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The UAE is a booming market for investment. Whether you’re planning to be there short or long-term, there’s a ton of ways to grow your wealth. With a highly favorable tax environment and no restrictions on the repatriation of profits, it’s an ideal place to invest. So why let your money gather dust in the bank? Below we’ve outlined the best ways to invest your money as an expat in the UAE, with some specific tips about what’s on offer.
The UAE has three stock exchanges you can invest in: the Dubai Financial Market (DFM), the Abu Dhabi Securities Exchange (ADX), and Nasdaq Dubai. By international standards these are relatively small exchanges – but that also means they have a ton of room for growth.
Lately they’ve been on the rise. Dubai IPOs have raised over $9.4 billion over the past three years and the DFM’s general index performed fifth-best globally in 2023, picking up 230,000 new investors in the process. In other words, it’s active and growing. That’s not surprising given the UAE’s rise as a global financial and investment hub.
Picking stocks can be time consuming. It also carries risk. To make things easier, you can invest in the iShares MSCI UAE ETF. That’s an ETF that gives you broad exposure to listed UAE companies, so you can profit from the market’s overall growth.
Read more about: How Muslim investors can choose the right ETFs.
Unlike stocks, buying bonds offers a more predictable return. With treasury bonds you’re lending the government money and being paid back with a fee, called a coupon payment. This typically allows you to earn more money than on a traditional savings deposit. Plus they’re relatively low risk since they’re backed by the UAE government.
One such option is UAE National Bonds, a scheme that is 50 percent owned by the government of Dubai. In 2023, residents that invested in National Bonds earned up to 5.8 percent returns.
UAE National Bonds are also sharia-compliant, with a dedicated advisory board overseeing investments.
Need a crash course on bonds? Learn how to assess returns on debt-based investments.
Gold is famously a great hedge against inflation. People tend to buy up the commodity in bad market conditions, so its price rises during bear markets. That can add protection and diversification to your investments. And if you want to buy physical gold, there aren’t many locations better than Dubai’s famous gold souk. The prices are tied to international rates, but because the market is tax-free, you’ll get a bit of a break.
Don’t want to risk stashing your bullion at home? The UAE offers world-class vaulting options, like at the Dubai Multi Commodities Centre, where they’ve built what has been dubbed “the most secure vault in the Middle East”.
Similar to gold, buying property is generally a solid store of investment. And if prices in the UAE keep rising, you can make serious returns. Property prices in Dubai and Abu Dhabi have jumped about 15 percent since 2021. Some analysts see prices rising up to 10 percent in 2024.
As an expat, you can purchase real estate in specific locations called freehold zones. With real estate investment, the value is all about location. The key questions you should ask: how accessible is the property to the rest of the city? What are the area’s future development plans? What’s rental demand like currently?
If you don’t want to buy actual property, you can purchase a Real Estate Investment Trust (REIT). REITs are bought and sold like stocks. You’ll be getting access to income streams generated by pools of properties. You’ll earn money on both the appreciation of the REIT and a dividend payment.
Pro tip: the largest listed shariah-compliant REIT is the Emirates REIT.
If you’re an expat setting up a company, the UAE has more than 40 free zones that come with excellent perks. They offer 100 percent foreign ownership, streamlined procedures, access to top flight facilities, and tax breaks. You’ll get exemptions from customs and easy access to global markets.
Many of them are industry-specific – like the Dubai International Finance Centre (DIFC), the Dubai Multi Commodities Centre (DMCC), or Dubai Media City. They have tailored services to match your needs and are great for networking and collaboration.
You can explore all of the Free Zones here.
Large would-be investors can take advantage of the UAE’s Golden Visa. This offers a long-term residency (renewable every five or ten years) without a sponsor in exchange for investment. To qualify you’ll have to make a public investment of AED 2 million or purchase property of at least AED 2 million. You can read the full rules Here
REITs - Real Estate Investment Trusts
Dubai IPOs raised $9.4bn in the past three years amid continued economic boom
DFM CLOCKS RECORD-BREAKING PERFORMANCE IN 2023
UAE: National Bonds announces highest-ever return on savings in 2023
Shariah Compliant UAE National Bonds
Beyond CPI: Gold as a strategic inflation hedge triangular shaped design
Expatriates buying a property in the UAE
Gold Vault Operators & Vault Locations Dubai
Disclamer:
This post is for educational purposes only, and the Firm does not directly or indirectly provide these services.
