Why Should Israelis Invest in the UAE?
The announcement of the Abraham Accord last year was a watershed moment for Middle East relations and could change the course of the region’s future. Trade negotiations between both nations have opened up already, and in a matter of months there will be direct flights operating as well. We are already seeing significant levels of interest from Israeli investors, but what is it that makes the UAE such a great investment option for them?
Lifestyle & Culture
Both the UAE and Israel are known for their rich, diverse and vibrant lifestyles. You can experience the very best of nightlife, dining and culture, enjoying a wealth of options that you would be hard pressed to find elsewhere in the region. There are a few key differences between the offerings in each nation, which is what makes their collaboration such a unique opportunity.
While Israel has a large number of homegrown restaurants and food concepts that highlight Mediterranean cuisine, the UAE offers an incredible breadth of restaurants. You have everything from eateries that specialise in Emirati cuisine to European-style cafes and high-profile restaurants run by Michelin-starred chefs such as Gordon Ramsay, Vineet Bhatia and Nobu Matsuhisa. For the adventurous diner, there is no shortage of choice when it comes to enjoying an indulgent night out.
Nightlife is another key factor that unites these two nations - clubs and bars across the UAE are always popular amongst the nation’s night owls. And now with a newly announced ruling that will remove the need for a legal license in order to purchase alcohol, we can expect that the nightlife scene will be even more popular. For residents of Israel, who have never had any restrictions on purchasing alcohol other than a legal age limit, this is very welcome news.
All that being said, the lifestyle attractions of the UAE are not limited to gourmet dining and clubbing. For lovers of culture, history and the arts, the UAE has proven to be a truly fascinating and enriching destination. There are several museums located around the country, from the globally renowned Louvre Abu Dhabi to the lesser known Dubai Coffee Museum. Music festivals and performances are held throughout the year (though less often at present as a consequence of COVID-19), and the Dubai Opera House doubles as a cultural hotspot and tourist attraction because of its unique architectural design.
Technology & Innovation
Since its earliest days, the UAE has always had an eye on the future, transforming itself from a simple fishing village into a major global destination. Over the past decade, the country’s investment in the future has only intensified, as it promotes Smart initiatives aimed at creating a technologically advanced society. Israel has charted a similar path for itself, focusing on innovation and invention to become a key player on the world stage.
The prowess of both countries is evident in their grand ambitions when it comes to design - whether it is the skyline of Dubai or Tel Aviv, you will find some truly stunning examples of architecture that were a combination of creativity and innovation. However, that is merely a small part of it - Israel invests heavily in technology and electronic systems, primarily for defence but with broader applications. The UAE is a tech giant in the region, and is always looking for ways to scale up its digital infrastructure. As the UAE places greater emphasis on developing artificial intelligence and sustainable design initiatives, there are greater opportunities for investment for tech-savvy Israelis who are looking to stay on the cutting edge of technological advancement.
Economy & Taxation
Israel boasts a strong economy that has been on a steady rise over the past five years. While the COVID pandemic has proven to be a setback, the outlook for 2021 is positive with a growth of over 4% being forecast. The UAE has weathered its own challenges since the global recession and the pandemic, remaining resilient throughout. It will take some time for the economy as a whole to stand firmly on its feet again, but the real estate market is very hot and has been transacting at record levels since the last quarter of 2020.
Cost of living in Israel is largely higher compared to the UAE - you would need to spend USD 1,000 more on average to enjoy the same quality of life in Tel Aviv that you would have in Dubai. Residents of Dubai typically have almost 30% more purchasing power than those of Tel Aviv, and prices are anywhere from 20% to 40% lower depending on the category of goods.
A lot of this comes down to taxation. In Israel, you would be expected to pay income tax, services taxes, and various other forms of tax. The UAE, on the other hand, has a minimal taxation rate - there really isn’t much outside of a flat 5% VAT on consumer goods. As such, Israelis investing in the UAE, particularly in real estate, can expect to pay a very attractive price and earn generous returns over the medium to long term. Additional government initiatives, including 5 and 10-year visas for certain categories of investors , only add to the nation’s attractiveness as an investment haven.
Safety & Security
We have often gone on about how safe Dubai is as a city, and indeed how safe the UAE is overall. The crime rate across the country is negligible, law enforcement is rigorously trained and highly efficient, and new initiatives are constantly being put into place to safeguard the personal security of residents.
Since the COVID pandemic hit, the UAE’s reputation as a beacon of safety was put to the test and it endured. After a brief lockdown period, the country was once again open for business and quickly came back to healthy levels of economic activity, particularly in the real estate sector. COVID protocols are strictly enforced throughout the country and as of mid-January, the UAE has the highest vaccine distribution rate in the world, with an aim to vaccinate at least 50 of the general population by March. For Israelis, who were at the top of the global vaccination chart until just recently, coming to the UAE is a safe and smooth transition.