The unparalleled returns, low taxes on capital gains, and highly favorable business environment have made the United Arab Emirates the fourth-best country in the world to invest in. And, thanks to its ambitious development strategy and multiple free-trade zones, Dubai is at the center of it all.
But while the UAE is the chosen Foreign Direct Investment (FDI) destination of over 70% of Fortune 500 companies and continues to receive over $10 billion in foreign investments a year, investing in Dubai requires expats to carry out the necessary due diligence.
Get started with this guide.
First Things First: Want to Move to Dubai? Here Are 5 Things You Should Know
As one of the freest economies, the UAE is truly a haven for foreign investors. However, before moving to Dubai, there are some social, cultural, and economic factors to be aware of:
- Health insurance – in Dubai, employees might receive health coverage from their employer, but all expats are required to meet the Emirate’s private health insurance requirements.
- Car insurance – to drive legally in Dubai, you’ll need at least third-party liability insurance. Car insurance quotes in the UAE can be compared to the Insurance Market.
- Cost of living – life is expensive in Dubai, and a bounced check can have severe legal consequences
- Alcohol consumption – alcohol consumption is highly regulated in Dubai. In the Emirate it is illegal to drink or purchase alcohol without a license as well as drinking and being under the influence in public.
- Social rules – some of the things to avoid include photographing people, using your left hand for greeting, dressing inappropriately, and making rude hand gestures.
Learn more about the customs and etiquette of Dubai before moving there to avoid costly faux pas!
4 Investment Options in Dubai For Expats
Foreign investments in Dubai are regulated by the UAE Federal Law No.19 of 2018 on Foreign Direct Investment. The law, which was updated in 2020, defines how and in which sectors foreigners are allowed to invest.
However, specific requirements vary from one Emirate to another, and can also change based on each free-trade zone’s requirements.
Here are some of the best investment options for expats in Dubai.
Savings and Retirement Account Investments
If you are planning to reside in Dubai for years and looking for a passive, long-term investment alternative, savings and retirement account investments might be for you.
Savings accounts are extremely low-risk, provide a high-liquidity asset, and can offer you an average of 4-7% return on investment. On the other hand, retirement accounts don’t provide immediate liquidity, but you can better manage risk according to your tolerance and benefit from greater returns.
Real Estate and Property Investments
Investing in real estate in Dubai certainly has its pros and cons. However, if you are looking to tap into the city’s ambitious development plan and future growth, real estate investments can offer higher returns, as well as value stability and a low level of investment risk.
Another option to invest in Dubai’s market without purchasing a property is to contribute to real estate investment trusts (REITs) or buy stocks of companies that are investing in real estate.
Business Investments
Thanks to the latest updates to the UAE’s FDI Law, this is an excellent time to invest in Dubai-based businesses. Today, foreigners residing in Dubai can establish a business and retain 100% of the onshore company’s ownership.
Given the thriving economy of Dubai, the high return potential, low personal and corporate taxes, and future growth plans, this might be the best investment for entrepreneurs and experienced business owners – especially now that you no longer need the support of a major Emirati shareholder.
Investing in Funds, Stocks, and Shares
As part of its financial modernization plan, in 2005, Dubai established the Dubai International Financial Exchange (known as Nasdaq Dubai since 2008). The Emirate further expanded its financial offer in September 2016.
Today, expats looking to invest in stocks, shares, mutual funds, and bonds can start trading with minimal paperwork and directly through Dubai Financial Market (DFM).
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.