retail licence -> property zoned retail
- Office licence -> zoned office
- Restaurant licence -> zoned F&B
- Warehouse licence -> zoned industrial
- Mismatch = Ejari rejection
Step-by-step
1
Generate at tenancycontract.com
Select 'commercial' in usage dropdown.
2
Set duration
1-5 years. Longer requires notary registration.
3
Enter rent with VAT clarity
Specify inclusive or exclusive of 5% VAT.
4
Additional Terms for commercial
Fit-out permissions, subletting, signage rights, business hours, common area access.
5
Both parties sign
Company: authorised signatory + company stamp.
6
Ejari registration
Same process, same AED 220.
VAT on commercial rent
- 5% VAT applies (Federal Tax Authority)
- Landlord issues VAT-inclusive invoice
- VAT-registered tenants can reclaim
- Residential rent VAT-exempt
- Mixed-use: only commercial portion taxed
Special commercial clauses
- Fit-out period (30-90 days rent-free typically)
- Rent escalation for multi-year leases
- Renewal option at market rate
- Exclusivity clause
- Termination for cause (breach, license loss)
- Handover condition (bare shell / shell + core / fitted)
For residential, see create complete guide.