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Investment options in Dubai

From equities to stocks, businesses to properties in tax-free Dubai, we break down some of the primary areas for investment.

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Things to consider

With its attractive tax-free structures and zero limitations on the repatriation of profits, Dubai has a strong track record for securing foreign direct investment. According to Dubai FDI, the emirate is considered the preferred global FDI destination for more than 70% of Fortune 500 companies and new economy entrepreneurs alike. 

 

In terms of accessibility for foreign investors, overarching legislation is provided through UAE Federal Law No.19 of 2018 on Foreign Direct Investment (FDI Law), which effectively outlines foreign ownership and under which sectors it is permitted. Subsidiary to this legislation, Dubai comes with its own set of regulations and rights, which are further refined under any one of the emirate’s free zones, depending on how you invest and what structure you choose.

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Dubai is the Research and Development cradle of our tomorrow, nurturing ecosystems that thrive on innovation and disruption that fosters transformation.

Capital markets

As Dubai’s position as a financial centre has continued to mature, so has its demand for a broader range of capital market products and services.

Nasdaq

One of the major steps taken by Dubai in developing its financial offering was Nasdaq Dubai opening an equity futures market in September 2016, which allowed investors to hedge, short-sell and leverage. In its first three months, it generated a massive 796% increase in open interest.

Today, Nasdaq Dubai is an international financial exchange with a comprehensive regulatory framework that enables companies to raise funds while giving easy access to investors. As part of its innovative strategy, Nasdaq Dubai’s product range allows companies to raise capital through shares, Sukuk and bonds, while exchange-traded funds, derivatives, exchange-traded commodities and Real Estate Investment Trusts (REITs), can also be listed and traded. Similarly to Dubai’s capital markets, access for investors can be issued through the Dubai Financial Market. If you are yet to gain an investor account, you can open one directly through the DFM, Nasdaq Dubai or with a licensed brokerage firm.

Dubai’s financial markets are maturing anchored by its world-class bourses

Dubai’s financial markets are maturing anchored by its world-class bourses

Private equity

After almost a decade of significant returns in the US, Europe and Asia leading up to the economic downturn in 2008, Dubai’s Private Equity industry has seen a period of consolidation leaving a select group of larger, stronger firms and while they may not be raising the same amounts as they were at their peaks, research suggests the major players are still averaging US$1 billion per year.

Private Equity funds are considered exempt in Dubai, meaning they can only be operated by professional investors with a minimum investment of US$50,000. In addition, they cannot be traded publicly and are limited to a maximum of 100 shareholders. At the time of registration, the owner will need to decide whether the fund will be managed as a partnership, trust or a company and can choose between being registered under the Department of Economic Development or the Dubai International Financial Centre, the latter being the preferred choice for foreign investors. All investment funds are regulated by the Dubai Financial Services Authority (DFSA).

Venture capital
Following the success of the region’s first ‘unicorn’, in the form of Careem, which was acquired by Uber for US$3.1 billion, investments for venture funding in start-ups saw a 30% increase in the first nine months of 2019 to a total of US$517 million. Widely supported by various incubator and accelerator programmes such as In5, DTEC and Dubai Future Accelerators, Dubai has honed in on producing more innovative companies that not only support the emirate’s diversification strategy as a centre for innovation but also develop its track record as a launchpad for disruptive companies.

Stock

Options for investing in stock varies, depending on what you’re looking to buy and in what quantity.

Today, there is a wide range of online platforms such as Plus500 or eToro that give relatively straightforward access to a broad cross-section of global stocks in return for the industry-standard due diligence documentation. If you are a novice in financial investment, it is typically advised to utilise a professional broker who can oversee and manage your investment on your behalf. A list of registered brokers, along with their ranking can be found on the Dubai Financial Market website:

Companies

In broad terms, companies are either registered as ‘onshore’ or within any one of the emirate’s economic free zones. As such, investing in an existing business will be under the terms and conditions of where the company is incorporated.

Dubai’s versatile real estate market attracts foreign direct investment

Dubai’s versatile real estate market attracts foreign direct investment

Property

Options for investing in stock varies, depending on what you’re looking to buy and in what quantity.

Today, there is a wide range of online platforms such as Plus500 or eToro that give relatively straightforward access to a broad cross-section of global stocks in return for the industry-standard due diligence documentation. If you are a novice in financial investment, it is typically advised to utilise a professional broker who can oversee and manage your investment on your behalf. A list of registered brokers, along with their ranking can be found on the Dubai Financial Market website:

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