For Indian residents in the UAE, the promise of tax-free income and a higher earning potential makes investing an exciting prospect. Yet, despite the opportunities available, many fall into the same financial traps, often without realising the long-term impact.
From currency risks to an over-reliance on familiar assets, these mistakes can significantly erode wealth. The good news? A few smart adjustments can make all the difference.
Traditional savings and investments
Many Indian residents instinctively send a large chunk of their savings back home, investing in fixed deposits, real estate, or mutual funds. It feels like the safest bet – after all, there’s comfort in familiarity.
But here’s the catch: the Indian rupee has consistently depreciated against the US dollar – and, by extension, the UAE dirham. On average, the rupee has lost about 2.7 per cent of its value annually against the dollar in the last decade.
That means an investment that seems profitable today might shrink in real value when converted back later. The key is to strike a balance – holding assets in both the rupee and dirham to hedge against currency fluctuations.
While these have historically been safe choices, they don’t necessarily offer the best returns or liquidity. What happens when the real estate market in India slows down or gold prices stagnate?
Many residents fail to explore the diverse options available in the UAE – stocks, bonds, real estate investment trusts and market-linked investment plans that can provide better growth and stability. A well-diversified portfolio tailored to long-term goals is the best way to protect and grow wealth.
Diverse investment options
Surprisingly, many Indian residents don’t take full advantage of the UAE’s financial ecosystem. The local market offers investment-linked insurance plans, structured products and equity funds that provide exposure to global markets while being dirham-denominated, thereby offering more stability.
For instance, unit-linked insurance plans serve a dual purpose by offering both life cover and long-term market-linked returns. Mutual funds designed for non-resident Indians can also provide diversification without the currency conversion costs associated with sending money to India.
Residents often overlook just how much exchange rates affect their financial future. While the dirham is pegged to the dollar, the rupee is prone to fluctuations. This means that, while an investment in India might show an 8 per cent to 10 per cent return on paper, the actual gains could be 5 per cent to 6 per cent lower when adjusted for currency depreciation and conversion costs.
A smarter approach is to allocate a good portion of savings in dirham-based assets, ensuring a more predictable financial future.
The UAE’s investment landscape is dynamic and with that comes a fair share of high-risk opportunities. Cryptocurrencies, high-risk stocks and speculative investment schemes often promise exponential returns, luring residents eager to grow their money fast.
But history has shown that markets can be unforgiving. While these investments have their place, they should only form a small part of a well-rounded portfolio, balanced by stable, income-generating assets.
Long-term financial security
Another point to note is that investment planning isn’t just about growth, it’s also about security. Many of us either neglect insurance entirely or buy policies based on immediate affordability rather than long-term adequacy.
Life insurance, critical illness coverage and income protection are essential to protecting financial well-being. A well-planned insurance strategy ensures that unexpected issues such as poor health or job loss don’t derail carefully built wealth.
Avoiding these common pitfalls isn’t about drastic changes, it’s about being conscious about money. Diversifying investments, staying mindful of currency fluctuations and leveraging the financial opportunities available in the UAE can have a significant impact.
Seeking guidance from financial advisers, keeping an eye on global market trends and taking a long-term approach can help Indian residents to maximise their wealth while avoiding unnecessary risks.
At the end of the day, financial success is more about how wisely you invest and protect what you have.
Atul Kathuria is business head of term life insurance at Policybazaar.ae
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The Book of Collateral Damage
Sinan Antoon
(Yale University Press)
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Gifts exchanged
- King Charles - replica of President Eisenhower Sword
- Queen Camilla - Tiffany & Co vintage 18-carat gold, diamond and ruby flower brooch
- Donald Trump - hand-bound leather book with Declaration of Independence
- Melania Trump - personalised Anya Hindmarch handbag
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
Score
Third Test, Day 1
New Zealand 229-7 (90 ov)
Pakistan
New Zealand won the toss and elected to bat
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
'Skin'
Dir: Guy Nattiv
Starring: Jamie Bell, Danielle McDonald, Bill Camp, Vera Farmiga
Rating: 3.5/5 stars
The Kites
Romain Gary
Penguin Modern Classics
Q&A with Dash Berlin
Welcome back. What was it like to return to RAK and to play for fans out here again?
It’s an amazing feeling to be back in the passionate UAE again. Seeing the fans having a great time that is what it’s all about.
You're currently touring the globe as part of your Legends of the Feels Tour. How important is it to you to include the Middle East in the schedule?
The tour is doing really well and is extensive and intensive at the same time travelling all over the globe. My Middle Eastern fans are very dear to me, it’s good to be back.
You mix tracks that people know and love, but you also have a visually impressive set too (graphics etc). Is that the secret recipe to Dash Berlin's live gigs?
People enjoying the combination of the music and visuals are the key factor in the success of the Legends Of The Feel tour 2018.
Have you had some time to explore Ras al Khaimah too? If so, what have you been up to?
Coming fresh out of Las Vegas where I continue my 7th annual year DJ residency at Marquee, I decided it was a perfect moment to catch some sun rays and enjoy the warm hospitality of Bab Al Bahr.
match info
Union Berlin 0
Bayern Munich 1 (Lewandowski 40' pen, Pavard 80')
Man of the Match: Benjamin Pavard (Bayern Munich)
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Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
