13 07 2020

Business financing in the UAE. Crowdfunding

Business financing in the UAE. Crowdfunding

The United Arab Emirates is widely known throughout the world in the business environment due to the almost complete absence of taxes, the absence of export and import duties, a developing economy and many other factors that ensure the influx of businessmen and qualified specialists from around the world. The UAE annually attracts millions of dollars of foreign investment to develop business in all areas, from oil and gas processing to agriculture and light industry. Ideal business conditions in the UAE attract not only experienced entrepreneurs, but also young, promising startups.

It is no secret that any starting business needs investment. For business-beginners and startups crowdfunding is an alternative way to attract capital and investment for the implementation of their projects.

Dubai's Financial Services Regulatory and Supervision Authority (DFSA) has been established in the UAE and regulates the regulatory framework for crowdfunding and crowdfunding platforms. This Authority is the first of its kind in the Persian Gulf region.

The basis of the country's GDP is small and medium-sized businesses, which provides more than 60% of the total mass of GDP. The created regulatory framework stimulates the development of alternative types of financing for small and medium-sized businesses, such as crowdfunding, the size of which in 2020 reached a level of over 200 billion US dollars.

The main crowdfunding platforms in the UAE are:

    Beehive is the first online trading platform for financing and lending created in the UAE. The resource directly connects with investors the enterprises that need investments;

   • Eureeca is the first global platform to share crowdfunding. The platform provides companies with access to capital and allows investors to buy shares of promising companies;

   • Zoomaal - the platform is the most popular platform for companies that need investments of up to 5 thousand US dollars. The site was created by large Arab investors. The resource is very popular among entrepreneurs, designers and scientists;

    • Pi Slice is a web-based social platform, which is a channel for financing microfinance organizations (provides microloans).

In compare with other countries, venture capital funds and venture capital itself in the UAE are the most affordable tipe for business investment. Financing in the UAE can also be obtained from various state funds - the Mohammed Bin Rashid Innovation Fund (MBRIF) or the Khalifa Foundation.