Why Choosing a Financial Planner is Mandatory in the UAE ?
The UAE offers a number of advantages for long-term savings and investments. During times of financial insecurity, it secures and protects your loved ones. Furthermore, it ensures that you and your family can enjoy every moment of the future that you have planned.
Saving money is insufficient to achieve your long-term objectives. When it comes to saving money, most people put a tiny percent of their total earnings into an interest-bearing savings account. Banks provide as a safe haven for cash, but the interest rates on offer are modest. Savings bank accounts provide a low return on investment, making it harder to achieve long-term objectives. Allocating your money into specific investment plans, methods, or goods with the goal of multiplying and developing your capital is known as investment in the UAE.
It's never too late to start investing, whether you're in your early twenties and just starting to make money or in your late fifties and intending to retire. Although investment in the UAE entails a higher level of risk than savings, the profits delivered by investments are significantly higher. With tiny lump cash in your bank account, you can begin investing.
Why should you make Investment in UAE?
The following are five reasons to invest in the UAE.
STABILITY IN POLITICAL SPHERE
Despite regional concerns, the UAE remains politically stable. Emirate rulers are proactive and concerned in day-to-day governance. The UAE also enjoys excellent financial and monetary stability. In its well-developed, sophisticated banking system, there are considerable loan facilities and enough liquidity.
BUSINESS SIMPLICITY
UAE can be denoted as a rising business hub for Entrepreneurs who are willing to start their own business. It is so because the procedure is hassle free. Whether you want to get a business loan or want approvals regarding any work related aspects of your business. The framework as well as the government is not tedious and supports new business ventures and potential investments.
TAX FREE
Although there is no income tax in the United Arab Emirates, the minimum VAT (Value Added Tax) on the purchase of certain services and goods is 5%. Corporate taxes are only enforced on energy firms and foreign banks. Excise taxes are levied on things that are harmful to the environment or human health.
AN EXPANDING ECONOMY
When a person decides to invest in a foreign country, one of the most important aspects to consider is the country's economic growth. The amazing thing about Dubai right now is that all stats and data indicate that the city will continue to grow economically in the next years.
HOUSING DEMAND
Investing in the UAE, particularly in Dubai, could provide buyers with a good opportunity to multiply their fortunes in the near future, as the country prepares for a massive influx of tourists over the next decade.
Most prominent Investments in UAE
There are numerous investment possibilities available; nevertheless, an individual should select an investing instrument based on their needs, as well as their long and short-term objectives. The following are the most important investment tools.
MUTUAL FUNDS
If you don't have time to undertake your own research to find the best stocks, or other minor investment possibilities to put your money in, you might want to consider mutual funds. By choosing this option, you will benefit from the skills of a fund manager, who will do the legwork for you, such as selecting the correct securities or stocks and bonds to help your money grow. The good news is that you don't need hundreds of thousands of dirhams to begin investing.
Mutual funds in the UAE are a solid investment option for diversifying an investor's financial portfolio. Investing in top mutual funds will help you maintain and grow your wealth over time. Investors benefit from advanced portfolio management, dividend reinvestment, convenience, risk reduction, and reasonable pricing.
NATIONAL BONDS
It is a good idea to invest in national bonds, granted the stability, liquidity, and slightly good return on investment they provide. National bonds are simple to acquire, and you may buy them online from money exchanges and banks. The smallest investment amounts to 100 AED. Even so, maintaining a minimum of AED 3000 per month is recommended in order to lower monthly payments. The holding term is three months, and the bonds can be redeemed over the counter using certain money transfers.
National bonds are clearly an excellent investment option in the UAE. People could invest a reasonable amount of money and enjoy positive results. National Bonds also offer amazing bonuses and prizes, as well as high profit margins.
GOLD
Dubai is known as the gold capital of the world. The price of gold continues to change on a daily basis. As a result, you must first study the market and then invest at the appropriate time. Gold can be sold at any time, and you can earn handsomely. It is a safe investment that will benefit you in the long run. While the price of gold may fluctuate in the short term, it has always held its value in the long run.
STOCK MARKET
When discussing investments, it is advisable to investigate, evaluate, and comprehend the market before jumping in. Stock refers to the trading of equity in various companies as the first and foremost alternative that comes to anyone's mind. Stocks appear to be the riskiest investment option of the bunch, making them unsuitable for risk-averse investors.
Stocks could be a helpful addition to your financial portfolio. It will assist you in achieving your savings goals, protecting your money from inflation and taxes, and increasing your investment income by purchasing stocks in a variety of firms.
REAL ESTATE
Real Estate in the United Arab Emirates is a well-known asset type that has attracted international investors for nearly two decades. Fingers have been burnt in what was formerly thought to be a boom-and-bust, get-rich-quick-if-you-can sector.
Many citizens believe that buying property in Dubai is a smart investment and that property prices are acceptable for investors.
EXCHANGE TRADED FUNDS
Exchange-traded funds (ETFs) are similar to stocks in that they may be purchased at low rates through a broker, and the investor can invest as many shares as they want. ETFs mix money from a variety of people to create a diverse portfolio that could include equities, bonds, and commodities. They are traded, just like bonds, and can provide a significant return.
- Lower pricing,
- instant diversification,
- tax efficiency,
- liquidity,
- sector investment,
- small-scale procurement
- Access to a wide range of options and even exotic investments are all advantages of ETFs.
BUSINESS INVESTMENTS
Expats and non-resident foreigners can establish a UAE firm with 100 percent ownership in a free zone (no local partner is required). This is a protected territory where taxes, regulations, and restrictions on manufacture, employment, and trade do not apply in the same way they do on the mainland.
In general, it is easier to establish and obtain permits for a UAE free zone corporation. Companies incorporated in Dubai are exempt from corporate tax, withholding tax, VAT, import/export tax, and capital gains tax. The UAE has signed more than 66 international double taxation treaties with significant countries such as China, the United States, and the majority of EU members. Foreigners will have easy access to local cash because there are no exchange restrictions.
Investing Strategy
Now that you know why you should invest, and what the several types of investments are, we shall now discuss how to plan for them.
- After you've saved up enough money to invest, it's usually a good idea to consult with a financial counselor, who can provide you advice depending on your current financial situation.
- The focus of your financial investing should be on your long and short-term life objectives.
- Assessing your objectives will assist you in determining how much money you will need to invest.
- Apart from focusing on your objectives, investment planning should be done in such a way that your investments in the UAE do not put a strain on your finances.
- Before beginning an investing strategy, it is critical to comprehend and analyze the level of risk associated with the type of investment chosen. High-return options are frequently associated by high levels of risk.
Creating a Profitable Investment Portfolio
Different industries and assets react to market conditions in different ways. To reduce the risk of financial losses during periods of market instability, an optimal investment portfolio should incorporate numerous asset classes. A trained investment manager can assist a person in developing a robust investment portfolio that provides financial security.
The overall balance of your investment portfolio is very likely to change with time and age rather than market conditions. Risk appetite, as well as investing and financial demands, is highly dynamic characteristics that alter as you progress through life, each needing a particular balance mechanism in your financial portfolio.
Conclusion
As the old adage goes, if you look after your money today, it will look after you afterwards. Small investments can double and expand numerous times to bring enormous benefits. Various financial investments help to build your financial portfolio and increase your overall financial security. Individuals may prepare a secure future for themselves and their loved ones by investing and making good decisions today.
