A strong economy, favourable tax environment, and seamless access to international markets make the United Arab Emirates (UAE) one of the most attractive investment destinations.
The UAE offers both long-term and short-term opportunities to grow your wealth, whether you’re an expat living in the UAE or an international investor looking to capitalise on UAE-based assets.
In this guide, we’ll help you identify the best investment in the UAE for expats by exploring the most popular options. We’ll also provide steps and best practices for selecting the most appropriate investment opportunity according to your goals and risk tolerance.
What You Will Learn
- Can you invest in the UAE if you’re a UAE non-resident?
- What are the best investment options for expats in the UAE and Dubai?
- How do you select the best UAE investments based on your investor profile?
Can Non-Residents Invest in UAE and Dubai?
The United Arab Emirates, particularly Dubai, is among the most accessible investment destinations for expats and non-residents. With minimal paperwork, you can invest in stocks or start a local and international trading business.
For instance, you can establish a company with 100% ownership in the UAE free zone—an economic area exempt from value-added tax (VAT), corporate tax, and customs.
What Are the Best Investment Options for Expats in Dubai and UAE?
The Emirate of Dubai, or better yet, UAE as a whole, does not impose capital gains or income tax on investment income, making it a highly tax-efficient jurisdiction for investing in various assets. The best investment options in UAE and Dubai include:
- Real estate
- Stocks
- Mutual funds
- Exchange-traded funds (ETFs)
- Bonds
- Gold
Real Estate
Foreign nationals are allowed to purchase property in the UAE, with full and permanent ownership rights available in designated freehold areas. You can sell or rent out such real estate without restrictions. Popular freehold areas include Dubai Marina and Downtown Dubai.
Additionally, there is an option to invest in property outside freehold areas at lower prices. In such instances, you would purchase leasehold properties that function like long-term rental investments. This arrangement entails buying the right to reside in a property for a fixed period—typically 99 years—without owning the land it stands on. Renovating or subletting such property may be subject to the owner’s approval.
Purchasing real estate worth at least AED 750,000 grants you a two-year renewable residency visa. Meanwhile, investing over 2 million dirhams in property qualifies you for a ten-year Golden Visa.
There are three primary ways to invest in real estate in the UAE:
- Flipping the property: Buying real estate in sought-after locations, renovating it, and selling it for a profit.
- Becoming a real estate developer: Purchasing land, developing residential or commercial property, and selling it for a return.
- Renting out a property: Buying or developing a property and renting it out on a monthly, quarterly, or yearly basis.
Pros and Cons of Investing in UAE Real Estate
The average annual return on property rentals in Dubai was around 5.27% in 2024, with even higher yields in prime locations like Dubai Marina and Palm Jumeirah. These rates, combined with the absence of property or rental income tax, can provide a steady source of passive income.
A potential disadvantage is that managing property can be demanding, and generating substantial returns from this investment often takes time and patience.
Stocks
Investing in stocks—a portion or share of ownership in a company—is one of the most popular investment strategies in the UAE.
When you invest in stocks, you gain the opportunity to receive dividends, which represent portions of the company’s profits shared among shareholders. The amount of money you’ll receive depends on the number of shares you own and the company’s performance.
If the shares you purchased appreciate in value, you can sell them on the stock market at a higher price to earn a tax-free capital gain.
The UAE has three principal stock exchanges:
- The Dubai Financial Market (DFM)
- The Abu Dhabi Securities Exchange (ADX)
- Nasdaq Dubai
While UAE stock exchanges are relatively small by international standards, the DFM had the fifth-best index performance in 2023 globally. This reflects the UAE’s rapidly expanding stock market, which is projected to grow at an annual rate of 19.33% by 2025.
Pros and Cons of Investing in UAE Stocks
No taxes on capital gains and dividends, historically strong market performance, and diverse investment opportunities are some of the benefits of investing in the UAE’s stock market. Additionally, the country has streamlined investing for expats and non-residents, enabling them to access the stock market easily through brokerage firms or online trading platforms.
On the other hand, stock investment carries inherent risks due to price volatility. For instance, you could lose money in a short time span if the stock’s value diminishes quickly. It also requires careful research and analysis of the companies whose equity you wish to purchase.
Working with experts is recommended to mitigate the risks associated with stock investing and maximise potential returns. At Titan Wealth International, our expat investment specialists can help you develop an investment strategy tailored to your financial goals and risk tolerance. Besides access to qualified professionals, you’ll also benefit from ongoing investment portfolio analysis, monthly performance reports, and transparent fees.
Mutual Funds
Mutual funds are investment vehicles that pool money from multiple investors and use it to build a diversified portfolio of stocks, bonds, or other assets. They are managed by experts who select securities aligned with the fund’s investment strategy and purchase them on your behalf. In exchange, the fund managers receive a percentage of the fund’s assets to cover their management expenses.
In the UAE, you can invest in local mutual funds. Over 30 mutual funds are registered with the Securities and Commodities Authority (SCA) and are domiciled in the UAE. These funds may invest in a diversified range of securities, including those listed on local exchanges such as the Dubai Financial Market (DFM), Abu Dhabi Securities Exchange (ADX), and NASDAQ Dubai.
In addition, many of these UAE-registered funds offer exposure to international markets, including securities traded on global exchanges such as the New York Stock Exchange (NYSE) and NASDAQ. This provides investors with broader geographic diversification while remaining within the regulatory framework of the UAE.
These funds typically distribute income—such as dividends or interest—on an annual basis, depending on the fund’s policy. While mutual fund units can be sold (redeemed), they are not traded in real time like stocks. Instead, redemptions are processed at the fund’s net asset value (NAV), which is calculated after the market closes—usually around 2:44 PM UAE time.
Pros and Cons of Investing in UAE Mutual Funds
Mutual funds let you diversify your investment portfolio and increase the potential for higher returns by investing in a variety of securities instead of one. They are professionally managed and often tailored to various risk tolerance levels.
Meanwhile, it’s essential to consider the following disadvantages of investing in UAE mutual funds:
- Unlike stocks or ETFs, mutual fund transactions are executed at the end of the trading day, based on the fund’s net asset value (NAV). While this means you cannot buy or sell units during market hours, the liquidity remains comparable—though settlement may take an additional day.
- Before investing, you must satisfy the minimum investment requirement, which ranges from $500 to $3,000.
Exchange-Traded Funds (ETFs)
Similar to mutual funds, exchange-traded funds (ETFs) are pooled investment vehicles containing various securities. However, you can buy and sell ETFs on the stock exchange during trading hours. ETFs are primarily passively managed, meaning they aim to mirror the performance of a stock market index instead of trying to outperform it.
The iShares MSCI UAE ETF (UAE) is a US-listed exchange-traded fund that tracks the performance of approximately 40 equities listed on UAE stock exchanges, including the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX). It offers investors targeted exposure to the UAE market across a range of sectors and company sizes.
Pros and Cons of Investing in UAE ETFs
Investing in ETFs in the UAE offers several advantages:
- Lower costs than mutual funds since they’re passively managed (although actively managed ETFs exist).
- Mandatory public disclosure of ETF holdings to ensure transparency.
The primary drawback of investing in ETFs is that they may not perfectly replicate the performance of their underlying index due to management fees, transaction costs, and cash drag (uninvested cash in the portfolio).
Bonds
Bonds are fixed-income securities or debt instruments issued by the UAE government (treasury or municipal bonds) or private companies (corporate bonds). When you invest in a bond, you lend money to the government or a company, and they commit to repaying the principal amount with interest.
You usually receive interest payments twice a year, while the principal amount is repaid once the bond matures. The maturity period can range from one to 30 years, depending on the terms agreed upon between you and the issuer.
Pros and Cons of Investing in UAE Bonds
Investing in bonds in the UAE comes with the following benefits and drawbacks:
| Bonds Benefits | Bonds Drawbacks |
|---|---|
|
|
Gold
Gold is a popular safe-haven investment option, likely to maintain or increase value during economic downturns or high inflation. Due to its low correlation with stock and bond prices, investing in gold may reduce the overall risk of your portfolio and provide balance amid periods of market turbulence.
There are five ways to invest in gold in Dubai and other Emirates:
- Gold bullion: Buying physical gold in the form of bars or coins at Dubai Gold Souk.
- Gold stocks: Purchasing shares of gold mining companies.
- Gold ETFs: Buying a share in an ETF that exposes you to gold stocks or gold bullion held by investment companies.
- Gold mutual funds: Purchasing shares in a gold mutual fund with investments in gold stocks or physical gold.
- Gold futures and options: Buying a contract that lets you purchase or sell gold at a future date (gold futures) or a contract that gives you the right to purchase or sell gold in the future without the obligation to do so (gold options).
Pros and Cons of Investing in UAE Gold
Gold is a reliable store of value during periods of economic uncertainty or geopolitical instability when traditional markets tend to underperform. Due to its universal value, it is a highly tradeable and liquid asset across different economies and financial systems.
The main downside of investing in gold is that it doesn’t generate a regular passive income like stocks and bonds. Additionally, buying physical gold may expose you to delivery, security, storage, and liquidity issues.
How Do I Choose the Best Investment in the UAE for Expats?
Before you start investing in UAE assets, you should take the following steps:
- Consider whether you want to invest in short-term assets (like municipal bonds) or long-term assets (like real estate).
- Assess whether you’d prefer investing in low-risk assets with fixed returns or high-risk assets that offer the potential for greater returns but also carry the risk of financial loss.
- Compare investment options by considering factors like cost, returns, and time before the investment becomes profitable.
To ensure you choose the investment option that best suits your needs, it is advisable to seek guidance from a professional expat investment adviser.
Key Takeaway
While the UAE is an attractive market for expats looking to achieve substantial returns on investment, it’s crucial to carefully evaluate the available investment options and select those that best align with your investor profile.
In this guide, we’ve outlined the best investments in the UAE for expats, explaining their key characteristics and highlighting their pros and cons. We’ve focused on the most popular investment options like stocks, bonds, mutual funds, ETFs, real estate, and gold.
We’ve also provided best practices for choosing the most suitable investment for your financial planning needs.
At Titan Wealth International, our team of expert investment advisors can help you define your goals and build a sustainable and high-performing investment portfolio. We provide personalised advice to ensure every aspect of your investment plan is tailored to your unique needs and objectives.
