UAE has shown tremendous growth and development in the past years which has made them highly potent for all kinds of businesses. Trading in stock has become a very lucrative option to earn money through investing stocks. Dubai has one of the best regulated markets in the Middle East and North African region. The stock market in Dubai, UAE, was established in the year 2000. It is called the Dubai Financial Market. In this article, we are going to discuss how to get started with trading stock in the UAE, especially in Dubai.
The advantages of Trading in UAE
The main benefits of starting trading business in UAE is as follows
1. Strong Economy
UAE caters to a very strong economy when compared to its counterparts in the Middle East. UAE is the only space in the Middle East which has a GDP growth of 72% which comes from non-oil sectors. They are also known for the higher per capita income and evolving their policies to accommodate entrepreneurs from far and wide of the globe.
2. Pro-Business Environment
The United Arab Emirates stands 16th in the 2022 index of ease of doing business in the world. This index is curated by the World Bank, which categorizes businesses on the basis of the climate and the policies and regulations that help business flourish in the country. UAE provides a business environment with very less taxes, easy business set up, and with the most modern technology.
3. Welcoming environment
UAE is fostering many policies that help investors to come to UAE and set up their business productively in the land. The UAE government now gives foreign nationals the chance to own 100% of their business entity. A majority of the workforce in the UAE now consists of foreign nationals. They are also known to have the most relaxed tax policies, which ensures that there are higher repatriation benefits.
How does trading of stock work in the UAE?
The trading of stocks in the UAE is regulated by the UAE Securities and Commodities Authority (SCA). The authorities have implemented rules and regulations after careful consideration of the terms and conditions all over the world, which makes them even more reliable as they are created out of the positives.
The financial markets are bifurcated into two: Dubai Financial Market (DFM), and
Nasdaq Dubai. The DFM focuses on dealing with securities primarily related to UAE businesses, and Nasdaq focuses on foreign securities. There are proper functional websites for these markets which have stated out the market indices of the securities dealt with.
Steps to start a business in trading in stocks
The steps to start a trading business in stocks are a well-structured process. It is a straightforward process and therefore the easiest way to start business in the UAE.
1. Obtain the NIN number
A NIN, or investor number, is extremely important for starting a business of trading in stock in the UAE. There are three ways in which one can start trading in the stock business. First, you can apply for the NIN number through the application created by the DFM. You have to just upload all the relevant details through the app and get your NIN number. The whole process takes around three minutes. A second option is to go directly to the Investor Affairs Desk of the DFM. You can pay them a visit at Dubai World Trade Center, Sheikh Rashid Tower. The documents can be submitted, and they will verify and send your NIN number through SMS. The third option is to get the help of a licensed broker, and they are equipped to deal with the entire process on your behalf. Make sure you choose a genuine, licensed broker from the DFM. The NIN request will be submitted by the broker, and once approved, you will get your NIN.
2. Set up a trading account with the licensed broker
Once you have obtained your NIN, the next step is to open a trading account with the broker. Make sure you consider certain factors before choosing a broker, like:
- List of services: Different brokers deal with different services or activities in the stock market. The basic services of brokers include equity trading, margin trading, and internet trading. Only a very limited handful of brokers deal with exclusive activities like derivative trading, direct market access (DPA), and margin trading, etc.
- Technology: Not every licensed broker is technically skilled and does not have analytical data when trading in shares. Make sure you get someone who has good knowledge in dealing or managing your portfolio with all smart techniques.
- Fees: When selecting a licensed broker, get an understanding of the market and how the prices are charged normally for broker services. It will help you to be well aware of the system and chances of being cheated will be fairly low.
The trading portal or registered market expects its members to have a minimum amount of capital investment before they start with the trading process. The investors should understand these cut-offs and register accordingly.
The documents required for setting up business in stock trading include:
- Copy of valid residency visa for UAE (foreign nationals) or copy of the family book (UAE nationals)
- Copy of your valid passport
- Official bank letter or statement showing your valid local or international bank account number (IBAN).
- Copy of Emirates ID, both sides.
3. Start trading in UAE
Once you have successfully obtained your NIN and opened a trading account, now, you can easily do trading stock company formation in Dubai and start your business in trading stock.
The business of trading stocks is a highly volatile one. Therefore, it will be ideal to get a good consultation from a business setup servicebefore starting to trade. The business setup consultancy services can guide you and assist you with relevant advice and information before you start trading.
