Share your experience - migration to Dubai for Option Trading

F&O
1

If you have migrated to Dubai for trading Options better, need to understand your experience.

  • What differences are there when you trade US Options from Dubai vs Indian Options from India? What are the advantages?
  • Are option selling strategies profitable there? Can you also comment on behaviour of US Index [where you trade Options] vs India [Banknifty / Nifty]?
  • Is pledging of stocks to trade options allowed, like we do it in India? Any caveats here?
  • What are the major things to keep in mind while migrating for the above purpose and setting up shop in Dubai [trading specific only. Not talking about housing, food etc.]
  • Are there any communities which are trading US options and discussing about it [like TradingQna]?

Please comment only if you have a decent idea on the above / have migrated yourself. Please don’t advise whether one should migrate or not.

1 Like
2
  1. If you trade US options from Dubai, Income will be tax free. Provided your tax liability is of dubai only.
  2. Yes strategies are profitable if you can play them with an edge. Behavior is very volatile. Also ROI will be higher because of margin utilization rules. (Margin = Max loss only) But risk is also high.
  3. No, you can not pledge stocks and do option trading in US. However, they do have some bonds which can pledged for margin.
  4. umm…varies on the objective, some wants to save tax, some wants to improve standard of living. Do this only if your income in india is quite high and you have other cash flows as well.
  5. Yes, you may search on reddit

I may be wrong with some information, feel free to correct.

3

Thanks @Gauravydv !

Are you sure about this? When I do basic Google search, their AI says that it is allowed.

On this specifically, an Indian moving to Dubai won’t get a Dubai citizenship directly. So for such people doing US F&O isn’t a problem right?

Saving tax is the objective. In my view the point when it starts making sense would be when ‘Increase in monthly expenses on moving to Dubai’ becomes less than ‘Tax saved by moving to Dubai on a monthly basis’.

4

don’t you need something like golden visa for trading there? because how else would liability would be in Dubai?

what if someone sets up a company in Dubai to this? or GIFT city?

5

We have an account with Interactive brokers in US, tried a lot to figure out pledging stuff. Found nothing. Also trading in US is expensive you need to pay even for the data which we get free with Indian brokers. Systems are also complex, not like our zerodha and groww platforms.

Yeah, It’s not like you went there on tourist visa and you get all these benefits. Either you take the golden visa or you work there in a company for few years. But if you think of opening your own firm over there, it’s quite expensive to setup registered business.

All these things comes down to one conclusion. If your income is too high and you can confidently trade US options then only think of it. If it was that easy to escape Indian taxes, everyone who makes 1-2 cr/year would have moved to dubai.

Talking about living in dubai, it is for sure expensive, you need to figure out how much you will save in taxes and how much will pay as one time moving cost/setup cost and recurring living cost. Also you need to consider family aspects as well.

In my opinion it’s not worth it if you plan to trade options only.

2 Likes