How to Invest in the Dubai Stock Market (DFM) as a Resident

To buy shares on the Dubai Financial Market (DFM) or the Abu Dhabi exchange (ADX), you need an investor number (NIN) and an account with a licensed broker. Opening both is quick and, at the broker I checked, free. The harder questions are cost, concentration and whether local shares should be your core holding at all.

This page explains the routes, the steps, what a trade really costs and the risks. It is general information, not advice for your situation. Part of the broader guide: How to invest in the UAE as an expat.

Three ways to own UAE shares

You can buy UAE-listed shares through a local broker, through a global broker that has added UAE markets, or indirectly through a fund. Each has a different cost and a different level of paperwork.

Five steps to buy your first UAE shares

The process is: choose a licensed broker, get your NIN, fund the account, place the order, and keep the records.

1. Pick a licensed broker and confirm the entity and regulator. See how to check a broker.
2. Get your NIN. The DFM investor number identifies you on the exchange. DFM publishes FAQs on how to apply and whether it can be done through your broker. At FAB Securities, a broker I checked, opening a trading account takes 2 to 3 working days and obtaining the NIN is free.
3. Fund the account. Brokers usually prefer you to hold a bank account with them, to manage cash.
4. Place the order in dirhams on the exchange during trading hours. FAB Securities states its trading hours as 10am to 3pm Gulf Standard Time, Monday to Friday.
5. Keep the records. You will need contract notes and dividend statements for your own tax position.

What a trade really costs

Commission per order is the cost that surprises most beginners. FAB Securities publishes these rates: on DFM, 0.275% plus 5% VAT plus AED 10 per order; on ADX, 0.15% plus 5% VAT. Other brokers charge differently, so compare before you open an account.

An example with an order of AED 10,000 at those rates, my arithmetic:

You pay on the way in and again on the way out. For comparison, on a USD 10,000 order for US shares Interactive Brokers' fixed plan charges USD 1 (see Interactive Brokers in the UAE). Frequent small trades in local shares eat returns quickly.

Risks and limits

A small, local market concentrates risk: your income, your property and your portfolio can all depend on the same economy.

• Concentration. One country, a limited number of listed companies and a few sectors. Check the sector weights in the index factsheet before you decide how much to hold.
• Liquidity. Some shares trade thinly, so you can pay more to buy and receive less to sell.
• Foreign ownership limits. DFM publishes FAQs on foreign ownership limits (FOL). Some companies cap how much non-UAE nationals can own, so check the company before you buy.
• Currency. The dirham is pegged to the dollar at 3.6725, so there is little currency risk against USD assets. A peg is a policy and policies can change.
• Taxes. The UAE does not tax most individual investment income, but your home country may. See the tax section of the main guide.

In my view, UAE shares suit a small satellite position next to a diversified global core, not the whole portfolio. That is an opinion, not a rule: your horizon, income and tax position decide.

Questions people ask

How do I buy shares on the Dubai Financial Market?

Choose a licensed broker, obtain your DFM investor number (NIN), open and fund a trading account, then place a buy order in dirhams during trading hours. At the broker I checked, the NIN is free and opening takes two to three working days. Compare commissions first, because they differ by broker.

What is an NIN on the DFM?

The NIN is the National Investor Number: the identifier DFM gives each investor so that shares are registered in your name. You usually obtain it through your broker or directly from DFM. At FAB Securities, a licensed broker, obtaining it is free of charge. Read DFM's own FAQ for the current procedure.

How much does it cost to trade DFM shares?

It depends on the broker. At FAB Securities the DFM commission is 0.275% plus 5% VAT plus AED 10 per order, so an AED 10,000 order costs roughly AED 39, about 0.4%. ADX is cheaper at the same broker, 0.15% plus VAT. You pay both when you buy and when you sell.

What are the Dubai stock market trading hours?

FAB Securities states 10am to 3pm Gulf Standard Time, Monday to Friday. Hours can change around holidays and by market, so confirm them with your broker or the exchange, and ask whether the broker has its own earlier cut-off. If you trade US shares through a global broker, the hours follow the US market, not the UAE.

Is the Dubai stock market a good long-term investment?

It can be one part of a long-term portfolio, but it is a small, concentrated market, so most diversified investors hold it as a satellite, not the core. Past performance does not predict future results. Decide the share of your portfolio you want in UAE shares before you buy, and check costs.

Where my services fit

I offer paid services, so you should know where they fit. Titanium is a 12-month one-to-one programme for investors with at least USD 100,000 (details). Hedgebra Trading runs automated strategies on currencies and gold; it is high risk and you can lose money (details). Neither is a recommendation to you personally.

Not sure how much of your money belongs in local shares? Take the 2-minute Wealth Profile Quiz or download the free Wealth Guide.