The UAE has a lot of avenues open for investment and the best part of investing in the country is the robust legal mechanism that can shield the investments like a fortress. For the same reason, every year the UAE corners a substantial amount of foreign direct investment (FDI). As per the UN Conference on the Trade and Development report, in 2021, the UAE happened to be1st among the Arab countries and 15th in the world to attract FDI like a magnet. Now, let us explore some of the best options for investments in the country.
First and foremost, to invest in the share market of the UAE a person must open a trading account with a broker. And the broker in question must be listed on these stock exchanges within the emirates: Dubai Financial Market, Abu Dhabi Security Exchange and Nasdaq Dubai. As far as investments in shares are concerned there are two ideal ways of reaping benefits, dividends and appreciation. The first one is suitable for short-term and the second one is long-term investments.
This happens to be a trust that collects money from various investors with a unified aim. The funds pooled from various sources are invested in shares, gold, real estate etc. In the UAE, Emirates NBD, ADCB, HSBC and other banks offer mutual funds. The price of a mutual fund unit is based on the rate of bonds, shares and securities in which the mutual fund is parked in. Investors can make a profit through dividends or interest, which is dispersed by mutual fund managers. Another way to reap an advantage is when the value of mutual funds increases. The rise in value is based on dual factors: market demand for the organisation and the value of the security purchased.
Real estate investment trusts permit investors to cash in on the UAE real estate market sans property purchases. Similar to other companies, investors are free to purchase and sell shares in REITs, getting profits via dividends and spikes in the investment trusts’ value. Emirates REIT, registered with the DIFC, happens to be the largest trust in the country. Its shares are even traded on Nasdaq Dubai.
In the capital city, Abu Dhabi, average residential property prices went up by 2.2% between January and August 2021, as per a report by CBRE. This makes realty another viable option for investors to put their money in. As a result of its stability, flexibility and financial viability, the UAE real estate market has grown over the years into a major foreign investment zone. The best part of investing in properties in this part of the world is that investors don’t have to be wary of inflation and can corner revenue between 7% and 12% annually.
Equity Funds are also a perfect investment vehicle for investors in the UAE. These are best suited for passive investors, as they get the luxury of holding various kinds of securities in ETFs under an investment option provided. There are two ways to invest in these: independently with brokers or with a financial adviser. In the first scenario, the individual has to create an account with a brokerage firm listed on the relevant stock exchange. In the second scenario, the financial advisor will assist in building a portfolio of ETFs for the investor and will revalue them in some time.