Business Opportunities in Dubai
Dubai is a city and emirate located in the United Arab Emirates (UAE). The city, originally established in the 18th century as a small fishing village, has grown to become the most populated city in the UAE in the 21st century. It is one of the world’s most popular tourist destinations for shopping, culture, and sightseeing and is home to the Burj Khalifa, the tallest building in the world. This city has become known for not only its tourism, luxury shopping, and modern architecture, but has also become an epicenter of incredible investment and business opportunities.
Sovereign Wealth Funds: an Introduction and Their Place in Dubai
Sovereign wealth funds (SWFs) are government-controlled pods of assets that are designed to invest and engage in foreign investments. The Investment Corporation of Dubai (ICD) is a major sovereign wealth fund of Dubai’s government established on May 3, 2006. The ICD is charged with managing the Government of Dubai’s portfolio of foreign investments and commercial companies. In 2019, the ICD reported assets worth $305 billion and a revenue of $62 billion.
How do Sovereign Wealth Funds ensure that their portfolios remain healthy and robust and growing? And how to they recover money when their assets decline in value as the market can be very volatile. These are important questions and there are a few ways to ensure that your fund recovers all monies lost both by filing claims and through strategic litigation, but all of this begins with the process of “portfolio monitoring”. Portfolio monitoring is an essential and important tool for funds to utilize and refers to the way in which the critical performance metrics are collected, monitored and tracked across the portfolio companies and the active funds. As a Sovereign Wealth Fund (or any investor), the goal is to maximize returns on investments. When any company engages in fraudulent activity which causes its value to decrease, investors lose money. Fortunately, there are legal options to recover these monies lost. At my law firm, we work with institutions around the globe to protect investments and increase recoveries in ways that require little work on the part of our clients but provide the benefit of putting money back into the fund’s portfolio and ultimately increasing the overall value of the fund’s portfolio. Portfolio monitoring services are free of cost and obligation.
UAE-US Economic Relationship
The United States (“US”) and the UAE enjoy a strong investment and trade relationship. This bond is one of the fastest-growing US economic partnerships. In 2020, the US had over an $11 billion trade surplus with the UAE, making it the US’ fourth largest trade surplus globally. Perhaps a reason for this relationship is the fact that the UAE has one of the most open economies in the world. Its economic partnership with the US displays the UAE’s role as a leader in foreign investment and trade and economic reform. In addition, the UAE and US came together to form an Economic Policy Dialogue (EPD) in 2012. The EPD acts as a platform to develop plans to strengthen the relationship between the two countries in terms of economics, trade, and commerce.
In recent years, the amount of US exports and foreign investment into the UAE has increased greatly and is predicted to continue growing in years to come. In fact, the UAE has trade relations with every US state, including Washington D.C., the Virgin Islands, and Puerto Rico. The UAE has grown to be this country’s largest export market in the Middle East.
Free Zones: a Way to Attract Foreign Investors
Dubai has attempted to attract foreign investments throughout the 21st century. For example, the city has established “free zones” that allow foreign companies to operate out of Dubai without needing a local partner. Business licenses are offered to foreign-owned businesses, and each free zone is designed around one or more industry categories (trading, services, industrial, etc.) and only offers licenses to companies within those categories. There are over 30 free zones operating in Dubai and these zones have been successful in bringing in foreign investors and business opportunities in Dubai.
Investment Opportunities in Dubai
Invest in Real Estate:
As the most populated city in the UAE, Dubai has become a hotspot for property investors. Why invest in Dubai property? There are a few enticing reasons: the city offers higher rental yields than many other markets, property price per square foot are typically lower than many other cities across the globe, and tax conditions are quite favorable.
One of the primary factors in choosing an investment property in Dubai is, as Harold Samuel said it best, “location, location, location.” While the city itself is in a great location for investment opportunities, some of the best locations to invest are spots near offices, business hubs, landmarks, or tourist spots. Places that have been recently recommended for investment include the following:
As the name suggests, Business Bay is Dubai’s prime business center located in the middle of the city.
This location is where the Buri Khalifa stands and is also home to one of the world’s largest malls, the Dubai Mall. Downtown Dubai attracts millions of visitors and tourists each year, making it a great place to invest in property.
Dubai Sports City:
Sports fans rejoice! A tourist attraction since its establishment in 2003, Sports City hosts academies in football, rugby, golf, swimming, and more. The location is also fantastic because of the fact that it is only a short drive away from the newly-launched Expo 2020 pavilion, which is expected to attract millions for its six-month expo taking place from October 2021-March 2022.
Barsha Heights (formerly known as “TECOM”):
Barsha Heights is home to multinational and Fortune 500 companies such as BBC World, HP, CNN, CNBC, Microsoft, and more. Among these big businesses are plenty of residential buildings and hotels as well.
Invest in Dubai’s Successful Financial Market
Common ways to engage in the city’s financial market are through stocks, bonds, mutual funds, and even gold. Of course, there are pros and cons to each of these options, with a common pro being, that with the exception of stocks, most are low-risk to investors:
- Stocks: Stocks are popular because they remain affordable and accessible to anyone willing to learn the ins-and outs of the market and ride the highs and lows. What makes stock investment a great option is the fact that they are available to all-anyone can invest no matter how much (or how little) they can afford.
- Bonds: Bonds are also a preferred method of investment because they come with little risk. A bond is a debt instrument that a company issues to investors and pay out interests. There are some laws in Dubai that impact the bond market, but one can still invest in bonds starting at 100 dirhams, or $27.23 U.S. dollars.
- Mutual Funds: Mutual Funds often provide a lower risk investment opportunity and allow for diversity of investments. The setup is simple: fund managers pool money from the investing public and use that money to buy stocks, bonds, and securities.
- Gold: Gold is not only glamorous and beautiful to wear, but is also a great investment opportunity. When investors decide to purchase gold, it is recommended to work with a reputable company to complete the transaction. Investing is more than just making an initial purchase-you will want help from a company that provides relevant services such as bullion selection, storage, and gold savings accounts. See here for a list of reputable companies and factors to consider when investing in this precious metal (Investigate these companies on your own and only use this list as a guide and roadmap).
Business Opportunities in Dubai
Dubai is a booming city for businesses, many which are worth investing in. Big businesses, travel agencies, recruitment agencies, local retail businesses, and online businesses…the list is endless. Not only do these various businesses present a great investment opportunity, but they also provide business opportunities in themselves.
Dubai’s Impact on the Global Business Landscape
The Forbes Global 2000 list ranks the world’s 2,000 largest and most profitable publicly traded companies. Forbes list takes into account a multitude of factors, including the revenue, net profit, total assets and market value of each company; each factor is given a weighted rank in terms of importance when considering the overall ranking. The 2019 list includes five Dubai-based companies that have generated billions in revenue-displaying that just one city can bring in billions on its own. Successful businesses on this list include Emirates Group (ranked #510, 6.9 billion in revenue), Emaar Properties (ranked #827, 7.1 billion in revenue), DP World (ranked #851, 5.6 billion), Dubai Islamic Bank (ranked #926, 3.1 billion), and Mashreq (ranked #8, 2.7 billion). While some of these names may not be familiar to us on the other side of the globe, their impact on the global economy cannot be overlooked.
Online Business Opportunities
We currently live in a digital society, as all aspects of life now seem to comprise of some virtual aspect. While there are downfalls to a heavy reliance on technology, a shift to virtual living does give foreign investors an incredible opportunity to get involved with Dubai markets and economics without even having to physically be there. Online opportunities are endless and include things such as digital advertising, e-commerce, website/social media development, marketing, Information Technology (IT), Search Engine Optimization services (SEO), and the fairly new area of drop shipping businesses. It has never been easier to engage with foreign business practices than now.
Foreign Investments and Potential Claims: When and How to litigate?
Any time you are investing, there may arise a situation where you have to bring a claim. The difficult in this lies in the when your investments are overseas, there will be jurisdictional and choice of law questions that require analysis by a professional. Deciding how, when, and where to bring your claim can seem daunting, but it doesn’t have to be. Atara Twersky, Esq. Has been doing this kind of work for many years and is a skilled professional who is here to help guide you through the process of your foreign claims and address any concerns you may have in investing abroad.
In conclusion, Dubai acts as a great example of a new city that continues to grow and develop rapidly due to its role in economics, foreign investments, and business opportunities. Investing globally has never been easier-if you are interested in investment and business opportunities abroad think about Dubai and listen to my podcast here with ______________ who lives and works in this wonderful City.
Atara Twersky, is of counsel at AF&T. Atara is also the bestselling author of the children’s book series, Curlee Girlee, inspired by her own young curly haired daughter and written for all curly girls in an effort to ensure they love themselves and their hair exactly as it is, understanding that their hair is part of a greater legacy they share with those who came before them. You can find out more about Atara here. Listen to other podcast episodes Pension Trends Plus with Atara Twersky here or wherever you listen to your favorite podcasts!
 “Dubai Wealth Fund Readies Bonds, COVID-19 May Hit Revenue.” The Economic Times. October 19, 2020. Accessed May 04, 2021. https://economictimes.indiatimes.com/news/international/uae/investment-corporation-of-dubai-hires-banks-for-dollar-bonds/articleshow/78743529.cms?from=mdr.
 “Dubai’s Sovereign Wealth Fund Posts Record $63bn Revenue in 2018.” Arabian Business. June 26, 2019. https://www.arabianbusiness.com/banking-finance/422881-dubais-sovereign-wealth-fund-posts-record-63bn-revenue-in-2018
 UAE Embassy in Washington, DC. Accessed May 04, 2021. https://www.uae-embassy.org/uae-us-relations/key-areas-bilateral-cooperation/uae-us-economic-relationship.
 “United in Prosperity.” UAE & USA: United for a Better Future. Accessed May 04, 2021. https://www.uaeusaunited.com/category/united-in-economic-cooperation/.
 “US Exports to the UAE.” UAE Embassy in Washington, DC. Accessed May 04, 2021. https://www.uae-embassy.org/uae-us-relations/exports-us-states-uae.
 “What You Need to Know before Buying an Investment Property in Dubai.” Property Finder Guides. October 13, 2019. Accessed May 04, 2021. https://www.propertyfinder.ae/guides/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai/.
 Expo 2020 Dubai UAE. Accessed May 04, 2021. https://www.expo2020dubai.com/en.