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How should I invest my company's funds?

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bkidiot

New member
Jan 1, 2025
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#1
I run a freezone company in the UAE.

My business has high profit margins and few overhead costs.

Given corporate tax regulations, I'm cautious and taking a "reasonable" salary. The rest will be paid out as a dividend.

So the question is: what do I do with the funds that I can't withdraw and are sitting in my business account? We're talking about ~AED 100K per month.

My business bank offers term deposits, but the rates are low.

Does it make sense to:

- Open an IBKR business account, hold cash and earn a better rate? Buying ETFs probably doesn't make sense due to the short time horizon?
- Convert to the funds to crypto and place them in a protocol to earn double-digit interest?
- Something else?

For context, I don't plan on staying in the UAE long-term, potentially another year or two. My preference is to keep the funds in fiat. But I'm not comfortable holding 7 figures with my business bank.
 
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#3
JohnnyDoe said:
Before investing into any financial product you should invest in some financial education. Otherwise you will become another puppet of banks/brokers.
Click to expand...
Although I appreciate the sentiment, this is not a helpful comment.

It's one thing when you can plan for the long term and you have a "permanent" home base, have an idea of what your future needs are... whereas when you're looking at the short time with a few unknowns, it's more difficult (at least for me).
 
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#4
bkidiot said:
It's one thing when you can plan for the long term and you have a "permanent" home base, have an idea of what your future needs are... whereas when you're looking at the short time with a few unknowns, it's more difficult (at least for me).
Click to expand...
Good planning is the one that is resilient to, or even benefits from, the unknown.
 
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#6
bkidiot said:
Given the information provided (happy to share more if there's something specific that would help), what would you do?
Click to expand...
What I’ve been doing for some time: build an income generating IBKR portfolio, use the cash for expenses and for buying btc and if some larger unexpected expenses come up take advantage of the IBKR credit line.
Don’t keep in any bank more money than what you need for the next 7 to 30 days, split the amount between many banks.
 
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#7
bkidiot said:
- Open an IBKR business account, hold cash and earn a better rate? Buying ETFs probably doesn't make sense due to the short time horizon?
- Convert to the funds to crypto and place them in a protocol to earn double-digit interest?
- Something else?
Click to expand...
@JohnnyDoe with all due respect, but this does not sound much like investing, rather just keeping the money. I mean holding cash at IBRK is much lower than having shares there which in turn is much lower than @wellington's cryptos.

@bkidiot How about buying some index funds if you are risk averse?
 
#8
daniels27 said:
@JohnnyDoe with all due respect, but this does not sound much like investing, rather just keeping the money. I mean holding cash at IBRK is much lower than having shares there which in turn is much lower than @wellington's cryptos.

@bkidiot How about buying some index funds if you are risk averse?
Click to expand...
I'm open to both options: keeping the money and/or investing.

It's important to note that this is company funds, not personal. The time horizon is also something to consider. For instance, the dividend is due to be paid out in a few months. Does it make sense to buy an ETF, index fund for 3-4 months, then sell, and pay out as a dividend?

The path to invest via IBKR would be convert funds from AED to USD. Transfer to IBKR and invest. A few months later, sell and transfer to business account, and then payout as a dividend. Fees on fees so it's something to consider, and every time there's a transfer, there's the potential for "issues".
 
#9
bkidiot said:
It's important to note that this is company funds, not personal. The time horizon is also something to consider. For instance, the dividend is due to be paid out in a few months. Does it make sense to buy an ETF, index fund for 3-4 months, then sell, and pay out as a dividend?
Click to expand...
Sure, maybe index funds. Or @JohnnyDoe's IBKR portfolio. You can always pay out the dividends on paper and then loan them back to the company. This way, you have more flexibility in payouts.

bkidiot said:
The path to invest via IBKR would be convert funds from AED to USD. Transfer to IBKR and invest. A few months later, sell and transfer to business account, and then payout as a dividend. Fees on fees so it's something to consider, and every time there's a transfer, there's the potential for "issues".
Click to expand...
I think you probably will get better exchange rates when converting at IBKR. Please check.
 
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#11
daniels27 said:
Sure, maybe index funds. Or @JohnnyDoe's IBKR portfolio. You can always pay out the dividends on paper and then loan them back to the company. This way, you have more flexibility in payouts.


I think you probably will get better exchange rates when converting at IBKR. Please check.
Click to expand...
Wio Bank has extremely tight USD/AED spreads 3.6715/3.6730

Banking wise it's also better to send USD to IBKR
As otherwise if you send AED to IBKR, they sometimes have issues with their corresponding banks and AED wires get stuck
 
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#12
bkidiot said:
Although I appreciate the sentiment, this is not a helpful comment.

It's one thing when you can plan for the long term and you have a "permanent" home base, have an idea of what your future needs are... whereas when you're looking at the short time with a few unknowns, it's more difficult (at least for me).
Click to expand...
You can invest in the top 25 stocks from European countries. It is going up and down like any other market but usually r is rare you lose money long term.
 
#15
bkidiot said:
I run a freezone company in the UAE.

My business has high profit margins and few overhead costs.

Given corporate tax regulations, I'm cautious and taking a "reasonable" salary. The rest will be paid out as a dividend.

So the question is: what do I do with the funds that I can't withdraw and are sitting in my business account? We're talking about ~AED 100K per month.

My business bank offers term deposits, but the rates are low.

Does it make sense to:

- Open an IBKR business account, hold cash and earn a better rate? Buying ETFs probably doesn't make sense due to the short time horizon?
- Convert to the funds to crypto and place them in a protocol to earn double-digit interest?
- Something else?

For context, I don't plan on staying in the UAE long-term, potentially another year or two. My preference is to keep the funds in fiat. But I'm not comfortable holding 7 figures with my business bank.
Click to expand...
Fractional real estate, government securities, Fixed deposits with other banks which have higher rate than your current bank or at finance organizations instead of banks, Invest money back into your running business to increase revenue, start new business, invest in start ups, invest in crypto stable coins and stake them, etc
 
#16
PhantomOf ThePits said:
Wio Bank has extremely tight USD/AED spreads 3.6715/3.6730

Banking wise it's also better to send USD to IBKR
As otherwise if you send AED to IBKR, they sometimes have issues with their corresponding banks and AED wires get stuck
Click to expand...
I never had any issues in the past year wiring AED to IBKR. The first transfers took a bit longer, but for the more recent ones I got them deposited sometimes only a few hours after transfer was initiated from ENBD. (They use CHASE in GB AFAIK - HSBC UAE can be a bit of pain in the a*s trying to wire AED to an UK Account though)

ETFs can work in your situation, I basically did it the same way as @JohnnyDoe recommended. I only worked with Fidelity instead but followed the same principle. Kept my funds invested and took out loans via Fidelity if urgently needed. If you tend to need loans short term for liquidity only this can work like a charm and is really smooth.

On the other hand if you plan to hold the positions only for 3-4 months and sell them of completely this might result in a loss, therefore I would rather park the funds somewhere where you get the best interest rate and are flexible. (I'm not sure if WIO offer those high rates to business customers as well but if they do keep some there and move some funds to IBKR.)
 
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#17
apres777 said:
On the other hand if you plan to hold the positions only for 3-4 months and sell them of completely this might result in a loss, therefore I would rather park the funds somewhere where you get the best interest rate and are flexible. (I'm not sure if WIO offer those high rates to business customers as well but if they do keep some there and move some funds to IBKR.)
Click to expand...
You can buy 4 weeks us tbills and roll them over, that’s the best rate you can get “without risk”.
 
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