As one might expect from a region where the business and investment sector is developing at a very fast pace, the Middle East has become one of the main destinations for investors.
This is because it is a region where energy resources are significant, and technological development, along with demographic development, is always growing.
Most Middle East regions invest in crude oil, although many government agencies have always invested in surpluses on public works.
However, there are many other stocks, ETFs and ADRs that can be used to invest, always respecting the Islamic Finance principles, which are compulsory.
Broad ETFs
One of the most popular ways for investors to expose their money to the wider Middle East is to invest in ETFs that involve the entire country. An ETF, or exchange-traded fund is a kind of stock that controls an index in a certain industry. It is called an exchange-traded fund because it can be bought or sold just like a conventional stock.
The most common ETF for Middle East is WisdomTree Middle East Dividend Fund (GULF), which allows to be exposed in many regions: UAE, Qatar, Kuwait. Sectors are mostly financials (60%) and telecom (24%), but it also has a little percentage (9%) of industrials companies.
Also Market Vectors Gulf States Index ETF (MES) is one of the most appreciated ETFs for investors in the Middle East. It exposes you to multiple countries and industries. The only limit is that it has just a 1% expense ratio.
4 Reasons to Invest in The Middle East
You may be wondering why most investors are realizing that the Middle East is one of the best countries to invest in. There are many reasons, and we have tried to summarize them into 4 key points that will make you understand the potential of this country.
- For several years, the Middle East has been the world leader in various sectors including, as we mentioned at the beginning, crude oil. However, the government offers very convenient incentives to foreign companies in order to diversify assets and not leverage only on an energy resource such as oil.
- Saudi Arabia, one of the main regions of the Middle East, is a major trading ground for buying and selling goods and services. In addition, the manufacturing, food, and innovation sectors are growing exponentially each year. In particular, food is often imported, which is why foreign food and beverage companies can generate an excellent economic return.
- Setting up a business in Dubai can be very convenient, as there are no corporate taxes, personal income taxes and capital gains taxes, as well as VAT and other costs which can be very high.
- The geographical position of the entire Middle East and all its internal countries helps it to have lasting business relationships not only with Europe, but also with Asia and Africa, two countries in strong development.
Conclusions
We have seen how the Middle East can be a country with high investment potential. Always remember to respect in all circumstances the Islamic Finance, from which no investor can decline.
Its principles are several: for example, no tobacco, alcohol, gambling, interests, lending, pork and similar can be involved in an investment.
So, be sure to make the right move. If you want to rely on an official corporate, try one of the useful links listed below.
Useful links