Investments in the UAE: types, options, and opportunities

"The United Arab Emirates is one of the most attractive countries for foreign investors. In recent years, the UAE government has been actively developing the economy, implementing investment reforms, and stimulating the industrial market. The main reason for the active influx of investors from Russia and several other countries is the favorable conditions for capital investment. The most popular region among entrepreneurs from Russia is Dubai."

Advantages of Investments in the UAE

The Emirates attract foreign investors due to the following advantages:

• The UAE has maintained a consistently high level of economic development in recent years.
• Low tax burden on investors is established in the UAE.
• Convenient geographical location. The country is located at the crossroads of several regions, facilitating easy access to other countries and markets.
• The government provides legal protection of investors' rights.
• Developed banking and economic systems facilitate investment and business operations in the country.
• Special free trade zones have been established in the Emirates, where businesses can operate and receive tax benefits.
• Investors can allocate funds into various sectors of the economy, including tourism, construction, finance, energy, and other markets.

Thus, flexible tax policies and support for small and medium-sized businesses have made the United Arab Emirates a true haven for investors in the stock market and other types of investments.

Investment Climate in the UAE

As part of the "Vision 2030" strategy, the UAE government aims to diversify and strengthen the economy, reduce dependence on the oil and gas sector, and attract investments in tourism, technology, healthcare, and education industries.

Various types of investments are available in the UAE: direct investments in companies, purchasing stocks on the Dubai Financial Market, investing in real estate market, infrastructure projects, research programs, and more.

The United Arab Emirates ranks high in international rankings for investor confidence and protection of their rights. The country implements a range of governmental, stock market, and banking investment support programs, making large and small businesses more competitive in the region and allowing them to enter the global market.

Creating an Investment Plan

Experts recommend the following steps when creating an investment plan:

• Define investment goals and strategy.
• Assess resources and financial capabilities.
• Formulate an investment portfolio consisting of stocks, bonds, and other financial instruments.
• Establish criteria for selecting investment projects and making decisions, such as profitability, risk, and liquidity.
• Determine the investment period and portfolio diversification strategy.
• Set intermediate goals and checkpoints for tracking and evaluating investment results.

It's also important to monitor market conditions, analyze results, and make necessary adjustments to the investment plan.

The specialists at The Level Consulting can help identify a profitable investment strategy in the United Arab Emirates market, provide consultation on each type of business, and if necessary, accompany investors in Dubai and other regions of the UAE.

Overview of the Best Investment Methods in the UAE

The UAE offers numerous industries for investment, catering to citizens of Russia and other countries.

Investment in Savings Accounts

Investing in savings accounts is one way to preserve and increase funds. A savings account is a bank account where money can be deposited, and interest is earned on the balance. Interest is accrued annually or at the end of a specified period determined by the bank. Investing in savings accounts requires minimal initial capital and is an excellent option for those who do not want to risk their money. Moreover, depositors can access their funds at any time by withdrawing them from the bank account.

Real Estate

One of the most popular investment methods in the Emirates is the real estate market, which is one of the most stable and secure in the world. Investors can earn approximately 10% of the property value annually by renting out residential properties in Dubai. The average cost of apartments in Dubai is $7,000.

Mutual Funds

Mutual funds are organizations that pool the capital of several entrepreneurs to increase it. Such enterprises are also called mutual. Mutual funds are suitable for those who lack the time or skills to make independent investments in stocks. Fund management is entrusted to an experienced curator who distributes the capital of participants and pays them profits.

ETFs

This type of investment is suitable for owners of small capital. While mutual funds set a minimum amount for deposits, ETF participants can start investing even by purchasing a single share. The principle of ETF operation lies in diversification, i.e., the distribution of shares among a group of investors. The difference between such funds and other organizations is that investors do not have to actively participate in the fund's work. It is an excellent option for those seeking a source of passive income with minimal investment and just trying to enter the local market.

REITs

A Real Estate Investment Trust (REIT) is a form of investment that channels funds into the real estate market, offering the opportunity to generate income from the rental and sale of commercial buildings, residential homes, and offices. The average annual return in Dubai typically ranges from 4 to 5% of the invested amount in the form of dividends.

Investing in REITs allows for easier withdrawal of funds at any time compared to direct real estate purchases. Many types of REITs are traded on stock exchanges as stocks.

Pension Investments

Investing in pension funds involves the process of saving and accumulating funds for retirement. The goal of pension funds is to create a long-term investment portfolio that can provide maximum profit for participants in pension programs. Stock investments in pension companies are a type of investment where participants' funds multiply over time.

For foreign citizens in the UAE, there is no provision for a pension. However, stock investments in pension organizations are possible. To do this, one must meet the following criteria:

• Monthly income of at least $4,000.
• Deposit in a bank of at least $275,000.
• Ownership of real estate with a total value of at least $270,000.

Investments in pension funds can usually be made with or without tax deductions, depending on the jurisdiction and type of fund. Fund strategies involve investments with varying levels of risk and return.

Overall, investing in pension organizations is a long-term strategy that can provide financial security in retirement. However, before investing, it is necessary to familiarize oneself with the conditions of the chosen fund and consult with a broker experienced in the stock market.

Stocks and Bonds

Stocks are the most common investment method worldwide. It involves an entrepreneur's active participation in the process of buying and selling securities. Returns depend on market conditions and the stability of the company in which you have invested.

Investment Tax

There is no investment tax in the UAE in any form. However, there are some exceptions and limitations related to specific sectors.

For example, when purchasing real estate in Dubai, a government fee of 5% of the property's value must be paid. In other emirates, this percentage may vary.

Additionally, investors may encounter taxes on rental income from real estate. These taxes are not fixed and depend on the region. For example, Dubai imposes a 5% tax on any property.

Furthermore, there is a tax on the transfer of property to another person. In Dubai, it is 4% of the total transaction amount.

Why Long-Term Investments in the UAE are Worth Considering

The United Arab Emirates has several advantages over other countries in terms of investment conditions of all kinds:

• The Emirates have one of the most stable economies in the world, with a high per capita income and impressive GDP growth.
• The UAE provides many benefits and preferences for foreign investors.
• In Dubai and most emirates, there are no taxes on individual income and corporate profits. Additionally, the government has concluded tax agreements with most countries worldwide, ensuring investor protection from double taxation.
• The country offers many opportunities for diversifying investment portfolios. These may include stock investments in real estate, stocks, bonds, and more.

Investing in the UAE from Russia can be done without relocation. However, the state offers investors quick residency permits. In recent years, several thousand Russians have moved to Dubai.

Conclusion

Experts believe that the United Arab Emirates has high growth potential in various sectors of the economy. The development of healthcare, education, IT technologies, and other sectors of the economy is not standing still, so the number of foreign investors in the local stock market increases every year.