Dubai is home to one of the most progressive and prevailing stock markets in the world. However, there are a few things one needs to learn about before planning to trade in Dubai. So, here in this blog, we will cover everything you need to know regarding trade in the UAE and how to launch your business moves on the DFM (Dubai Financial Market) trading floor.
Founded in 2000, the DFM is one of the best-regulated markets in the Middle East and North Africa (MENA) region. In fact, most of the UAE-based businesses and companies trade on the DFM. Furthermore, to facilitate access to transparent pricing and industry data, the authorities have introduced the DFM app which provides a dependable and up-to-date data source to traders for trading stocks.
Continue reading to learn more about trading in Dubai.
Reasons to trade in Dubai
These elements of business setup in Dubai will make you feel more confident to be an investor and trade in Dubai –
Robust economy
Unlike other Middle Eastern nations, the non-oil GDP contribution in UAE is around 72%, which makes it one of the most diversified economies in the world. Moreover, the high per capita income and significant infrastructural development milestones of the country are rapidly developing it into an international business hub.
Pro-business environment
The United Arab Emirates has been ranked 16th out of 190 economies in 2020 by the International Doing Business Index conducted by the World Bank. Moreover, the country has a highly business-friendly environment with minimum to no taxes, easy company incorporation, and top-notch infrastructure. In addition, it provides a variety of opportunities for global entrepreneurs to make money online or offline.
Investor-friendly policies
The UAE government has also incorporated investor-friendly policies which include 100% ownership of the company for foreign investors, expat recruitments, relaxed working hours, and lenient tax laws.
Strategic location
Dubai is the core of several global chains which makes it a major international trading hub. Its favorable geographical position offers amazing connectivity and serves as a grounding factor for the trading business.
Trade rules
The trading rules and policies are again one of the appealing factors to set up trade in Dubai. The liberal trade regimes, tax advantages, limited trade barriers enhanced market access, and regional trade agreements add value to the trade policies and motivate traders to set up their trading business in Dubai.
Tax benefits
The tax advantages offered by the UAE also include double taxation agreements that help traders reduce their tax liabilities. It has signed agreements with many of its international trading partners to avoid ‘double taxation’. On the whole, the government of UAE has always concentrated on creating tax-beneficial schemes in order to encourage trading in Dubai.
Open trade
Traders in Dubai are given the accessibility and liberty to develop- open trade relations. This simply means that there will be no discrimination between the imports and exports of a foreign jurisdiction and traders can voluntarily buy or sell from separate economies. Moreover, they will not be subject to any kind of governmental quotas, charges, or subsidies. This free trade policy, thus, inspires companies and budding entrepreneurs from all around the world to set up trading businesses in Dubai.
Diversified
The UAE is preparing an extensive approach to boost direct foreign investment in the trading sector. These strategies are expected to surround free zones and energy sectors and expand various restricted sectors in the region. For example, the non-banking sector, capital market financing, etc. This approach would enhance the growth of the private sector and promote comprehensive diversification.
Hassle-free visa rules
The UAE has a multinational populace. This is because of the relaxed visa restrictions and perks offered by the UAE government in regard to visa requirements. The authorities have also introduced a 10-year visa for highly skilled workers and investors in order to develop confidence among the business community in committing to the UAE market.
So, if you are willing to establish a trading company in Dubai, connect with uaeexpansion to find out the most cost-effective and easy solutions.
Guide to Trade in UAE
Below is a step-by-step guide on how to buy shares and trade in Dubai –
- Learn how the market works
- Know about fluctuations in the share price
- Understand the difference between buying and speculating on the share price
- Build a trading plan
- Understand the risks and charges
- Open a live account
- Identify a trading opportunity
- Open your first position, monitor, and close
Steps to trading in UAE online
Trading in the UAE is a fairly straightforward process. One needs to adhere to these simple steps in order to get started quickly with their trade in Dubai –
Obtaining NIN or Investor number
The NIN (National Investors Number) is a regulatory requirement for trading in Dubai. It also serves as your identity while trading online. Therefore, you have to apply to DFM to get this number.
There are a few different ways to obtain an investor number in Dubai –
- Use the DFM app
The recently updated app of DFM allows one to apply for their NIN by providing the necessary paperwork and getting regulatory approval.
- Dubai CSD Investor Affairs Help Desk
Dubai CSD Investor Affairs Help Desk at the Dubai World Trade Center, Sheikh Rashid Tower, offers excellent services to traders with their NIN. The applicant has to sign and submit an application, get it verified, and receive the NIN from the authority.
- Apply via a registered broker
The third option is to hire an authorized broker who will act on your behalf. However, make sure that the selected brokerage firm is approved and listed on DFM’s list. The application procedure and paperwork requirements would be submitted by the broker.
Opening a trading account
Once you receive your NIN, open a trading account with the help of the registered broker. To select the best broker, there are certain things to consider while doing your research –
- List of services
Brokers provide a range of services including equities trading, margin trading, online trading, margin trading, direct market access (DPA), derivative trading, etc. Hence, you need to choose one according to the services you require.
- Technology
To trade independently, you need to have well-designed mobile apps or online trading platforms that provide real-time and historical pricing data. Brokers are usually equipped with these facilities that help them to manage your portfolio effortlessly.
- Fee structure
The fee structure of every brokerage firm varies and the overall charges include transaction fees, account opening fees, account maintenance fees, and portfolio management fees. Hence, it is always better to research prominent brokerage firms and understand their fee schedule before opening a trading account.
Start trading
After opening an account with a regulated broker, you can begin with your trading activities. You can receive real-time data and pricing updates from DFM. Furthermore, you will also have access to the following trading options:
- Listed equities
- Derivatives
- Market-Traded Funds(ETFs)
- Sukuk and bonds
Follow your portfolio
Now that you have clearly understood how to trade in Dubai and use a listed broker to buy and sell stocks and other investment instruments, you have to keep tabs on your investment portfolio as your next task.
Wrapping up
Interested in making an investment in the trading sector? Connect with UAE Expansion right away. UAE Expansion has assisted several corporations and SMEs in setting up their trading ventures in Dubai and across the UAE.
To know more about this prolific market, speak to their business setup consultant.
