Investment for NRI in Dubai

NRIs in Dubai have the unique opportunity to invest not just back home in India but also in Dubai, UAE. This provides NRIs a unique diversification opportunity through asset allocation across multiple investment options and geographies. Investing in Dubai provides the unique opportunity to benefit from zero personal income tax regime this Emirate is also well-known for its various investor-friendly policies and home to a strong financial market. Below are some top investment options available in Dubai for NRIs:

1- Mutual Funds Mutual funds offer non-resident Indians the ability to diversify their investment portfolio outside their home country. Also, it's a great option for NRIs in Dubai to take advantage of professional management in a basket of diversified investments. Mutual Funds offer NRIs a unique opportunity to allocate funds across various asset classes such as debt, equity, money market instruments, etc. depending on the specified investment objective of the mutual fund scheme. NRIs in Dubai can also invest in mutual funds in India through designated NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account.

2- Real Estate Non-resident Indians living in Dubai can own residential property in Dubai as well as India. However, it is noteworthy that NRIs are prohibited from purchasing agricultural land in India. The Reserve Bank of India (RBI) permits non-resident Indians to purchase any residential or commercial property in India and make real estate investments.
Real estate in Dubai can be a lucrative investment too. As per a Deloitte’s Dubai Real Estate Predictions report for 2025, Dubai’s residential property market witnessed a 24% increase in sales prices and a 19% increase in rental rates in 2024. Investing in residential property in Dubai can provide NRIs with the opportunity to benefit from this regional real estate growth.

3- Gold Gold investment in Dubai offers NRIs a safe haven investment option, providing a hedge against inflation and currency fluctuations. NRIs residing in Dubai can invest in physical gold, gold ETFs, gold mutual funds, digital gold, etc. Among these, owning gold in digital form or as ETFs and gold mutual funds can be more convenient as problems related to safe storage of physical gold.

4- Unit-linked Insurance Plans ULIP offers the dual advantage of life insurance coverage along with the potential for long-term wealth creation. These plans are regarded as a good choice for investors who possess a moderate to high-risk tolerance. The funds you invest in a ULIP are divided into two parts:

• Premium for life insurance protection
• Capital allocation in equity and debt funds

This investment option offers policyholders the option of choosing between different types of funds that can help ensure market-linked growth across various asset classes including equity and debt. These are managed by professional fund managers in lieu of a fund management fee paid by the policy holder. Policyholders may also have the option of investing in Sharia-compliant equity fund such as the Axis Max Life Pure Growth Fund that only invests in stocks of companies that comply with Sharia law.

5- Equity Instruments Typically, long-term returns in the stock market are higher than fixed-income products. Well-structured equity portfolios serve as excellent investment strategies for NRIs. Any NRI possessing a Portfolio Investment Scheme (PIS account), an NRE/NRO account, a Demat account, and a trading account is eligible to invest in the Indian stock market. Similarly, NRIs also have the option to invest in equities through Dubai’s stock markets subject to local terms and conditions.
However, unlike fixed-return instruments, equity market investments do not offer assured returns and can be volatile, especially in the short term. It is therefore advisable to conduct thorough research or seek expert assistance prior to making any equity investments in India or in Dubai.

6- Fixed Deposit Fixed deposits are one of the most secure investment choices in India for NRIs, particularly for those with a limited risk appetite. They offer consistent and guaranteed returns at a fixed rate. NRI living in Dubai can start FD through an NRE (non-resident external) FD, an NRO (non-resident ordinary) FD, or an FCNR (foreign currency non-resident) FD account. This option may also available to NRIs through some leading Dubai-based banks many of whom have representative offices in India.

7- National Pension Scheme NRIs living in Dubai can invest in NPS, a government-sponsored saving plan, to build a retirement corpus. Contributions in NPS are eligible for tax deductions up to Rs. 1.5 lakhs per annum under section 80C of the Income Tax Act, with an additional Rs. 50,000 deductions under 80CCD(1B). However, NRIs need to opt for the old tax regime to avail these tax benefits. Moreover, the tax deductions can only be availed against any income earned in India. At superannuation, up to 60% of the NPS corpus can be withdrawn as a lump sum tax-free, while the remaining 40% of the corpus used to purchase an annuity, which is taxable.

1- Axis Max Life Smart Wealth Plan: This plan is a comprehensive life insurance saving plan. It offers guaranteed returns that keep Dubai-based NRIs financially secure through all milestones in life. With SWP, NRIs can comfortably meet their saving goals and get financial security as well.

2- Axis Max Life Online Savings Plan: Unit-linked insurance plan provides extensive protection and investment options for NRIs residing in Dubai or other overseas locations. Axis Max Life online saving plan comes with a wide range of benefits, including maturity benefits, death benefits, and tax benefits under sections 80C as well as 10(10D) of the Income Tax Act. Do note that according to the current tax regulations, tax deductions are accessible only to those who opt for the old tax regime.

3- Axis Max Life Smart Fixed-return Digital Plan: This plan is an ideal investment option that offers guaranteed returns and life cover as well. So, individuals including Dubai-based NRIs who want to build a saving corpus through life insurance can invest in this plan. Moreover, it also provides additional maturity benefits to the female customer.

4- Axis Max Life Flexi Wealth Advantage Plan: This ULIP offers policyholders the option to create long-term wealth while simultaneously availing the benefit of life cover. This is a highly customisable investment option and NRIs in Dubai can choose from a wide range of fund options as well as investment strategies as per their risk tolerance and financial goals.

1- Portfolio Diversification: NRIs residing in Dubai can diversify their investment portfolio by investing in India and also locally in Dubai. By spreading their investment across multiple geographic locations, NRIs can enjoy optimal growth of investment and minimize overall investment risk.

2- Better returns: India’s growing economy market offers high growth potential and better returns for several investment opportunities like equity and real estate. Similarly, investment options are also aplenty in case one wants to make investment in Dubai.

3- Build a Retirement Corpus: Some of the investment plans in India like the National Pension System as well as retirement plans offered by life insurance companies enable NRIs to build a corpus for retirement. These plans provide a secure option for retirement with stable income and tax benefits.

4- Tax Benefit: Investment plans in India also offer tax benefits for NRI residing in Dubai. Under Section 80C of the Income Tax Act, life insurance premiums are eligible for tax deductions up to Rs. 1.5 lakh. However, this tax benefit is only available to NRIs who opt for the old tax regime. Moreover, this tax deduction can only be used to offset income earned in India.

To invest in India, NRIs from Dubai must provide the following documents:

1- PAN card: For investing in India, you must open a NRE/NRO bank account with a valid PAN card. Therefore, a permanent account number is mandatory for opening a bank account and conducting financial transactions in India, such as filing income tax returns.

2- Passport: A copy of valid Indian passport pages showing the individual's name, date of birth, address, and photograph is needed for investing in mutual funds.

3- Address proof: If an NRI uses their Indian address for communication and mailing, then they have to provide valid address proof of Indian residency. Acceptable documents include an Aadhaar card, driving license, passport, Voter ID, etc.

4- Proof of NRI status: It is essential to possess documentation that verifies your Non-Resident Indian (NRI) status, in compliance with the regulations established by the Government of India. 

Note: The above list of documents is illustrative and additional documents may be required on a case by case basis depending on the investment option chosen.

There are some key steps that NRIs in Dubai need to complete in order to invest in India, including the below:

1- Open an NRO/NRE bank account: Banks in India allow Non-Resident Indians (NRIs) living in Dubai to open either Non-Resident External (NRE) accounts or Non-Resident Ordinary (NRO) accounts for investment. Each account type is designed for distinct purposes. NRE accounts accept foreign currency deposits, whereas NRO accounts accommodate both foreign currency deposits from abroad and local deposits in Indian Rupees. NRIs have the option to select the type of account that best aligns with their financial requirements.

2- Complete the KYC process: When opening a bank account, NRIs are required to comply with specific Know Your Customer (KYC) regulations. They must submit proof of all the required documents.

3- Select the investment plan: After that, NRIs have to select their preferred investment plan from the range of retirement plans and savings plans offered by the life insurance company chosen.

4- Comply with all the investment rules: Before investing, NRIs must understand the tax implications of different investment options available in Dubai. This is necessary to maximise the returns and avoid potential penalties due to missed tax declarations/payments. To make informed decisions, it is advisable to consult tax advisors.

Below are key considerations that NRIs need to keep in mind when choosing suitable investments in Dubai:

1- Understand regulatory guidelines: Before investing, NRIs must understand the impact of applicable regulations such as Foreign Exchange Management Act (FEMA) regulations, which determine how NRIs can invest annually in financial instruments such as mutual funds.

2- Do the research and Select the right investment option: A wide variety of investment avenues tailored to different financial goals and risk appetites are available to NRI investors in Dubai. So, before selecting a specific plan, one needs to keep in mind the financial objectives while also understanding market trends, and the tax implications. It might be a good idea to consult a financial advisor in case you want professional assistance in this regard.

3- Risk tolerance: Before investing, NRIs residing in Dubai should assess their risk tolerance. A well-diversified portfolio can help mitigate risk while optimising returns.

4- Investment goals and horizon: NRIs must have clear investment objectives, whether saving for retirement, building wealth, or funding education. By understanding these goals, you can easily select appropriate mutual fund schemes that align with your investment horizon.

5- Stay updated: The financial markets are dynamic whether one is investing in India or in Dubai. Therefore, staying updated about fund performance, market trends, and economic charges is essential for successful investing in India.