Different Investment Opportunities in the United Arab Emirates
The UAE famously has a tax-free policy, where there is currently no tax on income. This means that many tourists end up relocating due to the great opportunity to increase your wealth.
It is also an excellent way to start expanding your investment portfolio, whether that be in stocks or real estate. Whatever wealth management advice you need, the team here at Ai Investment can help. We have in-depth knowledge in investment practices and we are able to calculate what the best ways are for you to grow your overall wealth.
In this blog post, we will be discussing some of the different investment opportunities which will be open to you once you relocate to the United Arab Emirates.
Investing in stocks and bonds
To put it simply, stocks are shares in the ownership of a business. You can purchase small portions of a company and when they make more profit, your stocks will increase in value.
Bonds are slightly different. When you buy a bond, it goes towards a company's debt or is used to finance a new venture for that business. You will begin earning money once they do.
Both stocks and bonds provide different benefits and neither are risk free. Bonds are the safest of the two options, although they do offer lower returns. If you are looking to take a bigger risk, stocks could be a good investment. Stocks can increase quicker and will offer you a higher return, however, there is always a chance of a stock market or company-specific cras, which has happened before.
When looking to relocate to the United Arab Emirates, researching their stock market will be extremely beneficial. The UAE is known to be a tax-free zone, which also applies to your investments. In the UK and other countries, you get taxed on additional profits. This is called Capital Gains Tax or CGT when your cash flow exceeds £12,300.
However, in the UAE, there is no special tax regime for expatriates in the UAE. Which means capital gains are not subject to taxation either.
In Dubai, it is considered a long-term investment when you put your money into property.
There are a few ways you can do this. You can purchase a personal home for you or your family, a business property or a commercial building.
With the UAE not lacking tourist flow, investing in the hotel market is a great way to earn a passive income. A passive income is an income that you earn from something you aren’t actively involved in. For example, renting a property to a tenant or earning from a limited partnership.
Hotel property market is also an example of passive-investment. The investor will purchase a hotel room in a local chain. As the room is occupied by guests the investor will be able to collect a regular rental income and in the UAE, this is considered a safe and stable option when it comes to investment choices.
There are also other options, such as purchasing a house or flat. Expats can get a mortgage from lenders who are also operating the UAE. However, you have to be aware of some restrictions which you might not face in other countries. There is a law called the UAE Mortgage Cap, which requires all non-UAE nations to have a cash payment to put down on the property they are looking to buy.
This cash payment should be 20% of the property’s value plus associated purchase costs. For UAE nationals, they are required to put down 15% on real-estate. Buying a property in Dubai can be a relatively simple process and even a profitable one for people who relocate.
If you need any help or advice when it comes to purchasing real-estate, we are always open to your questions. Contact us now or read our ‘Investment in Real Estate’ page for some quick information.
Gold and oil
Gold and oil are always popular investment opportunities and even more so, when you are talking about the UAE.
Oil is responsible for 25% of the UAE’s overall gross domestic product. Saudi Arabia is known for having a large amount of oil, which is estimated to last around 90 years. Additionally, 85% of Saudi oil fields have not yet been extracted, meaning there are still plenty of opportunities when it comes to investing.
There are lots of different ways to invest in the oil sector. For example, you could buy or lease land where you will be able to invest your money into the drilling for the oil. This is a direct way to invest your money and get a good return.
Another way is obtaining through a lease or fully purchasing land with oil reserves on it. This can create a steady flow of income.
Gold is a different field. As well as having no income tax, there is also no tax on gold imports or other raw materials. Other countries such as India, investing in gold is difficult due to steep import taxes, something the UAE doesn’t have.
Investing in gold is also a simple process, you just have to decide how many ounces of gold you would like to invest in, much like stocks and then according to the local gold rate, you can transfer the funds into your XAU account.
If you need any help or you’re just seeking general advice, our team has plenty of knowledge surrounding investment and can aid you in finding the best opportunity for you.