- Crowdfunding in Dubai. What you need to know about business financing in the UAE

Crowdfunding in Dubai. What you need to know about business financing in the UAE


Even the most brilliant innovative idea will never be implemented without sufficient funding, without crowdfunding. The UAE authorities are making significant efforts to diversify the country's economy and attract foreign investors, talented and professional people. In addition to the fact that there are no taxes on profits, the withdrawal of capital, as well as import and export duties for companies of any type in free zones of the country, various forms of financing sources, including crowdfunding, are available for business here. All this creates ideal conditions for the development of a promising young company. You can attract start-up capital in the following ways:

  • Public finance (crowdfunding);
  • Financing by credit (loans);
  • Investment financing

It should be noted that the area of crowdfunding in the UAE is still developing. In the early stages of company development, financing can be obtained from the Government fund, for example, the Expo 2020 fund, Khalifa fund, ICT fund. Despite its low-risk appetite, venture capital in the UAE is the most affordable for equity investments. The regulatory framework that was established to regulate crowdfunding relates to loans-based financing. Unlike other countries, in the UAE, this model is the most popular one.

Dubai Financial Services Authority has developed a legal framework with the appropriate conditions for the development and provision of financial services for existing platforms in the UAE. Besides, the operators of such platforms should have the necessary systems and control tools. The transparency of the interaction of both parties involved in crowdfunding (lenders and borrowers) plays an important role, as well as the due diligence of all users of the platform. For the platforms to function optimally, customer tools must be protected and shared. Also, it is necessary to implement the rules that apply to any objects/platforms that allow the transfer of rights or obligations under a loan agreement between lenders. Another essential aspect is to ensure the protection of the rights of all participants and provide them with the necessary guarantees remains. These initiatives contribute to the further growth of small and medium-sized businesses and the development of the crowdfunding market in the UAE.

Crowdfunding platforms in Dubai, UAE

It turned out that crowdfunding in Dubai, UAE is a viable source for financing various projects and startups at different stages. Moreover, crowdfunding in the UAE is developing much faster than in other countries of the world. For example, Zoomal in the UAE was created to provide small financial assistance to projects that require no more than $5,000; it uses the same model as the Kickstarter service in the USA. PiSlice provides online microcredit, Eureeca provides financial funds in exchange for stocks.

Therefore, you can consider the option of launching your startup in Dubai, UAE. Еhere is everything you need In terms of crowdfunding here.

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