Settling in UAE? Here are some investment options that you can consider after moving in

Moving to a new country comes with certain challenges. It changes many things; planning investment afresh is one of them. If you have lately moved to UAE and thinking to start investing here, then you are reading the right piece.

Foreigners and non-resident expatriates can choose from a variety of investment opportunities in the area. Additionally, the law offers strong protection for UAE investments. Here we are telling you about multiple instruments of investment in UAE.

Why you should invest in UAE?

The United Arab Emirates’ business-friendly legal, regulatory, and financial climate makes investing easy and advantageous. The UAE is a stable and welcoming global hub for investors because it has one of the most liberal economies in the world and a culture of international trade.

Investment in the UAE is on the rise, with a growing number of asset classes that expats can choose to build wealth on. From stock market trading and real estate purchases, to private retirement plans, funds and custodial accounts, there are investment options to suit almost any risk profile.

There are many reasons to invest in the United Arab Emirates. Oil and gas can still flow in abundance from its deserts, however, the local economy has never been more open to business. The United Arab Emirates is also one of the easiest places to do business in the world. Applying for a local business license to do business locally or internationally is quick and easy, and some structures can be set up with 100% foreign ownership.

Foreigners and non-residents can start trading on the UAE Stock Exchange with minimal paperwork, while many foreign investors are reaping the rewards and benefits of the real estate market. Vibrant real estate of the country. Private retirement plans, mutual funds, and other asset classes are also popular investment options here.

Perhaps the deciding factor for many investors is the fact that the UAE is an oasis of economic, financial and political peace. The government’s ambitious development goals for the country provide certainty for investors and the market. As a result, many foreigners and non-residents feel comfortable investing there.

Here are the options for investment in UAE:

Savings account

Local banks cater to UAE expats very well and offer a wide variety of savings and deposit accounts (regular and Shariah-compliant), some with really attractive rates of return.

Banks like Abu Dhabi Islamic Bank (ADIB) pays profit to account holders quarterly, while First Abu Dhabi Bank offers 4% annual return on minimum balance 10,000 AED. Emirates NBD’s Muradaba account offers returns up to 1.35% on a minimum balance of AED 5,000; The Mashreq Setup Savings Account offers interest rate up to 6% on a minimum balance of AED 10,000.

Investment funds

An investment fund is a fraction of the capital contributed by various investors to collectively buy assets, while each investor retains ownership and control of his or her shares. Additionally, compared to investing alone, an investment fund provides a greater range of investment choices, superior management skills, and reduced investment fees. Foreign investors and expatriates in the UAE have access to mutual funds and equity funds as types of investment funds. HSBC, Citibank, Emirates NBD and First Abu Dhabi Bank offer wealth management products including mutual funds.

Equity market in UAE

Investing in the UAE stock market is very simple. Individuals must open a trading account with a broker registered with the Dubai or Abu Dhabi stock exchanges (there are three stock exchanges in the UAE: Dubai Financial Market (DFM), Exchange Abu Dhabi Stock Exchange (ADX) and NASDAQ Dubai). Investors must also have an investor number (available directly from the exchange’s investor service office) to trade on DFM and ADX.

As with any stock trade, take a close look at the company, industry, economic indicators, and market fundamentals. Consider hiring a fund manager. And, perhaps most importantly, know your risk appetite before you dive in.

Invest in Business in UAE

Foreigners and non-residents can form a 100% Emirati company in a free zone (i.e. no local partnership required). This is a designated area where there are no taxes or restrictions on business, employment, or trade, just like the mainland. Free zone companies in the United Arab Emirates are generally easier to incorporate and obtain permits. Foreigners can also establish a domestic company. This company requires a UAE citizen to own his 51% of the shares, so the cost of setting up and operating a domestic company in the UAE is usually high.

Foreign investors should contact the Department of Economic Development (DED) of the emirate in which they plan to incorporate their business (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, Fujairah). The DED gives the initial license to do business and can register a trade name.

How much you need pay tax on investment?

You will not be subjected to a personal income tax in the UAE. There is no capital gains tax on an individual’s transfer of real estate or securities. Rental income is taxed 5%, except in Abu Dhabi, where there is no city tax on rental space, however, the landlord must pay a license fee.

What you need to keep in mind?

Expats in the UAE have many alternatives for investing their hard-earned money. Consider doing some research and even hiring a financial advisor or consultant who can evaluate your existing financial status. This covers elements like your timing and ambitions. You can choose the best options for your portfolio in this manner.

Keep in mind that investing in the UAE may differ from your previous experiences. Set reasonable expectations and objectives. Do your research and learn about the market.

Consider the following points before investing:

  • What options are there for foreigners or foreign residents to invest in?
  • How consistent are the UAE’s laws on foreign investment?
  • What types of protection are afforded to foreign investors in the UAE?
  • Are there any incentives (such loans or grants) to entice foreign investment?
  • How may the UAE economy be impacted by regional geopolitics?
  • Politics in the nation are they stable? Is the exchange rate steady?
  • What stage of development is the banking and financial system in?
  • After finding the answers of above questions and doing your homework, interact with locals who can provide objective, factual advice.

Read more: New Labour Laws of UAE, Have a look at new changes

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