What can expats do in terms of investing?
It is a common question in the investment world as nationality and citizenship do play a role in how certain countries allow investing, especially in terms of taxes. In most countries because of how common online investing has become, citizenship is not an indicator of whether or not you can trade on local stock exchanges. But it’s not just stocks and bonds that people can invest in. Much of what you choose to invest in depends on things like disposable or investable income, risk aversion, and long-term versus short-term goals. Let’s take a look at some of the best investment options for expats in Dubai.
- Property Investment: Stocks are usually the first thing people think about when talking about investments, but in a property market like Dubai, there may be no better place to park your money and watch it grow, than in property. Dubai is one of the fastest growing cities and markets for investment in the world, and has one of the highest wealth per capita as well. On top of all of this, tourism is a huge part of Dubai’s industry, so getting a hold of some real estate could pay huge dividends in the long term, as long as you believe that tourism can return to normal after the COVID-19 pandemic. Investing in real estate does require the most up front capital though so keep this in mind if you wish to use real estate as your investment.
- Stock Markets: There are three major exchanges for investors looking to trade equities in Dubai: the DFM or Dubai Financial Market, the ADX or Abu Dhabi Securities Exchange, and the NASDAQ Dubai. Each market has different companies that are offered publicly to trade, with the DFM and ADX offering more local companies from Dubai, whereas the NASDAQ offers international companies for investing in.
- Funds: Under the umbrella of funds we have things like mutual funds, ETFs or exchange traded funds, equity funds, fixed-income funds, and the list goes on. Funds are simple for low-touch investors who like to just put their money to work without having to worry about how individual companies or sectors are performing.
There are some things to consider before jumping into investing in the UAE as an expat, just as there are in any country you may be a resident of. Every investor is concerned with tax implications for investing and being an expat should be no different. The UAE, however, does not tax on income as other countries traditionally do which can be extremely appealing to investors and workers alike. The UAE does not tax on personal income, whether from investments or employment, so unlike investing in America, you are free to make as much as you can without fear of taxation. Keep in mind the currency differences as well. If you are investing American dollars into UAE stock exchanges, there may be a difference in value at the end of the day. Finally, the UAE offers fairly low interest rates compared to other countries around the world, so borrowing for investments may be an option if you find yourself low on capital.