Not only are there various investment options and vehicles available in the digital age, but different regions have also evolved to offer value to individuals and institutions alike.
Take Dubai, for example, which is now one of the world’s most attractive regions for investors from across the globe.
But why is Dubai so appealing to investors, and what are the best methods of investing in the region? Let’s find out.
Why Invest in Dubai?
If you were to ask most tourists, Dubai’s revenue is drawn primarily (and to some, almost exclusively) from oil.
While this may have been the case historically, however, the region has undergone significant diversification in recent times, with oil now comprising only a small amount of Dubai’s revenue.
Today, almost 95% of Dubai’s total GDP is non-oil based, while this number is continuing to increase with every passing year. To this end, tourism now contributes approximately 20% of Dubai’s cumulative GDP value, with this reflective of a dynamic and increasingly sustainable economic framework.
The widespread diversification of the region’s economy has created huge opportunities for investors, especially within the real estate sector.
More specifically, the first half of 2018 saw AED 111 billion-worth of real estate transactions, with this further empowered by the introduction of 10-year visas for investors and widespread spending in the city.
What’s more, there are no property taxes at all in Dubai, nor is capital gains tax applied to specific investments and assets. In fact, once a property has been procured, the owners won’t pay any additional taxes in the future, so this type of investment is far more profitable over time.
How to Invest in Dubai
While Dubai’s various markets may offer inflated returns on investment (the location recently reached the top of the ‘hybrid’ cities for real estate investment in JLL’s “World Cities: Mapping the Pathways to Success”), the question that remains is which markets and asset classes offer the best value to investors?
Aside from real estate and currency trading, one of the best investment markets in Dubai is stocks and equities. In fact, this is arguably the first option that springs to mind when discussing investments in the region, particularly when targeting contracts for difference (CFDs) that allow for more speculative trading.
You can use CFDs to target indices such as the Nasdaq Dubai, for example, which provides a measure of the leading tech stocks in the region.
The Dubai Financial Market (DFM) is another viable option in this respect, with such entities enabling you to instantly diversify your investment portfolio, minimise your exposure to risk and eschew the need to own underlying instruments.
Fixed-income products like bonds offer a viable option for more risk-averse investors too, with these delivering incremental and reliable returns (especially those issued by governments).