Whether you’re drawn to the stability of real estate markets, the allure of gold and the security of national bonds, or the excitement of Forex and equity markets, this guide will navigate you through some of Dubai’s investment opportunities.
Dubai is a global financial hub, home to the top banks in The Middle East, Africa, and South Asia (MEASA), and an oasis for fintech investment thanks to the support for cutting-edge technologies, artificial intelligence, and blockchain solutions.
Dubai's favorable investment incentives, tax-friendly environment, and reputation for innovative financial services, present a wealth of options for those looking to invest in Dubai in 2024.
How to Invest in Dubai – Quick Guide
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.
Step 1: Open an Account
You can apply to trade both DFM and Nasdaq Dubai-listed securities in a few simple steps. Alternatively, there is a wide range of online platforms such as CAPEX.com that give relatively straightforward access to a broad cross-section of global stocks, ETFs, and derivatives with local exposure.
Step 2: Start Trading
Once you appoint a broker and open an account, you can start trading through the options they provide, such as through their mobile app or online platform. Exchange-traded funds, derivatives, exchange-traded commodities, and Real Estate Investment Trusts (REITs) are available on CAPEX.com.
Step 3: Track Your Portfolio
View and track your portfolio and trading activity on the mobile trading app or via the broker’s platform. You can modify or close orders instantaneously and set price alerts. Your final profit or loss would be realized upon the closing of the trade.
Why Invest in Dubai?
With its highly diversified economy, world-class regulatory environment, and ambitious economic expansion plans, Dubai has established itself as the preferred destination for multinational firms, start-ups, and entrepreneurs targeting growth in the Middle East, Africa, and South Asia (MEASA) region, which is home to a population exceeding 1.7 billion.
The demand for capital markets and wholesale banking is expected to rise along with trade and investment. This confirms Dubai's status as the de facto center connecting all the key markets in the area, which explains why over US$350 billion in trade passes through Dubai annually.
Global financial hub
The Dubai International Finance Centre (DIFC) is the financial heart of the MEASA region, filling the time-zone gap between the leading financial centers of London and New York in the West, and Hong Kong and Tokyo in the East. With a fast-growing GDP and 40% of the population under the age of 25, offers options for digital financial services and has become a magnet for those looking to invest in Dubai.
A vibrant banking and trade sector
DIFC hosts most of the world’s largest banks, top law firms, and the world’s most prestigious wealth and asset management companies. Credit card giants Visa and MasterCard are also headquartered in Dubai. DIFC is also home to Dubai’s stock exchange, a buoyant insurance sector, and derivatives equities and commodities platforms like Nasdaq Dubai, Dubai Financial Market, and Dubai Mercantile Exchange.
Investors and venture capitalists
Dubai is home to the highest number of investors and venture capitalists in the region. Crowdfunding platforms and lower-cost portfolio products have opened investment and are giving middle and lower-middle-income citizens the ability to become investors. Growth in the provision of credit, an increasing interest in private equity and a rise in venture capital are also helping to drive growth in the middle market.
Leading fintech innovation
As technology is transforming the way financial transactions are enabled and completed, Dubai is taking the lead in the region’s fintech sector with a wealth of start-ups setting up operations in the city. Fintech start-ups have raised hundreds of millions of dollars in funding over the last year. The DIFC is spearheading the city’s innovation ecosystem and is well-placed to drive growth and investment opportunities in Dubai in 2024 and beyond.
AI and Robotics
The city also ranked first globally in attracting foreign direct investments (FDI) for AI and Robotics, reporting tens of billions worth of FDI in high-end technology transfers in the last years; the most coming from the European Union and the U.S. With its own focus on attracting investment in technology, including robotics and AI, Dubai is ideally positioned at the region's heart to lead the fintech and blockchain revolution.
Tax and government incentives
By adopting international best practices, introducing tax incentives, and robust regulatory and legal frameworks, Dubai has become an attractive business destination for start-ups and multinationals. There is no corporate and personal income tax levied in Dubai-based free zones. World Bank's Doing Business report ranked Dubai first for ease of doing business in the Middle East & North Africa.
Are These the Best Investment Opportunities in Dubai?
From equities to stocks and businesses to properties, we break down some of the primary areas for investment in Dubai.
Invest in Dubai through Capital Markets
Investing in Dubai allows foreigners and locals, individuals or companies, to provide businesses with the money they need to grow, which means they will play an important role in the local and regional economy.
Potential stock investment opportunities in Dubai
To spot investment opportunities in Dubai through the stock market, the first step is to have a solid understanding of the market itself. There are two primary stock exchanges: the Dubai Financial Market (DFM) and the Nasdaq Dubai.
These exchanges provide a platform for investors to buy and sell shares of publicly listed companies in the UAE. Each exchange has its own regulations, listing requirements, and trading hours. Familiarise yourself with the operations and rules of these exchanges to navigate the market effectively.
Diversification is a fundamental principle of successful investments in Dubai. Instead of putting all your money into a single stock, spread your Dubai investments across different companies and sectors. This strategy helps mitigate risk and reduces the impact of any single investment’s performance on your overall portfolio.
Invest in Dubai through UAE ETF
Consider investing in stocks from various industries such as finance, real estate, energy, healthcare, and technology. For beginners, low-cost index funds or exchange-traded funds (ETFs) can be a straightforward way to start investing in Dubai. ETFs provide broad market exposure and are designed to track the performance of a specific local index. They offer instant diversification and generally have lower expense ratios compared to actively managed mutual funds in the UAE.
The most liquid and popular ETF that provides broad exposure to the Dubai stock market is iShares MSCI UAE ETF (UAE), which seeks to track the investment results of an index composed of the top 40 UAE equities. EMAAR Properties, Dubai Financial Market (DFM), Dubai Islamic Bank (DIB), and Dubai Investment (DINV) are some of the best investments in UAE for expats and are among the top holdings in UAE ETF.
Invest in Dubai through US-listed companies
Additionally, you may explore opportunities beyond the Dubai and UAE stock markets, such as international stocks or exchange-traded funds (ETFs). Dubai is a dependable and significant economic partner of the United States. It is also the United States’ number one export market in the Middle East region.
More than 1,500 US firms have a presence in the UAE, from Uber, to Microsoft, and Starbucks. Major global companies — such as Lockheed Martin, Boeing, Northrop Grumman, General Motors, FedEx, Eli Lilly, and Cigna Healthcare – recognize the opportunities offered by the UAE economy, and many base their headquarters and regional offices in Abu Dhabi and Dubai.
Explore our range of stocks and ETFs
With CAPEX.com you can trade iShares MSCI UAE ETF and other 2,000+ CFDs on shares. You can also buy 5,000+ stocks and ETFs listed on 10 global exchanges. Our trading platform includes a variety of useful features for share trading, such as the analysis, consensus, and sentiment from Tip Ranks, pattern recognition from Trading Central, and advanced charts from Trading View.
Potential Real Estate Investment Opportunities in Dubai
The Dubai real estate market has been a magnet for investors due to its robust performance and consistent demand. Although it has experienced significant growth in recent years, projections indicate a moderation in this trend, in line with global trends.
The Dubai real estate market is varied, serving residential, commercial, retail, and hospitality sectors. It is recognized for its luxury apartments, iconic palm-shaped islands, and expertise in hosting large-scale events. Dubai’s strategic geographic position, attractive tax environment, and strong infrastructure continue to present numerous investment opportunities.
Residential vs. Commercial Real Estate
Investors in Dubai’s real estate can choose between residential and commercial properties. Residential properties intended for a living generally require a lower initial investment than commercial properties utilized for business operations.
Commercial real estate typically involves longer lease terms and is supported by businesses and professionals, offering financial dependability. However, these properties demand a higher initial investment and are subject to greater market fluctuations.
In contrast, residential properties are considered less volatile during economic downturns, though they may generate lower returns. Each real estate investment trust and type has distinct benefits and risks that should be balanced against your financial objectives and risk tolerance.
Investing in Dubai through REITs
A business that owns, manages, or finances income-producing real estate is a real estate investment trust (REIT). They allow investors to diversify their potential risks, particularly those with small investment amounts, and earn dividends from real estate without having to invest, manage, or finance any property themselves.
They own homes, apartments, condos, office space, retail stores, and other real estate in various markets. As a result, they are sufficiently diversified to guard against the risks that any micro market may pose. This has led many investors to favor REITs as a preferred option.
Some of the best Dubai real estate companies are:
EMAAR Properties
- Emaar Properties is Dubai's leading developer and the largest developer in the Arab world. It is a public joint-stock company and holding, uniting 60 active companies. It has a collective presence in 36 markets across the Middle East, North Africa, Pan-Asia, Europe, and North America.
- The main sectors are development, hospitality (Emaar Hospitality Group, Investments and business (Emaar Industries & Investments), medicine and health care (Emaar Healthcare), etc.
- Emaar Properties is the developer of Dubai's legendary projects such as Burj Khalifa – the tallest skyscraper in the world, Dubai Creek Tower – a structure under construction 100m higher than Burj Khalifa, Downtown Dubai, Dubai Mall – the largest shopping mall in the world, and Emaar Beachfront.
Investors can buy shares of EMAAR Properties or trade the iShares MSCI UAE ETF (UAE) which holds 2.2 million shares of EMAAR (13.21% weighting).
EMAAR Development
- Emaar Developments is the UAE-based property development arm of Emaar Properties. The company develops residential and commercial property, shopping malls, and other retail assets, as well as hospitality and leisure attractions.
- With the support of the parent company, Emaar Properties, Emaar Development has developed projects such as Emirates Living, Dubai Marina, and Downtown Dubai.
- Since 2002, Emaar Development has delivered over 34,500 residential units, and, according to JLL, approximately 22 percent of all freehold residential units in Dubai are located in Emaar Development's communities.
Investors can buy shares of EMAAR Development or trade the iShares MSCI UAE ETF (UAE) which holds 200,000 shares of EMAAR (1.17% weighting).
Explore our range of REITs
With our trading platform and apps, you can trade or purchase shares of publicly traded REIT stocks and ETFs investing and managing properties, or finance mortgages for real estate. With UAE ETF you can get exposure to a wide range of Dubai real estate companies, such as Emaar Properties and Emaar Development.
Potential Bond Investment Opportunities in Dubai
National Bonds Corporation (NBC), established in 2006, is a Sharia-compliant savings and investment company licensed by the UAE Securities and Commodities Authority. It shares the UAE’s leadership vision and is on a mission to encourage a culture of savings and contribute to the financial well-being of individuals, which in turn boosts the local economy.
NBC is wholly owned by the Government of Dubai through the Investment Corporation of Dubai (ICD), reflecting its strong backing and stability. Investors can feel secure knowing that a reputable entity protects their money. The company offers diverse investment products and financial solutions to UAE nationals, residents, non-residents, and corporations. The products are denominated in AED and other major world currencies, providing flexibility and catering to a wide investor base.
One of the key offerings of NBC is the Savings Bonds, designed to help you achieve your financial goals and create a secure financial safety net. These bonds are flexible, allowing investors to save on their terms. The Term Sukuk plan offers competitive expected profits if you’re seeking a more structured investment in Dubai's fixed assets.
Explore our range of Bonds
On our trading platform, we offer a derivative version of the US, UK, and Euro Bund to trade. You can also trade and invest in bond funds, or balanced ETFs that invest in a mix of bonds and equities.
Gold Investing in Dubai
Due to its tax-free atmosphere and gold souks, Dubai has become a major player in the global gold market, drawing in both domestic and foreign investors. Clearly defining your goals is essential when thinking about investing in gold in Dubai. Gold buying options include physical gold, digital gold investing includes gold ETFs, and stocks of gold mining companies, while gold trading options include futures and CFDs. Each has special considerations, such as market expertise for derivatives, funds, and stocks, and storage and insurance for physical assets.
Gold prices are influenced by several factors such as geopolitical developments and indicators of the world economy. It frequently acts as a hedge against conventional asset classes and acts as a hedge during recessions. To ensure adherence to Islamic finance rules, investors seeking Sharia-compliant assets are also catered to by Dubai's gold market.
Despite gold’s reputation as a safe haven asset, it’s important to acknowledge the inherent risks associated with any investment.
Explore our range of Gold Assets
On our multi-awarded platform, we offer a derivative version of gold spot to trade, as well as physically gold-backed ETF and gold mining stocks and funds. You can view our XAU/USD live chart, seamlessly open and close trades, track your progress, and set up alerts.
Forex Trading in Dubai
The Central Bank of the UAE supervises Forex brokers, ensuring they adhere to strict regulations to protect investors and the market’s integrity. The DFSA within the DIFC and the FSRA in the ADGM work in tandem to provide a secure environment for currency trading and investing in Dubai.
They require brokers to maintain adequate capital and implement fair treatment of clients, along with measures to prevent financial crimes. The progressive economic policies of the country are in line with this oversight, which helps to build the reputation for Forex trading in the UAE.
Dubai's advantageous geographic position and cutting-edge technology infrastructure increase its allure for currency trading. However, while Forex trading offers the chance for substantial returns, it also comes with high risks. Traders should be well-informed and may benefit from consulting financial advisors. The low entry barriers, including user-friendly platforms and educational resources, make it accessible for newcomers.
Explore our Forex Trading products
Discover trading Forex CFDs on our versatile WebTrader platform and mobile trading apps. At home or on the go, you can trade CFDs on over 55 major, minor, and exotic FX pairs, with tight spreads and fast order execution.
Invest in Dubai through Private Equity Funds
Prior to the 2008 financial crisis, nearly ten years of substantial returns in the US, Europe, and Asia saw a period of consolidation in Dubai's private equity market, leaving a small but strong group of larger companies. Although these companies may not be raising as much money as they did at their peak, research indicates that the major players are still making an average of US$1 billion annually.
In Dubai, private equity funds are regarded as exempt, which means that only experienced investors with a US$50,000 minimum commitment may manage them. Furthermore, they are restricted to a maximum of 100 shareholders and are not eligible for public trading.
The owner may register the fund with the Department of Economic Development or the Dubai International Financial Centre, with the latter being the more popular option for foreign investors. At registration, the owner must also determine whether the fund will be managed as a partnership, trust, or company. The Dubai Financial Services Authority oversees all investment funds (DFSA).
Setting up a Business in Dubai
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.
Mainland businesses that are officially registered with the relevant emirate's government can conduct unlimited business. Historically, foreign investors needed a local sponsor. Free zones, which are overseen by independent regulatory bodies, grant total control from the outset. Among the many advantages they provide are the choice of virtual offices and the absence of a local sponsor.
The choice between the mainland and the free zone depends on your business needs. Once you’ve started your company, you’ll need to find a space to work, hire your staff, and get up to speed with Dubai’s rules and regulations.
In Sum, How to Invest in Dubai?
As the MENA region’s most diversified economy, Dubai is a magnet for foreign investment and a fast-growing hub for entrepreneurs.
Options for investing in Dubai through the capital market vary, depending on what you’re looking to trade and your risk appetite. Stocks, exchange-traded funds, derivatives, exchange-traded commodities, and Real Estate Investment Trusts (REITs) are some of the most popular options to invest in Dubai.
Today, there is a wide range of ADGM-regulated online platforms such as CAPEX.com that give relatively straightforward access to a broad cross-section of global assets.
Free Resources
Before you start in Dubai through capital markets, you should consider using the educational resources we offer, like CAPEX Academy or a demo trading account. CAPEX Academy has lots of free trading courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you become a better trader or make more informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for stock investors who are looking to make a transition to leveraged trading.
Sources:
- https://www.visitdubai.com/en/invest-in-dubai/dubai-for-investors/investment-options
- https://www.nasdaqdubai.com/exchange/about-us/why-nasdaqdubai
- https://www.dfm.ae/discover-dfm/why-dfm
- https://www.ishares.com/us/products/264275/
- https://properties.emaar.com/en/about-emaar/