- Personal Finance
Learn More About: Why is UAE a Safe Haven for Your Money?
Nobody wants to take risk when it comes to investment. Yes, why take risk in investing your hard earned money. Rather, invest it in such a place which will provide you assured returns in future. Well, leaving aside the popular investments tools, there is a place which provides ample investment opportunities and help you grow your capital. Yes, the United Arab Emirates is one such country that can help you add more value to your savings by providing a strong sense of economic protection.
Now, what is safe haven asset?
Normally, the term safe haven used to refer to those asset which retain its value even during the time of economic crisis. Safe haven assets are considered as secured asset and they are the preferred choices of many wealthy investors who want to protect their investments against any kind of market instability or economic crisis. Assets like Gold and United States Treasury Bills are some examples of safe-haven assets because their market value hardly go down during the time of market fluctuations.
Factors that turn the UAE into a Safe Haven for You
Like Gold or United States Treasury Bills which are considered as safe haven assets, the United Arab Emirates has also turned itself into a safe haven with the course of time. It is because the country has been receiving a considerable inflow of capital and deposits since the last century during times of global economic crisis. In the last century, a huge amount of capital came to the UAE from different parts of the world searching for a safe haven. The same situation occurred in 1971 when a number of businessmen residing in the African countries shifted their capitals and deposits to banks in the UAE to protect them against economic crisis.
So, what are the factors that help the UAE acquire its safe haven status and retain it so far? There are a number of factors involved in this whole process of turning the country into a safe haven which include political security, economic security, low taxation, healthy entrepreneurial climate, best-in-class infrastructure and many more.
Because of its healthy political situation, the UAE has turned into one of the most preferred destinations of many wealthy investors across the globe who set up home there and invest in local and international business endeavors. The political disorder that affected the Arab world could not affect the lifestyle of people of people living in the UAE. The UAE still has an open and tolerant society and maintains a high standard of living. Because of its stable political system, the United Arab Emirates is in advantageous position to attract investors from different corners of the world.
The United Arab Emirates has acquired the status of safe haven by offering tremendous investment opportunities. Its stable economy, well-maintained financial system and great infrastructure – they all play a significant role in making the UAE a safe haven for investors. Many investors from conflict ridden areas of the region have started investing their savings in the UAE.
Recently, the UAE Government permitted its national banks to accept foreign deposits regardless of any amounts. Following this move, it is expected that the country will witness a big success in acquiring foreign deposits, adding to its safe haven status.
Another important factor that adds to the UAE’s safe haven status is that the country allows foreigners to invest in real estate. There are many districts in Dubai where real estate business is run by foreigners. Such foreign investments in local businesses can really accelerate the growth of real estate industry. Such liberal residency rules can play a major role in making the UAE a safe haven for all.
Almost 65% of wealthy individuals residing in the UAE say that it is the strong sense of economic security provided by the country that motivates them to choose the country as their ultimate destination for stay and investment. Besides, the UAE Governments has also focused on improving its healthcare system, travel and tourism and the education systems so that both UAE residents as well as non-UAE residents can lead a comfortable life.
Because of its stable economy, banks in the UAE can afford to provide various loans at cheap rates of interest who need it. Banks would be able to continue the same, as long as the country retains its safe-haven status.
Another factor that has turned the United Arab Emirates into a safe heaven is the country’s tax system. The UAE government charges very low tax from its employees as well as investors. This is a great benefit for the investors who don’t have to pay high tax on their investments in the UAE. The government has created a very business friendly environment for investors.
Another key factor that makes the UAE safe haven for investors is its best-in-class infrastructure. Besides, a lot of new trades, infrastructure development and hospitality projects have started to develop in the UAE adding to the country’s economic growth. In the recent time, Dubai witnessed a lot of positive changes and the city has been ranked as one of the major top 10 cities in the world. Besides, Dubai’s geographic proximity to the rest of the world is another important factor that adds to its safe haven status.
Role played by Dubai in making the UAE a safe haven
In fact, Dubai plays a major role in turning the UAE into a safe haven for many. The city is always open to all sorts of new business opportunities. The city has created a heathy business environment which enables you to invest in various trades and get assured returns on your investments. And the most important thing is that the city does not overtax its residents and foreign investors. Thus, Dubai creates a lot of profit for itself as well as for its investors. The city has a service-based economy. Besides, Dubai is a popular holiday destination for many Indians and Russians and. In fact, many Russians and Indians have bought properties in Dubai and started their own business Not only the city offers enhanced economic protection, but it also offers a lot of growth opportunities. The Dubai Government always extends its helping hand to those investors who want to invest there and settle permanently. Also, its tolerant cultural outlook is another determining factor that turns the UAE a safe haven.
Apart from the above discussed key factors that have helped in turning the UAE safe haven for people/investors across the globe, there are instances when more than 200 refugees coming from Iraq and Afghanistan received temporary shelter in the UAE. Although, this is not an act of economic protection, it is another way of providing protection that adds to the country’s safe haven status.
Thus, it is noticeable that the exceptional growth in the following sectors - real estate, travel and tourism, aviation, hospitality, manufacturing, banking and finance has encouraged many investors to invest in various business ventures the UAE. Since, the United Arab Emirates has outperformed other counties by providing economic security, political security, international growth opportunities and strong tax benefits, undeniably the country is a safe haven for you and your savings.
The UAE, especially Dubai has become a safe haven for wealthy people coming from China, India and Russia since 2011. As they are not satisfied with the economic and political scenario back home, they have invested their savings in the UAE. Thus, the United Arab Emirates has retained its safe haven status intact by welcoming a lot of capital inflow and protecting them against all kinds of instabilities.