Investing in commercial real estate can offer fantastic tax benefits, low barriers to entry and some of the highest rates of return. Find out more about the benefits and risks of investing in emerging markets, where to look for options, and useful investor tips

Emerging markets are countries that are experiencing rapid economic growth and industrialization, but do not have fully developed economies. Developing nations that are projected to experience maximum growth over the coming years include Brazil, India, Cambodia, Indonesia, Vietnam, Egypt, Turkey, and South Africa.

About 6.2 billion people, or about 78% of the world's population, live in developing economies. That is why investing in these markets has a huge potential for growth, but at the same time it is also quite risky.

We talk about the advantages and disadvantages of investing in developing areas and the features of investments below.

The benefits of investing in emerging markets

Markets located in developing countries are characterized by rapid economic growth, population growth and the development of the middle class.

The main advantages of investing in emerging markets:

- High growth potential – usually the markets of developing countries have faster rates of economic growth compared to developed countries. This trend is due to the growth of consumption, the development of infrastructure and technological progress. Investing in the economy of these countries in the early stages can yield considerable profits.

- Diversification – investing in new markets will help diversify the investor's portfolio.

- Promising economy - most of these countries are still in the early stages of their own development. This fact allows the business to expand and enter new, underdeveloped markets, which in turn creates additional benefits for investors.

- Favorable demographic conditions – usually in developing countries the young population prevails. This demographic trend can lead to increased demand for goods and services, contributing to further economic development and creating investment opportunities in various sectors.

Risks of investing in emerging markets

Like any investment, investments in the economies of developing countries are accompanied by a certain amount of risks:

- Political and economic crises – the economy of developing countries can be vulnerable to political instability, economic recession and changes in state policy.

- Fluctuations in currency exchange rates can significantly affect the value of your investments, resulting in both gains and losses.

- Lack of transparency – in some markets it can be difficult to get accurate and truthful information about companies and their financial situation.

- Local obstacles – navigating local rules and laws, as well as their changes, can be difficult for a foreign investor.

Where to look for options for investing in emerging markets?

Before investing, find the most profitable and interesting investment option for you:

- Emerging market stocks are one of the most popular ways to invest. Most of them can be purchased on international stock exchanges.

- Bonds of developing countries - another option for investing in the economy of countries is to buy bonds issued by governments or corporations of developing countries. When you buy bonds, you become a lender. The investor receives fixed interest until the bond reaches maturity, after which the principal is returned to you. Investing in the bond market is accompanied by additional risks, particularly currency risks.

- Stock markets are a good option for investors who plan to diversify their portfolio.

- Real estate - a promising direction for investments in the economy of developing countries is the acquisition of real estate. For example, in Indonesia, particularly on the island of Bali, according to experts, the amount of net profit from the sale of apartments purchased in Bali during the construction phase will be 44% in three years. When renting real estate, you can return the investment in 5-6 years. However, the investor should carefully choose a developer, it is better if he has international work experience. It is also important to pay attention to the type of real estate and the location. A profitable investment option in Bali is the purchase of premium apartments ANTA Residence Canggu from the reliable international developer ANTA Group.

Turkey also has an attractive real estate market where you can get a high return on investment. Most investors prefer to buy business-class apartments in Turkey, because such an investment is a good option, both for living and for investments. Read more about the advantages of investing in real estate in Turkey here.

How to diversify real estate investments? More details at the link.

Useful tips for investors

Anton Taranenko is the founder and CEO of Visit Ukraine and Visit World online platforms and the owner of the international development company AntaGroup:

Before investing, carefully research the country, industry and companies you are interested in. Look for reliable sources of information, it is better to seek advice from financial experts.

Also remember that economic growth in developing countries can be volatile, so avoid making hasty decisions based on short-term fluctuations.

Be sure to keep an eye on geopolitical events, economic indicators, and regulations that may affect your investments. This information will help you make more informed decisions.

Investing in the economies of developing countries offers investors prospects for development and growth, but it also has certain risks. Therefore, in order to get the maximum profit, it is important to approach investments with caution, a well-thought-out strategy and reliable partners.

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Daria Rogova, Head of Insurance at Visit World

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