This helpful guide provides all the essential information you need when considering making an investment in the United Arab Emirates.
Expats and non-resident foreigners also have an array of investment options in the region at their fingertips. Furthermore, the law offers good protection for investments in the UAE. This helpful guide provides all the essential information you need when considering investing in the United Arab Emirates.
Investing in the United Arab Emirates is straightforward, and is encouraged by a business-friendly legal, regulatory, and financial environment. As one of the world’s freest economies with a globally-minded business culture, the UAE is a stable, investor-friendly global hub. In 2018, the Gulf’s second-largest economy received US$10.3 billion in foreign direct investment (FDI); mainly in trading activities, real estate, finance, insurance, and manufacturing.
Investment in the UAE is growing, with an expanding range of asset classes for expats to choose from to build wealth. From stock exchange trading to real estate purchase, private pension schemes, funds, and deposit accounts, there are investing options to suit pretty much any risk profile. And it isn’t only in wheeler-dealing Dubai where it all happens; Abu Dhabi, Ras Al Khaimah, and Sharjah are also at the investment party.
Investing in the United Arab Emirates is attractive for many reasons. Oil and gas may still flow copiously from her deserts, however, the local economy has never been more open for business. It’s in decent shape, too; the International Monetary Fund (IMF) sees gross domestic product (GDP) growing by 3.7% in 2019 (it was 2.9% in 2018). The central bank, meanwhile, forecasts a non-oil growth of 3.4% in 2019 (compared to 2.6% in 2018).
The investment climate in the UAE
The UAE investment climate is viewed positively. Heritage Foundation, a US think tank, says the country’s broad-based economic expansion is the result of “efforts to strengthen the business climate and foster the emergence of a more diverse private sector.” It notes, in particular, the strong rule of law – a key criterion for those investing in the United Arab Emirates.
The UAE is also one of the world’s easiest places in which to do business. Getting a license to set up a local business to trade locally or internationally is quick and simple, and some structures can be set up with 100% foreign ownership. Expats and non-residents can start trading on the UAE Stock Exchange with minimal paperwork, while many foreign investors reap the benefits, and profits, of the country’s vibrant real estate market. Private pension schemes, mutual funds, and other asset classes are also popular investing options there.
Perhaps the clincher for many investors is the fact that the UAE is an oasis of economic, financial, and political calm. The government’s ambitious development goals for the country offer a degree of certainty for investors and markets. As a result, many expats and non-residents are comfortable about investing there.
Savings account investments in the UAE
Local banks serve UAE expats well and offer a range of (conventional and sharia-compliant) savings and deposit accounts, some with really attractive rates of return.
Abu Dhabi Islamic Bank (ADIB), for example, pays profits (the sharia equivalent of interest) quarterly to account holders, while First Abu Dhabi Bank offers a 4% annual return on a minimum balance of AED 10,000. Emirates NBD’s Muradaba account offers up to 1.35% return on a minimum balance of AED 5,000; the Mashreq Set Up Saver Account (interest up to 6%) requires a minimum balance of AED 10,000, and RAK Bank’s Fast Saver Account offers up to 2%.
UAE banks also offer a range of Islamic and non-Islamic deposit accounts. Commercial Bank of Dubai’s Step Up Deposit Account offers a 4% annual return on a minimum AED 10,000 deposit. National Bonds offer an expected annual profit rate of 2.5%, with profit paid quarterly, on a minimum investment of AED 100,000. RAKBANK’s Fixed Deposit Plus account provides a maximum of 3.25% on a 36-month deposit.
Yalla Compare is a useful online resource detailing features, eligibility criteria, profit rates, bank charges, and opening procedures for UAE savings and deposit accounts. It is a good idea to shop around for a product that best suits your circ*mstances and investment goals.
Pension investments in the UAE
A March 2019 survey by Friends Provident International and YouGov revealed that about one-third of UAE-based expats expect to retire by the age of 55, and just over half by the age of 60. However, just under half of them were actually saving for their retirement.
Currently, expats working in the UAE receive an end-of-service gratuity payment from their employer. This is calculated on their last-drawn basic salary and how many years they have been with the company. However, a new voluntary pension scheme has recently been proposed in the UAE. Under the plan, employees’ end-of-service contributions will be collected from employers, and the sum will be invested on the employee’s behalf. The launch date is still unknown, however, those participating in the scheme will be able to contribute a higher monthly amount if they wish.
Some UAE expats choose to invest in a private pension plan, however. Things to consider if taking the plunge into a private pension plan include:
When you aim to retire;
How much you need to save to retire at that age;
The type of retirement lifestyle you want;
Where you want to retire;
Whether you have major expenses on the horizon;
How inheritance laws might affect retirement plans
Property investment in the UAE
UAE property is a popular asset class that has been on the radar of international investors for almost two decades. Handsome profits have been made, and fingers have been burned in what was, for years, seen as a boom-and-bust, get-rich-quick-if-you-can market.
The roller coaster ride is, mercifully for most investors, no more. Tighter regulations limit property speculation and, as a result, the market is far more stable – and affordable. Real estate consultancy JLL notes that Dubai apartment rental and sale prices fell 11% and 9% respectively in the second quarter of 2019; compared with the same period last year. Villa prices fell 5% and 9% respectively in the same period. In Abu Dhabi, JLL says apartment rents fell 11% year on year in the same period, with prices set to fall further towards the end of this year. Prime villas went for 6% less, and apartments 15% less, in the period.
To further stabilize the country’s property market, in mid-2019 the government launched a retirement visa and issued the so-called ‘Golden Card’ long-term residence permits for investors. New laws on freehold ownership for expats buying apartments, villas, and land in Abu Dhabi (previously expats could only buy property on a 99-year lease) also came into force in 2019.
The investment process in the UAE
The formalities of investing in UAE property are straightforward. That said, they may be different from those the investor is familiar with. It is a good idea to engage a reputable real estate agent, and perhaps a lawyer, to help you navigate the process. They should assist, for example, with drafting agreement terms for the buyer and seller, the signing of a Memorandum of Understanding, payments of fees to developers and relevant government departments, and transfer of ownership documents.
Expats and non-resident foreigners can set up a UAE company with 100% ownership (i.e., no local partner is required) in a free zone. This is a designated area where taxes or restrictions on business, employment, or trade do not apply in the same way they would on the mainland. A UAE free zone company is generally easier to set up and obtain licenses for. Expats can also set up an onshore company. Because this entity needs a UAE citizen to have a 51% share, the costs of setting up (and running) an onshore UAE company are typically higher.
As a foreign investor, you will need to approach the Department of Economic Development (DED) in the emirate (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah) in which you intend to set up the business. The DED will grant initial approval for the business, and you will be able to register the trade name.
Bear in mind that the costs of setting up a business in the UAE depend on the type of entity, activity, and license required. Capital requirements may, for example, vary according to the business type. Check out the UAE Commercial Companies Law for details.
Investment funds in the UAE
According to Investopedia, an investment fund is defined as “a supply of capital belonging to numerous investors used to collectively purchase securities, while each investor retains ownership and control of his own shares.” In addition, an investment fund provides a broader selection of investment opportunities, greater management expertise, and lower investment fees than investors might be able to obtain on their own. Types of investment funds available to foreign investors and expats in the UAE include mutual and equity funds.
HSBC, Citibank, Emirates NBD, and First Abu Dhabi Bank offer asset management products including mutual funds. A new kid on the block is Sarwa, an online financial advisor specializing in exchange-traded funds (ETFs).
Investing in stocks and shares in the UAE
Investing in the United Arab Emirates stock market is straightforward. Individuals must open a trading account with a broker registered with one of the exchanges in Dubai or Abu Dhabi (there are three exchanges in the UAE: Dubai Financial Market (DFM), Abu Dhabi Securities Exchange (ADX), and NASDAQ Dubai). The investor must also obtain an Investor Number (available direct from the Investor Services Desk at the exchanges) to trade on DFM and ADX.
As with any stock trading, do your due diligence on the company, sector, economic indicators, and market fundamentals. Consider engaging a fund manager. And, perhaps most of all, know your risk appetite before you jump in.
Tax on investments in the UAE
There is no personal income tax in the UAE. There is no capital gains tax on the disposal of real estate or securities by an individual. Rental income is taxed at 5% (except in Abu Dhabi, where there is no municipal tax on rented premises, however, landlords must pay license fees).
How to invest wisely in the UAE
UAE expats have a plethora of options for investing their hard-earned salaries and savings. Shop around and maybe hire the services of a financial planner or consultant who can assess your current financial situation. This includes factors such as your objectives and time horizons. This way, you can make optimum decisions for your investment portfolio.
Bear in mind that investing in the UAE may be different from what you are used to. Set your expectations, and goals, accordingly. Do your due diligence, and understand the market.
Factors to consider when investing in the UAE
What investment opportunities are available as a foreigner or resident expat?
How stable are the regulations around foreign investment in the UAE?
What levels of protection do foreign investors receive in the UAE?
Are there any incentives to attract foreign investment (e.g., loans, subsidies)?
How could/does the regional geopolitical situation affect the UAE’s economy?
Is the country politically stable?
Is the currency stable?
How mature is the banking and financial system?
The bottom line is – do your homework! And engage with people on the ground who can give accurate, impartial advice.
Investment advice in the UAE
The first port of call for most foreign investors in the UAE is the government agencies. Dubai FDI helps foreign businesses set up in the city, while the Ras Al Khaimah Investment Authority (RAKIA) offers personalized service and support for entrepreneurs. Down in the capital, it is worth checking out the Abu Dhabi Chamber for business support services.
Expats and non-residents can start trading on the UAE Stock Exchange with minimal paperwork, while many foreign investors reap the benefits, and profits, of the country's vibrant real estate market. Private pension schemes, mutual funds, and other asset classes are also popular investing options there.
UAE is known for its investor-friendly practices. An investment in Dubai attracts no annual property tax, income tax, capital gains tax, rental revenue tax, or Value Added Tax (VAT). This allows an investor to dedicate a much larger financial portfolio to purchasing property and, in turn, get higher returns.
While these are some of the easiest and most profitable investments for foreigners, the list of options to diversify your portfolio is nearly endless. Other valid alternatives include Gold, cryptocurrencies, forex, liquid funds, and fixed and recurring deposits.
Yes, foreign nationals, which includes both expatriate residents and non-resident investors, can purchase property in Dubai on a freehold basis. This allows foreign nationals to buy, sell or lease their property.
One of the most popular investment strategies is investing in stocks and bonds. These are considered relatively safe investments since they are backed by large companies or governments and usually carry low risk.
Minimum deposit of AED 2 million (approximately USD 550,000) into an accredited investment fund in the UAE, with a letter from the fund. Minimum investment capital of AED 2 million (approximately USD 550,000) into a company, with a valid commercial or industrial license.
100 per cent foreign ownership in 122 economic activities across 13 sectors. 100 per cent profit repatriation. An effective visa system allowing for renewable 10-year residence visa. Competitive financing costs, high levels of liquidity and strong banking system.
Emirates National Bank of Dubai (ENBD), Abu Dhabi Commercial Bank (ADCB), Dubai Islamic Bank (DIB), Abu Dhabi Islamic Bank (ADIB), and Mashreq Neo are our top picks.
Fixed deposits (FD) are one of the best short term investment options available in the UAE. They are secure investments and you can easily invest your money in FD anywhere up to 10 years.
Who Needs to pay Income Taxes to the UAE while Living in Dubai? Americans living in Dubai typically pay nothing on their earnings, whether they're US citizens or green card holders, as long as they are not considered tax residents of the UAE.
General Questions. I am not a resident of the United Arab Emirates. Can I open an account with the Bank? Non-residents can open Savings Account with the bank.
There is no restriction on the amount of cash that you may carry. The declaration is for monitoring and statistical purposes. Where can I declare money exceeding AED 60,000?
Some options that expats have include offshore investment bonds, managed future funds, commodities and more. If you have enough capital, you can also consider purchasing property in your new country of residence and turning that into an AirBnb or your long-term home.
In the UAE, if you want to yield a good return on your investment, you must consider putting your money into five different investment instruments - Stocks, Bonds, Mutual Funds, ETFs (Exchange Traded Funds), and REITs (Real Estate Investment Trusts). You must also assess the risk factor before investing in the UAE.
The UAE GDP for 2020 was $359 billion. This reflects the rich natural resources in the UAE, which has 10 percent of the total world supply of oil reserves and the world's fifth largest natural gas reserves. As a mainstay to the economy, oil exports now account for about 30 percent of total UAE gross domestic product.
Tourism is a major economic source of income in Dubai and part of the Dubai government's strategy to maintain the flow of foreign cash into the emirates.
If you don't want to read the whole blog, here is the bottom line; a salary of AED 10,000 - 15,000 (USD 2,700 - 4,000) a month is considered pretty decent with the potential to save a good amount, while a salary of AED 15,000 - 20,000 (USD 4,000 - 5,400) per month and more is considered very attractive.
If you earn Dh200,000 per year, saving 50 per cent would move Dh100,000 into savings. If you can save Dh50,000 each year, and invest it at 7 per cent, you'll cross the million-dirham threshold in 13 years.
For those looking to save money on food in Dubai, a handy tip is to buy local and in-season produce as much as possible. You can also cut down your monthly grocery bill by demoting imported food items and expensive cuts of meat to occasional purchases.
With 4.88 million tourists last year, Dubai is considered the #1 destination city according to a report by Forward Keys, making the property market in Dubai so lucrative. The real estate market in Dubai has a vast scope of opportunities, including real estate development, property management, and brokerage.
There is one disadvantage of the Golden Visa — this residency route does not lead to citizenship. You can renew the visa several times and try to apply for citizenship in 30 years. But there are no guarantees.
A UAE passport in Dubai can be granted by descent, by naturalisation, by marriage, or by exceptional merit. The latter option is available for investors. Before applying for citizenship, they obtain a 2- or 10-year residence permit by investing at least AED 750,000, or approx.$204,000 in UAE property.
Purchasing real estate in Dubai may grant the buyer a residence permit. According to the UAE investor visa program, the property must be completed upon the purchase and its value must be of at least AED 1 million. Holders of residence visas through real estate purchase may also sponsor their dependents.
Machinery, food, chemicals, and transportation equipment are the most commonly imported goods in Dubai. Dubai also imports textiles and metals from China, as well as cotton, fabrics, machinery, and instruments, and plastics from India. Two of the most important imported goods are jewellery and gold.
Why Dubai attracts FDI. “The emirate's world-class infrastructure, flexible regulatory framework, and dynamic business ecosystem that supports innovation and attracts global talent are factors that cement Dubai's position as the world's leading investment destination.”
The main investors in the UAE are: Switzerland, the United Kingdom, India, the United States of America, France, Austria, Japan, Kingdom of Saudi Arabia, Kuwait and The Netherlands.
Most foreign investors are mainly attracted by the Dubai's economic stability, low cost of energy and more importantly, the tax-free environment for companies in Dubai. The absence of limitations on repatriation of profits also makes Dubai an attractive environment for both local and foreign investors.
As one of the world's freest economies with a globally-minded business culture, the UAE is a stable, investor-friendly global hub. In 2018, the Gulf's second-largest economy received US$10.3 billion in foreign direct investment (FDI); mainly in trading activities, real estate, finance, insurance, and manufacturing.
While travelling to Dubai, you can carry AED and other currencies up to the limit of $3000. The general limit for an individual under Liberalised Remittance plan for Resident Individuals is $2,50,000 per financial year.
All passengers arriving in the country must declare cash or other bearer monetary instruments in their possession in an aggregate amount exceeding AED 100,000 or its equivalent in foreign currencies and travelers cheques, by filling out the designated declaration form in accordance with the cash declaration regulation ...
For example, certificates of deposit (CDs), money market accounts, municipal bonds and Treasury Inflation-Protected Securities (TIPS) are among the safest types of investments.
The biggest and the foremost attractive asset is that of the high rental yields that an investor in Dubai can bag in of upto 8%. To cut the long story short, every foreign expat is allowed to invest in UAE and can earn a handsome profit out of it too.
The new law also permits full ownership for foreign investors in designated areas of Dubai. This means that foreigners can now enjoy full ownership benefits of business establishments in the emirate.
The UAE Government amended the federal Commercial Companies Law, granting foreign investors full ownership of specific businesses. This means that foreign investors' shares will not be limited to a maximum of 49 per cent like before, but can be up to 100 per cent instead.
submission of a letter from an investment fund accredited in the UAE stating that the investor has a deposit of AED two million, or. submission of a valid commercial licence or industrial licence and a memorandum of the association stating that the investor's capital is not less than AED two million.
Minimum deposit of AED 2 million (approximately USD 550,000) into an accredited investment fund in the UAE, with a letter from the fund. Minimum investment capital of AED 2 million (approximately USD 550,000) into a company, with a valid commercial or industrial license.
Offshore bonds provide a tax efficient investment option for expats as the bond will not be subject to capital gains tax and income tax deferred. This means that the investment grows free of tax, substantially increasing the value of the investment itself.
To invest in the UAE stock market, you will need a stockbroker, who will provide you access to any of the three stock exchanges in the UAE — Dubai Financial Market (DFM), NASDAQ Dubai, Abu Dhabi Securities Exchange (ADX).
A UAE passport in Dubai can be granted by descent, by naturalisation, by marriage, or by exceptional merit. The latter option is available for investors. Before applying for citizenship, they obtain a 2- or 10-year residence permit by investing at least AED 750,000, or approx. $204,000 in UAE property.
Yes, a foreigner can start a business in Dubai, and many do. The local population is over 80% expatriate, with many of those owning their own businesses. Dubai actively welcomes investors and business owners from overseas.
Non-residents can open Savings Account with the bank. As per guidelines issued by The Central Bank of UAE, GCC nationals are allowed to open Current Account.
A foreign company can establish its presence in the UAE by setting up a branch or forming a company. A branch or company must obtain a licence from the federal and/or emirate level authorities to carry on its proposed activities.
People with exceptional talents, such as inventors, innovators, and talents in vital fields such as culture, art, sports and digital technology can apply for and obtain a UAE golden visa regardless of their educational qualification, employment status, monthly salary or professional level.
When obtaining a second passport, you will need to ensure that your country and the second country allow dual citizenship. UAE allows dual citizenship, so UAE passport holders can obtain additional citizenship and passport.
Introduction: My name is Mr. See Jast, I am a open, jolly, gorgeous, courageous, inexpensive, friendly, homely person who loves writing and wants to share my knowledge and understanding with you.
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