How The UAE Has Become A Prominent Investment Hub For Asian Investors

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UAE continues to rank among the fastest-growing economies that offer great investment opportunities around the globe. Specifically, the UAE is considered a major investment hub for Asians, and over the past years, the rate of Asian investments into the UAE has increased substantially. 

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The Dubai International Financial Center (DIFC) announced that it expects to double the number of companies there, mainly by serving as an investment base for businesses with China-South Asia and Africa. DIFC is the one that promoted key initiatives for Dubai’s new phase of growth and in becoming an investment hub that now rivals the world’s best. 

Among these businesses, UAE outstands as an ideal investment hub for Asians, especially compared to investors from other regions. When considering this significance among Asians,  many vital drivers tend to have contributed to pushing the UAE to this position. 

Convenient geographical location 

One of the most significant drivers that have made UAE a prominent investment hub in the UAE  is the geographical location or perhaps the location advantage. Location advantage is a crucial factor determining manufacturers’ accessibility and provides them with cost benefits to Asian investors compared to other regions around the world. For example, as the UAE shares its borders with Saudi Arabia, Qatar and Oman, investors can easily merge with other countries. 

For decades, the UAE has been a great destination that connects the East and the West. This easily encourages trade between the UAE and the other countries for Asian investors, making the UAE stand out as an ideal hub for their investments. The geo-centric location also continuously provides Asian investors with the opportunity to maximize production and trade efficiencies by applying specific cost reduction methods. 

Furthermore, over the years, UAE has capitalized on its great location by building ports, roads, and airports to connect the world and trade between, which has been attracting Asian investors’ attention until now.

Ease of doing business 

The world bank ranks economies based on their ease of doing business by considering ten areas of the business life cycle which are starting a business, dealing with construction permits, registering property, connecting electricity, securing credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The UAE ranks 16 out of 190 countries in the World Bank Group’s 2020 Ease of Doing Business report.

A high ease of doing business means that the regulatory environment is more conducive to start and operate a firm in the region. This has been consistently attractive to Asian investors who are driven by a complex regulatory environment for investments and doing business in their countries. This ease of doing business, added with the convenient geographical location of UAE, are two of the key drivers that have made UAE a prominent hub for Asian investors. 

Attractive real estate sector 

It’s no surprise that Asians love property assets, and it’s something that has been a part of every Asian culture to pass down properties to generations. However, several challenges plague the Asian real estate market. Financial instabilities and tax rates have made real estate very expensive in most Asian countries. In contrast, the UAE attracts huge investments from Asian countries, especially China and India, due to its diverse investment options and appealing environment for real estate business. 

Chinese are the seventh biggest property investors in Dubai. Dubai real estate is way cheaper than in most Asian countries. Even if you take Burj Khalifa, the world’s tallest building in Dubai of more than 160 stories, most of its apartments is owned by Indians. Generally, in India, investing in real estate comes with several challenges like trade unions and land restrictions, which are similar challenges in most Asian countries. This is also a principal reason why Asian businessmen look to invest in Dubai.

If you’re looking for the right advice on investment options in the UAE that assures greater yields, reach out to us at AIX Investment Group. Our financial advisors can assist you with decisions based on your risk tolerance and objectives.

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