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Global (عربي)
The United Arab Emirates (UAE) has rapidly emerged as a global investment destination, attracting investors from worldwide due to its aggressive economy and strategic initiatives.
In 2023, the UAE observed a remarkable increase of about 4,500 high-net-worth individuals, which attracted many investors as a prime destination for wealth and investment.
Due to this boost, it receives substantial foreign direct investment (FDI) inflows, which have reached an impressive USD 30.6 billion in 2023 compared to USD 22.7 billion in 2022, putting the UAE second globally in FDI inflows.
Furthermore, the UAE's strategic location, along with its strong infrastructure and socio-political stability, provides it an advantage and creates an ideal arch for investors to enter the Middle Eastern and global markets.
In this blog, you will learn about the importance of high returns in Investment strategy and also provide details on top Investment platforms who give high returns in UAE.
Read more about: Why the UAE is the Top of GCC’s FDI (Foreign Direct Investment) ?
1- Expand Wealth Accumulation:
The rate at which investors want to grow their wealth is directly influenced by the high returns, which is the primary objective of any investment strategy.
Achieving higher returns allows investors to accumulate wealth more quickly, encouraging the investors to achieve financial goals such as; purchasing property, funding education or securing retirement.
2- Inflation Compensation
Over the years, inflation has eroded the purchasing power of money, making it essential for investments to provide returns that surpass the inflation rates.
Investors always ensure that they target investment strategies that give them higher returns for growth, not only conserve but also increase their real value of wealth, effectively competing with the decreasing impact of inflation on their savings.
3- Balancing Risk and Reward
Investors always acknowledge that higher returns are always associated with the rise of risk.
They should also assess their risk tolerance and investment perspective to affect a balance between them and align it with their financial objectives.
In high return investments, require professional guidance, and very careful analysis and can increase wealth accumulation.
Read more about: Short-Term vs. Long-Term Investment Strategies
There are many investment platforms in the United Arab Emirates (UAE), but some have distinguished themselves by offering high-return opportunities adjusted to diverse investor needs.
Below are some of the platforms explored in depth, highlighting their unique features, benefits and potential risks.
It is a Shariah-compliant peer-to-peer (P2P) crowdfunding and lending platform that connects Small and Medium Enterprises (SMEs) in need of funds and investors that want remunerative returns.
As the platform follows the principles of Islamic Finance, it ensures that all Investment opportunities are free from Interest and excessive uncertainty.
- Expected Return on Investment (ROI): The returns are truly based on the risk profile of the SMEs, if the investors want a high return they will invest in high-risk SME projects.
- Minimum Investment: This platform is suitable for both beginner and experienced investors because it is easily accessible and has been designed to get started with a small amount of capital.
- Risk Level: This platform thoroughly evaluates the creditworthiness of SMEs to protect investors from default risk. As investments are fundamentally risky, investors are encouraged to diversify their portfolios to mitigate any form of risk.
Read more about: How Does Funding Souq Platform Work?
It is a robo-advisory platform that customizes diverse portfolios to meet individual risk and financial objectives. It influences the technology to provide automated investing solutions, making wealth management more accessible and simple.
- Benefits for Beginners: This platform has a very simplified investment process, user-friendly interface and educational resources giving a chance for newcomers to start their investment journey with confidence.
- Benefits for Experienced Investors: This platform offers a range of alternative portfolios and advanced tools for expert investors. The investors will also access to global markets and asset classes which allow more advanced investment strategies.
It is motorized brokerage platform that optimizes asset granting and continuously enhances depository to maximize returns according to their financial goals. It covers various goals from building money to pension plan.
- Unique Features: This platform offers a special kind of cash management solution, StashAway Simple ™, with competitive returns and liquidity. It also provides topical portfolios, which enable investors to take advantage of emerging global trends and industries.
- Ease of Use: The StashAway platform always ensures that the interface should be user friendly as it provides frictionless account setup, a built-in interface and thorough customer support.
This platform constantly aligns its investments with Islamic principles while promoting socially responsible and impact-driven projects. It also specializes in ethics and Shariah complaint Investment opportunities, with a primary focus on real estate and SME projects.
- Key Features: It is designed specifically for those investors who want to contribute to society's improvement while also focusing on financial returns. It provides investors with a variety of projects, including affordable home construction and community-focused initiatives.
- Investment Opportunities: The investors have several alternatives, such as; they are allow for portfolio diversification that is aligned with their financial goals and can participate in projects with different durations and estimated returns.
Beehive is also a Peer to Peer (P2P) lending platform in which the investors can connect directly with SMEs seeking capital and as a result, it will facilitate business growth while the investors potentially yield high returns.
- Expected Returns: The investors have a big opportunity to earn an attractive return while the rates will vary and are based on the creditworthiness of each business.
- Risk Factors: Beehive engages in a highly strict credit screening process for the business but investing in SMEs carries intrinsic risks, including the threat of default. To mitigate the potential losses, the investors are recommended to diversify their portfolios and do a thorough analysis.
It provides traditional wealth management services as well as personalized investing strategies to assist high-net-worth individuals in achieving their financial objectives.
- High Return Investment Options: The investors will have access o a broad scale of investment approaches including equities, fixed income, real estate and alternative assets. Now the investors have to align their risk forbearance and return expectations.
- Personalized Services: Some financial advisors are dedicated to delivering unique solutions, they constantly ensure that the investment portfolios are optimized and matched with their investor's long-term financial goals.
The Abu Dhabi Global Market (ADGM) is a leading worldwide financial hub, which offers a variety of investment funds that respond to investor preferences.
- Diverse Fund Offerings: This investment fund is surrounded by a diverse variety of asset classes, including private equity, venture capital, hedge funds and real estate providing investors with several opportunities to earn potentially high returns.
- Regulatory Environment: They built trust among global investors by providing a vigorous regulatory system that assures transparency and investor protection.
Read more about: Top Licensed Crowdfunding Platforms Reviews in UAE
Both types of investors have access to various platforms that provide varying opportunities for high returns. Below is a detailed analysis of the two prominent platforms.
Yielder is the first Islamic finance-friendly fintech company regulated by the Financial Conduct Authority (FCA) in the United Kingdom.
It operates as a crowdfunding platform and has gained attention for its Shariah-compliant investing opportunities.
- Investment Model: It allows investors to generate rental income by offering pre-funded property investments. This strategy mitigates the uncertainties associated with free periods, resulting in a more predictable income stream.
- Accessibility: You may begin with a very minimal investment as low as 100 pounds since they transform the property investment, making it accessible to a wider audience. This low entry point allows the investors to diversify their portfolios without significant capital spending.
- Ethical Investment: As the company follows Islamic finance principles, the regulator always assures that all investments are free from interest and excessive uncertainty. Due to this ethical perspective, investors are attracted to socially responsible investing opportunities.
- Investor Benefits: The investor receives alot of benefits in the form of monthly rental income and a share of the property appreciation upon sale. This platform provides a hassle-free investment experience by managing all aspects of property maintenance and tenant relations for investors.
Liwwa is a financial startup with a significant presence in Jordan. It was initially operated as a peer-to-peer (P2P) lending model. Due to strategic adjustments, they have refocused their activities and now provide financing solutions to small and medium-sized enterprises (SMEs) throughout the Middle East.
- Financing Solutions: It provides a variety of financial products that have been tailored to the needs of SMEs including Murabaha (asset financing), Working capital loans and point-of-sales financing. These products are meant to support business growth without the need for collateral.
- Operational Shift: The firm has made a strategic decision and now discontinued its retail investor platform, which is a peer-to-peer model and shifted its operations to institutional funding sources to better support its SME clients.
- Impact and Reach: Since its creation, Liwwa has been committed to supporting underprivileged businesses and emphasizing its position as a catalyst for growth. They have facilitated large-scale funding to SMEs, contributing to job creation and economic development.
1. What is the average ROI for high-return platforms in the UAE?
The average ROI for high-return platforms in the UAE depends on the investment type and the related risks. For instance, Shariah-compliant P2P lending services such as Funding Souq aim for net returns of approximately 15% per annum.
2. How do I choose the right investment platform for my goals?
If you want to select the right investment platform that meets your financial goals then you should consider some factors like investment options, fees,
accessibility, customer support, research resources, regulatory compliance, track record and suitability for best trading to ensure they meet your specific requirements.
3. Can expats invest in UAE-based platforms?
Yes, Expatriates may invest in UAE-based platforms because many of them are available for both residents and non-residents and provide opportunities across a wide range of asset classes.
However, it's important to examine each platform's specific eligibility requirement and always ensure compliance with local regulations.
Read more about: Top Investment Opportunities For UAE Expats
4. What is the minimum investment amount for these platforms?
The minimum investment amount is different among various platforms. For example; Funding Souq is accessible to a broader range of investors and provides investment opportunities with a minimal investment barrier.
5. Are there tax benefits for investing in the UAE?
Yes, the UAE provides a tax-free environment for personal income, which means that individuals do not pay any kind of taxes on investment returns.
These beneficial tax structures, enhance net returns for investors. However, expatriates should consult with their tax advisors in their home countries to understand any tax obligation.
Read more about: SMEs Tax incentives in The UAE
6. How do Shariah-compliant platforms ensure ethical investing?
Many platforms often have Shariah Supervisory Boards that oversee and certify the compliance of their financial products.
These platforms always follow Islamic financial principles by avoiding investing in prohibited industries and ensuring that transactions are free from interest (riba) and excessive uncertainty (gharar).
Read more about: What Are The Available Riba-Free Loans in The UAE?
7. What regulations govern these investment platforms in the UAE?
In UAE the regulatory agencies which are the Securities and Commodities Authority (SCA) and the Dubai Financial Services Authority (DFSA) are in charge of observing these investment platforms. These regulated entities established the guidelines to assure transparency, investor protection and financial market integrity.
8. Is my investment protected?
There are regulatory companies that supervise the investment platforms and the protection of your investment is determined by the platform and the nature of the investment.
The investor should always review the platform terms and conditions, understand the related risk and assess if the firm offers any guarantees or protection schemes in that company.
9. Can I withdraw my investment at any time?
Different platforms have different withdrawal processes and investment types. Many new investors make a mistake investing in platforms that have fixed terms and whenever they withdraw their investment they may incur penalties. So before investing in any platform, it is important to understand the withdrawal procedures and any fees before committing funds.
10. Are there any fees associated with using these platforms?
Yes, these platforms charge fees which is associated with investing. These fees may include management, transaction and performance fees. Different platforms have different fee structures which might affect net returns. The investor should always review and compare fee charges to make informed decisions.
11. How can I assess the credibility of an investment platform?
The investor should do thorough research and get assistance in identifying reputable platforms. If an investor wants to assess the credibility of an investing platform, consider some factors for evaluation such as; track record, registration with the regulatory, and transparency of operations, user testimonials and the availability of a strong customer support system.
12. What are the risks associated with investing in these platforms?
The risks may vary according to the investment amount. If the investor wants a high return then they will face high risk and vice versa.
The risk associated with high-return platforms includes potential loss of capital, liquidity constraints and market volatility. In Shariah's complaint P2P lending platforms, provide potentially high returns but it comes with the risks of borrower default.
13. What is P2P lending, and how does it work?
It is a type of financing that allows investors to lend money directly to SME borrowers generally through an online platform, by eradicating the need for traditional financial institutions. Mostly the investors earn from borrowers through interest payments while the borrower obtains access to funds at a competitive rate.
References:
https://www.state.gov/reports/2024-investment-climate-statements/united-arab-emirates/?utm
https://u.ae/en/information-and-services/finance-and-investment/foreign-direct-investment?utm
https://www.moec.gov.ae/en/promising-sectors?utm
https://u.ae/en/information-and-services/business/the-uae-an-ideal-investment-destination?utm
https://www.investopedia.com/turning-usd5-000-investment-into-usd1-million-8782935?utm
https://ethis.co/blog/shariah-compliant-p2p-lending-risks-rewards/?utm
https://www.stashaway.ae/r/best-investment-plans-uae
https://europe.republic.com/yielders?utm_source
https://www.yielders.co.uk/?utm
https://liwwa.com/about/blog/closing-our-investor-platform?utm
https://www.fmo.nl/project-detail/55233?utm
Disclamer:
This post is for educational purposes only, and does not constitute investment advice or a solicitation to take any financial action. It should not be relied upon when making investment or financing decisions.
