By Ben Norton
UAE has been carefully constructed to facilitate international investment with open arms. From their globally minded legal system to a top-class banking regime, you won’t find anywhere to put your money that makes it more straightforward.
A constantly expanding range of assets is made available on the trading market for private investors to access that fit anybody’s affinity for risk and reward. The Gulf receives well over USD 10 billion from foreign direct investment every year as a result of its welcoming structure and prosperous history.
World Bank data on the UAE economy.
Best Investment Opportunities
Property
Two decades ago UAE offered a boom and bust market providing investors with the opportunity to make fast money while bearing high risk. This has all changed, however, as the government managed to stabilise the sector by issuing new retirement and investment visas that encouraged housing and apartment sales in 2018. Previously ex-pats could only buy a 99-year lease on property.
Despite the current ease of entry, we would suggest using an agent or a lawyer to navigate the legalities of the purchasing process. There are some tricky details to get right such as drafting agreements, transfer of ownership documents, the actual payment and communication with necessary government departments.
UAE governmental advice on buying property.
Business Investments
There are two main ways to set up a business in the UAE. You can either form a business in one of the free zones or register onshore. We would suggest the former as it allows for 100% ownership and the steps to completion are far more straightforward.
The usual employment, tax and trade laws do not apply in free areas such as Ras Al Khaimah Economic Zone. On-shore start-ups require 51% ownership from a UAE citizen, a far longer application process and greater recurring costs over time.
Ministry of Economy advice on setting up a business.
Stocks and Shares
As international stock trading goes, UAE is a no-brainer.
First, get registered with one of the exchange platforms (Dubai Financial Market, Abu Dhabi Securities Exchange or NASDAQ Dubai). You will also have to get an Investor Number from the Investor Services Desk to trade on DFM and ADX. Here the opportunities are endless, with a wide range of sectors, start-ups and securities for you to choose from.
With little knowledge of the local climate, you may want to consider putting your money into a fund. Here investors are able to collectively purchase assets, often through the leadership of a fund management team. This approach allows for a great amount of diversity with lower average costs from fees. Have a look at HSBC, First Abu Dhabi Bank or Sarwa to find the asset management products that fit your needs.
Our 2 Cents
Now is the time to invest in the UAE. With a stable economy that is less and less dependent on oil and gas, the Emirates are a clear world leader when it comes to global trade. The new CEPA agreement with India will further boost their GDP while opening an exciting bilateral avenue for international investors to access. Similar open trade deals will follow suit in coming years and we suggest getting ahead of the game.
Here’s a great synopsis for anyone in search of more information.
