Dubai Financial Market has just closed 2025 with a 17.22% annual increase, marking its fifth consecutive year of growth while European markets struggle to maintain single-digit figures. The contrast is brutal: while European capital drags along under regulations, inflation, and stagnation, investors who bet on the Emirates multiplied their wealth at a pace that a decade ago seemed impossible.
This figure is not a stroke of luck. On 3 January 2026, Dubai Financial Market (DFM) officially confirmed that the general index (DFMGI) closed 2025 at 6,114 points, outperforming regional markets such as Saudi Tadawul and Abu Dhabi’s ADX over the past three years. The question is no longer whether Dubai is a viable alternative, but how much money you are leaving on the table by ignoring it.
The market that beat them all: five years dominating
The DFM General Index has recorded five consecutive years of verified growth. The index closed 2025 at 6,114 points after a 17.22% rise, consolidating itself as the most profitable market in the Gulf over the 2023–2025 period. Market capitalization reached 992 billion AED (around 270 billion dollars), backed by a trading volume that soared 63% year-on-year to 174 billion AED.
Vijay Valecha, Chief Investment Officer at Century Financial, stated on 3 January: “2025 was a solid year for UAE equities, with DFM leading regional performance. The market continues to show resilience, supported by the momentum of global equities and strong domestic fundamentals.”
The comparison with European markets is devastating. While the EuroStoxx struggles to deliver annual returns of 5–7% amid political uncertainty and trade wars, Dubai is giving almost three times that return in an environment with no personal income tax for individual investors.
The numbers that explain the capital stampede
The official figures published on 27 January 2026 by Dubai Financial Market demolish any narrative of a volatile or high-risk market:
- Net profit before tax: 1.06 billion AED in 2025, versus 409.3 million in 2024 (a 159% increase)
- Total consolidated revenues: 1.28 billion AED, a 102% year-on-year jump driven by higher trading activity
- Total traded value: 174 billion AED (+63% vs 2024), the highest liquidity level in more than a decade
- EBITDA margin: 88%, a clear sign of operational efficiency and disciplined management
The average daily number of trades jumped 31% year-on-year, fueled by higher institutional participation and cross-border activity. The average daily traded value reached 692 million AED, cementing DFM as one of the most liquid and dynamic markets outside Asia and the Americas.
The silent collapse of the traditional European investor
In this context, European capital faces a structural trap that few openly acknowledge. Stock markets in the Old Continent are weighed down by regulatory drag, rising tax pressure, and sluggish growth projections that keep returns at 5–6% in good years. And that is before factoring in inflation, capital gains taxes, and transaction costs.
Dubai, by contrast, operates with zero capital gains tax for individuals, state-of-the-art financial infrastructure, and a legal framework inspired by common law that protects foreign investors as strongly as local ones. The result: every euro invested in DFM generates a net return significantly higher than the same euro in EuroStoxx, even before accounting for the difference in gross performance.
Foreign participation in Dubai’s market continues to grow, with capital flows from Europe, Asia, and Latin America seeking to escape suffocating tax environments and regulations that penalize the free movement of money.
Why this marks an irreversible change of era
Beyond the specific 17.2% figure, what DFM’s performance reveals is a tectonic shift in the geography of global capital. For decades, European markets benefited from being perceived as stable and predictable havens. That narrative cracks when emerging markets like Dubai not only match but consistently outperform that stability while multiplying returns.
| Market | 2025 return | Individual capital gains tax | Average daily liquidity |
|---|---|---|---|
| DFM Dubai | +17.2% | 0% | 692M AED |
| EuroStoxx | ~5–7% | 19–30% (varies by country) | Variable |
| ADX Abu Dhabi | +7.5% approx. | 0% | Lower than DFM |
The Dubai model shows that sustained growth, stability, and zero taxation are not mutually exclusive concepts. This combination is reshaping the decisions of wealth managers, family offices, and investment funds that have historically operated exclusively in Western markets.
The coming months will decide who capitalizes on the opportunity
DFM started 2026 trading slightly below technical resistance at 6,114 points, with strong support at the 50- and 100-day moving average levels. Analysts at Century Financial project that breaking through the 6,200–6,300 resistance zone would trigger a new bullish leg that could push the index towards 6,500 points before the second quarter.
The upcoming corporate earnings releases, led by Taaleem Holdings scheduled for February, will be key catalysts. The market expects sectors such as Real Estate, Consumer Discretionary, and Financials to maintain positive momentum during the first half of the year.
