Investing Money in the UAE Prudently: What You Should Know
In the UAE, there are many investment options for you to consider. Know the key investment options to find out the best one for you.
A great way to achieve progress in the UAE is by investing money. It does not matter whether you are an Emirati or expatiate in the country; investing is for everyone, without any restrictions.
But there is also another side of the coin. It is challenging to determine the best investment strategy in the country. However, thorough research can help.
Why Invest Money in the UAE?
Investing in the UAE can elicit profitable results, which is why most people choose to invest in the country.
With a strategic location between east and west and connecting Middle-East, Asia, Africa, and Europe, the country provides many business establishments, from the mainland to free zones.
You might perhaps know that Dubai, the largest city in the country, bears the best-in-class infrastructure. And what is more, the UAE is a peaceful country in the Middle East and North Africa (MENA) region, and it ranks the first in the ease-of-doing-business in the MENA region.
Due to the efficient and flexible business system, the country draws in substantial foreign investments.
Where to Invest in the UAE?
Before you start investing, why not check out a few areas worthy of your investment? The best areas of investment in the country are:
Stocks
Investing in the stock market can give you profitable returns in both the short and long run. Dubai has two stock exchanges — the Dubai Financial Market (DFM) and NASDAQ Dubai.
Established in the year 2000, the DFM is a popular stock exchange in Dubai. The regulator of the stock exchange is the Securities and Commodities Authority (SCA), which reports directly to the economy minister.
NASDAQ Dubai lists both international and domestic stocks. It also allows trading in equity derivatives and real estate investment trusts. The stock exchange functions under the Dubai Financial Services Authority (DFSA) regulations, a financial regulatory authority of the special economic zone.
Mutual Funds and Bonds
Akin to stocks, you get the chance to invest in mutual funds and bonds in the UAE. But there is also an interesting point for you to know.
Since the UAE is an Islamic country, earning interest on money is considered a Haram in the Islamic culture.
As such, Sukuks is the trading medium of most bonds. However, the Western format is applicable in a couple of bonds.
Real Estate
Of all the investment options in the UAE, real estate is the most favourite among investors. And that is not without reasons.
Many factors render investment in real estate a desirable option among investors. Given the benefits, it makes sense for you to buy a house in the United Arab Emirates.
Remarkably, property prices in the UAE are less than in many global cities. Affordability is a big attraction for investing in a property in the country.
As the country lies between the east and west, it has provided a conducive environment for businesses to flourish. Many businesses have set up their bases in the country, and many existing businesses have expanded their operations. And the result is that demand for real estate properties has escalated to the never-before levels.
The real estate industry in the country is also something to look out for. It is a matured industry with quality builders and properties.
All these aspects have made the UAE an investment hotspot, attracting investors worldwide.
Moreover, the efficient financial system in the country has made property investments a smooth affair. With flexible repayment terms and quick disbursals, banks in the country help investors buy properties in the UAE.
If you do not want to stay in the country, it is also a good idea to invest in a country’s property. You can make a steady income from the property by renting it out. Rental yields are steadily increasing in the UAE.
The number of people coming to the country for employment is increasing significantly as the country offers numerous opportunities for many sections of workers. Simultaneously, the tourism industry is growing significantly. These factors have compounded the increasing demand for real estate properties in the UAE.
As such, you will real significant benefits by investing in a property in the country.
How to Get Started?
Before you decide to invest in a particular type of asset, it is important to follow a methodical approach, like:
Understanding Your Current Status
Start by assessing your current age, as investment goals are different for people of different ages. Apart from your age, assess the assets you currently have, and that could be land, a rental property, or shares of companies.
An outline of your assets will help you understand your current position, which can help you conceive your future course of action related to your investment goals.
Subsequently, make a list of your debts, if you have, like a mortgage and loan(s).
Decide Your Budget
After you have assessed yourself, it is now time for you to create a budget to decide how much money you can spend on investment.
Budget planners usually recommend the practice called the 50:30:20 rule. It means you allocate 50 per cent of your income on essentials, 30 per cent on discretionary spending and the remaining 20 per cent on investments.
So, choose a budget formula that works best for you.
Conclusion
In this article, we have discussed the simple investment options available in the UAE. It is a good idea to get in touch with a financial planner to know the other investment options and go for the best one.
