Where to invest as an expat in Dubai
Whether you’re an expat living and working abroad, or an expat in retirement looking to build an investment portfolio to fund your lifestyle, making safe investments can be challenging.
Unless you have been living in a new country as an expat for years, the chances are that you won’t understand the market well enough to make smart, low-risk investments, and on the other hand, investing in your native country may be too expensive or hard to obtain access.
Below, is a guide outlining some of the core areas for expats to invest in:
Think long-term
Before investing in your country of residence, you should consider your long-term plans and decide whether you’re going to return to your home country in a few years’ time. As an example, if you live in Dubai for work but hope to return to the United Kingdom in your retirement, you may want to consider investing in long term savings structures and Investment accounts to grow your money. One of the key considerations, however, is managing currency risk, and weighing up exchange rates to maximise your investments.
Understand taxes
Although investments in the UAE are not taxed, you should consider taxation in other nations if you’re planning to invest internationally. Interest and dividends from mutual funds, hedge funds, cash management products, and foreign pension plans may be taxed when you try to bring the money back to your country of residence. Offshore bonds are a good way that you can invest your money to mitigate different types of tax such as inheritance tax on holding over $60,000 of US stock. As well as this, you can use things like ‘top slicing’ and ‘gross roll up’ to take advantage of the years you are living in cities like Dubai (with no income tax); to help mitigate this when you return back in countries like the UK (with high tax rates). However, the benefits of these are best discussed with a financial adviser.
Pension plans and investment accounts
For expats in Dubai, securing a comfortable retirement often involves strategically investing in pension/savings plans and various investment accounts. Lifestyle creep can catch a lot of people out in Dubai so it is important to save for the future. Several international pension plans are available that cater to the needs of global professionals. These plans allow expats to contribute regularly in a diversified portfolio for their retirement. Additionally, expats can open investment accounts with advisory firms, which offer a range of investment options, including mutual funds, stocks, bonds, and ETFs. These accounts provide the flexibility to build a diversified portfolio tailored to individual risk appetites and financial goals. By taking action on these investments, expats can ensure they have mapped out their retirement.
Private Equity and Credit
For expats in Dubai who are looking to diversify their investment portfolios, private equity and credit investing offer lucrative opportunities. Private equity involves investing in privately held companies, providing capital in exchange for equity stakes, often resulting in high returns upon the company's growth or exit. Meanwhile, private credit investing involves lending capital to companies, usually through high-yield bonds or direct loans, and earning interest income. Both options can be access by speaking with an expert in this area. These types of investment offer expats the potential for significant returns however, they often come with higher risk. These investment strategies allow expats to leverage their capital in ways that can lead to substantial long-term financial growth. Speak with one of our team today to find out more regarding these opportunities.
Real Estate
For expats seeking property investment opportunities in Dubai, the real estate market offers numerous lucrative opportunities. Dubai's dynamic property market features a wide range of options, from luxury villas and high-end apartments to affordable housing units. Popular areas such as Downtown Dubai, Dubai Marina, and Palm Jumeirah are particularly attractive due to their high rental yields and strong potential for property value appreciation. Additionally, investing in off-plan properties can provide significant discounts and flexible payment plans, making it an appealing option for many investors. Commercial properties in business hubs like Business Bay and DIFC (Dubai International Financial Centre) also present excellent opportunities for high returns. By strategically investing in Dubai's real estate market, expats can benefit from the city's economic growth and secure substantial long-term financial gains. The key is to always diversify your investments across a number of different opportunities.
Whole of Life Insurance
Whole of life insurance offers expats in Dubai a dual benefit of lifelong coverage and an attractive investment opportunity. This type of insurance provides a death benefit to beneficiaries while also accumulating a cash value that grows over time. The cash value component acts as a savings or investment vehicle, allowing policyholders to build wealth tax-efficiently. Premiums paid into whole of life insurance policies are invested in various financial instruments creating an encashment value. These differ from your standard term assurance policies as at the end of a term assurance, the value is lost. Additionally, the cash value can be accessed through loans or withdrawals, offering flexibility for future financial needs. For expats seeking a reliable way to secure their family's financial future while also growing their wealth, whole of life insurance is a compelling option. It is best to consult a financial advisor who can tailor a plan to your needs.
Tips for Expats Investing in Dubai
Understand Local Laws and Regulations: Familiarise yourself with the UAE’s investment laws and any restrictions that are in place for the county
Diversify Your Portfolio: There are many ways to make money. The key is to make sure you are diversified.
Seek Professional Advice: Consider consulting with financial advisors or investment experts to make informed decisions.
Stay Informed: Keep up with market trends and economic developments in Dubai.
Conclusion
There are many investment opportunities that can be taken advantage of as an expat, the key is to stay diversified and picking the correct opportunities that align with your goals and objectives. Consulting a financial advisor can provide great benefit over the long run as some of the biggest savings you can make will be in the tax and inheritance tax planning that can be taken advantage of while you are outside of countries like the UK. Always remember to make sure that you understand that product and opportunity that you will be investing in along with it’s benefits.
For more information and personalised advice, book a one on one meeting with one of our financial experts today. Book in now to speak with an adviser
Disclaimer: This blog post is for informational purposes and should not be considered financial advice. Always consult a financial adviser for personalised guidance.
