Smart investors are constantly looking for ways to improve their investment returns. They know that international investments carry good potential rewards with great diversification, but only if they invest in the right markets. You might wonder if you should invest in the Middle East, given the political instability in the news recently. Despite the turmoil of the Arab Spring and other challenges throughout the region, some countries are well-insulated from the conflict. The UAE, in particular, offers many stable investment opportunities with accelerated growth potential.
What is the UAE?
The United Arab Emirates was founded in 1971 by 7 “emirates” or Kingdoms that came together in a federation. The emirates are Abu Dhabi, Dubai, Fujairah, Ras al-Khaimah, Ajman, Sharjah and Umm al-Quwain. Each emirate is governed by a monarch called a Sheikh or an Emir. The 7 monarchs form the Federal Supreme Council with selects the leader of the UAE. The UAE has the 7th largest oil reserves in the world, according to their embassy in Washington. The UAE is one of the political, technological, and economic powerhouses of the Arabian Peninsula and the Middle East as a whole.
Business in the UAE
The United Arab Emirates has one of the best investment climates in the Middle East. Its place at the crossroads of the world makes it a world class market. It’s a relatively open economy that ranks in the top 30 in the world when it comes to economic openness. Its low tax structure means that investors keep more of their profits. In fact, for many investments taxes can be zero or near zero.
Opening a business is generally easy in the UAE and it’s encouraged. Trade and investment are the way to growth and this is respected in the UAE. This is why there are many different free zones established throughout the UAE that provide significant tax benefits.
Where are the best investments in the UAE?
While the investment climate is great throughout the country, not all emirates are the same. Dubai and Abu Dhabi are the two largest emirates and are internationally known. Many of those who are looking to invest or open businesses are flocking to these emirates. Keen investors would do well to look at the different emirates and find hidden opportunities that can pay high dividends. One such emirate is Ras al-Khaimah.
Ras al-Khaimah is not as large as Dubai or Abu Dhabi but has many great opportunities. The forward thinking Shaikh Saud bin Saqr al Qasimi is the leader of Ras al-Khaimah and has embarked on a modernization effort to increase investment opportunities to develop his emirate. In fact, the emirate has recently opened their inaugural investment forum in Ras al-Khaimah to highlight the different investment opportunities that are available.
Investments in Ras al-Khaimah
Without significant oil reserves, Ras al-Khaimah has focused on becoming the industrial and agricultural hub of the UAE. The major industries in Ras al-Khaimah are real estate, building materials, high-tech manufacturing, tourism, and agriculture. It’s noted that the most fertile soil in the UAE is found in Ras al-Khaimah.
The convergent of tourism with real estate is booming in Ras al-Khaimah. There is an estimated shortfall of 10,000 hotels rooms in the emirate and development will need to rise to these demands. This is one area with the potential for high returns.
Investment Climate in Ras al-Khaimah
The investment climate in Ras al-Khaimah is quite liberal for foreign investors. His Excellency Shaikh Saud bin Saqr al Qasimi has made it a point to ensure that laws are passed to encourage international investment. If they operate in a free trade zone, they can pay zero taxes on their productive activities. A company formed under the international company provisions is limited to dealing only with foreign clients but they receive many benefits such as zero tax on profits, employment visas, and tax-free investments. They can also own property in free trade zones and get mortgages on their property. It’s very positive investment climate.
The answer to the question Should I invest in the Middle East is an easy one to answer and the answer is yes. Where you should you invest in the Middle East? The answer is the UAE. If you are looking in the UAE then you should be looking at Ras al-Khaimah as an up and coming investment hotspot.