2021KEY INSIGHTS FOR DUBAI - ENTREPRENEURS AND INVESTORS - Dtec
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DUBAI STARTUP OUTLOOK 2021 KEY INSIGHTS FOR ENTREPRENEURS AND INVESTORS
DUBAI
STARTUP OUTLOOK 04 Message from Dubai Chamber of Commerce and Industry
2021
05 Message from Dubai Silicon Oasis Authority
06 Executive Summary
UAE ECONOMY AND COMPETITIVE
KEY INSIGHTS FOR
ENTREPRENEURS AND INVESTORS
ADVANTAGE FOR SMES AND STARTUPS
10 Economic Overview
12 Competitive Advantage
16 Government Initiatives
ENTREPRENEURSHIP
ECOSYSTEM IN DUBAI
20 Regulations
23 Incubator Ecosystem
25 Incentives
26 Access to Capital
31 Access and Availability of Talent
INTERVIEWS
15 NATALIA SYCHEVA
Sr. Manager, Special Projects and Entrepreneurship,
Dubai Chamber of Commerce & Industry
19 HANS CHRISTENSEN
Vice President,
Dubai Technology Entrepreneur Campus (Dtec)
27 HASAN HAIDER
Managing Partner, MENA,
500 Startups
29 KUSHAL SHAH
Co-founder,
Dubai Angel Investors
32 DR. ABDULLATIF AL SHAMSI
President & CEO,
Higher College of Technology
04 DUBAI STARTUP OUTLOOK 2021
MESSAGE FROM
DUBAI CHAMBER OF
COMMERCE AND INDUSTRY
THE DUBAI STARTUP REPORT is owned technology incubation campus,
a go-to guide for international startups are among the most active startup
and investors that are keen on exploring ecosystem players.
the Dubai market, as it answers Through Dubai Startup Hub, Dubai
several questions frequently asked Chamber supports the growth of startups
by entrepreneurs. in Dubai by providing them access
Produced by Dubai Chamber of to resources, tools, knowledge and
Commerce & Industry and Dubai Silicon market opportunities that can help them
Oasis Authority, the report is a valuable thrive and grow.
and reliable resource, providing a The launch of the Dubai Startup Report
wealth of practical information about comes as a time when startups are driving
H.E. Hamad Buamim Dubai’s dynamic and fast-growing Dubai’s digital transformation, fostering
President & CEO, startup ecosystem. innovation and playing a crucial role in
Dubai Chamber of This in-depth report offers insights building the emirate’s post-Covid-19
Commerce & Industry
on UAE and Dubai’s economy, business economy. The informative guide supports
environment, competitive advantages, Dubai Chamber’s comprehensive
regulatory landscape and other useful entrepreneurship strategy and ongoing
details related to business setup, free efforts to promote Dubai as a preferred
zones, incubators, SME incentive market for high-potential startups from
programs, access to funding and around the world.
venture capital. I hope you will find it to be a useful
As the leading startup hub in the resource that will help you navigate
Middle East and North Africa, Dubai the Dubai market.
continues to create attractive incentives
for businesses such as a golden card
permanent residency system for expat
investors, a 5-year visa for entrepreneurs
and a program enabling overseas remote
working professionals to live in Dubai while
continuing to serve their employers in
their home country.
To add to that, the emirate offers plenty
of programs, resources and value-added
services that are designed to support the
growth of startups and connect them to
new business opportunities. Dubai Startup
Hub, an initiative of Dubai Chamber and
Dtec, Dubai Silicon Oasis Authority’s wholly
05
MESSAGE FROM
DUBAI SILICON OASIS
AUTHORITY
THE UAE HAS RECENTLY ranked first overall in the region. In the ‘starting a
in the Arab world, in the COVID Economic business’ topic, measuring the number
Recovery Index published by the Horizon of procedures, time, cost and minimum
Research Group. This speaks volumes of capital requirement for a small- to medium-
the status of the nation’s economy and its sized limited liability company to establish
ability to maneuver through turbulent times. and formally operate, the UAE scored 94.8,
In line with the directives of His ranking 17 out of 190.
Highness Sheikh Mohammed bin Rashid With DSOA’s benefits, including 100%
Al Maktoum, Vice President and Prime foreign ownership, zero taxation, state-
Minister of the UAE and Ruler of Dubai, of-the-art infrastructure and facilities,
to diversify Dubai’s and the wider UAE’s fast-track business set-up and licensing
Dr Mohammed Al Zarooni economy, Dubai Silicon Oasis Authority with a dedicated business support team,
Vice Chairman and CEO, has been dedicated to contribute to and access to regional and international
Dubai Silicon Oasis Authority the diversification drive and provide a network of mentors and business
conducive environment for entrepreneurs partners, we are determined to continue
to work and live. supporting Dubai’s ecosystem to boost
Though start-ups do not have the its global competitiveness and bolster the
market share, nor the financial power, of emirate’s rankings.
multinational companies to deal with the
economic downturn, many experts foresee
them to play the bigger role in the global
economic recovery post-COVID-19. There
is no doubt in the potential that start-ups
have, from innovation to agility. Hence,
our responsibility to ensure entrepreneurs
have the appropriate backing, advisory
and financial, increases. DSOA, through
its various initiatives such as the Dubai
Technology Entrepreneur Campus (Dtec)
and the Dubai Smart City accelerator
program, is committed to provide all the
necessary support to technology-focused
start-ups in Dubai.
The World Bank Group’s Doing Business
2020 study, a report that compares
business regulation in 190 economies,
ranked the UAE 16th on the ease of doing
business index, the strongest performer
06 DUBAI STARTUP OUTLOOK 2021
EXECUTIVE
DUBAI IS ONE OF THE LEADING and
most attractive cities to start a business, as
one of the world’s most open economies,
which is strategically located between
SUMMARY
Asia, Africa, and Europe. Foreign direct
investment in Dubai reached $3.26 billion
in the first half of 2020, placing the emirate
fourth globally in the number of FDI
projects. A Financial Times’ fDi Market
report ranked Dubai 11th globally and
first in MENA in terms of venture capital
investments in 2020. UAE-based startups
raised $577 million in venture funding
– 56% of the MENA total for 2020, with
Dubai startups estimated to account for
over half that figure.
The emirate maintains a leading
position in the region for ease of doing
business as well as conducive regulatory
frameworks. As part of the UAE’s Cabinet
reshuffle in July 2020, the position of
Minister of State for Entrepreneurship
and SMEs was created to lead national
initiatives to promote entrepreneurship
and strengthen the country’s SME sector.
This is supported by government efforts
to enhance the private sector’s economic
contribution, as part of the Dubai Vision
2021, through incentivization and robust
commercial regulation. Government
incentives include business support,
funding, cost reduction and overseas
promotion. Regulators, at both federal and
emirate level, are continuously developing
legal and regulatory framework for SMEs
and alternative funding channels, ensuring
alignment with international standards.
Dubai’s wide range of free zones sits
at the heart of its startup ecosystem,
including world-leading zones Dubai
07
“HUMAN BEINGS, THEIR IDEAS,
INNOVATIONS, DREAMS, AND
CONNECTIONS ARE THE CAPITAL
OF THE FUTURE. BECAUSE
WHERE GREAT MINDS GO
TODAY, GREAT THINGS WILL
HAPPEN TOMORROW.”
H.H. Sheikh Mohamed Bin Rashid
TWITTER @HHShkMohd
Silicon Oasis (DSOA), Dubai International received additional funding through venture
Financial Centre (DIFC), Jebel Ali Free capital during the startup phase in 2019,
Zone (Jafza) and Dubai Multi Commodities according to a survey by Dubai SME.
Centre (DMCC), offering new businesses Dubai is home to a diverse and well-
several advantages including 100% foreign educated international workforce. The 2020
ownership, tax exemptions and easier IMD World Talent Ranking placed the
startup and recruitment processes. They UAE 24th globally, 1st in the availability of
also host many business accelerators competent senior managers and 2nd in
and incubators, such as DIFC’s FinTech the availability of skilled labor and senior
Hive and Dtec at DSOA, which offer managers with significant international
support through startup incubation experience. It also secured top 10 places
and venture capital funding. The Dubai in terms of employee training, worker
Future Accelerators program facilitates motivation and foreign highly skilled
partnerships between public and private personnel. Catering to the evolving job
sector organizations and startups in Dubai. market requirements, higher education
With aims to position Dubai as a leading institutions are well-positioned to act
city of the future and a hub for innovation as innovation drivers, promoting and
and technology, Fintech is among the nurturing an entrepreneurial culture, as well
most dynamic sectors driving growth in as facilitating a startup ecosystem from
business startups in the UAE which is ideation to commercialization.
home to a third of the Fintech firms in This report primarily sheds light
the MENA region and over half of Fintech on the startup ecosystem in Dubai,
investments. DIFC’s FinTech Hive offers while touching upon some entities and
accelerator programs for Fintech startups, initiatives that also focus on SMEs.
supported by a $100 million DIFC FinTech Although the terms startup and SME are
Fund that has so far invested in four commonly used interchangeably, they
Fintech companies, are in fact different. Generally, startups
The growth of the SME sector is are businesses with high potential of
critical to the government’s economic growth, digitally enabled, with relatively
diversification strategy and as such it is less capital expenditure, while SMEs offer
continually looking for ways to raise access more familiar or conventional products and
to funding for startups. Alternative funding services. The report also offers key insights
sources, including venture capital and for investors looking to invest in Dubai
crowdfunding, are particularly important and UAE startups.
for startups and SMEs whose lack of
assets and business track record make
obtaining financing more challenging.
Venture capital activity in Dubai is thriving,
serving as a launch pad for investments
into the UAE. Around 9% of SMEs in Dubai
08 DUBAI STARTUP OUTLOOK 2021
DUBAI STARTUP
ECOSYSTEM
GOVERNMENT
SUPPORT
Dubai Startup Hub provides guidance for Dubai SME promotes innovation and
entrepreneurs and leverages PPPs to leadership in the SME sector and
promote innovation and develop Dubai’s launched several initiatives to promote
startup ecosystem. SME development.
Market Access (2017) SME Fund (2012)
Unique platform enabling innovative startups to interact Mohammed bin Rashid Fund for SMEs, providing
and collaborate with established corporations. financing solutions for innovative businesses and
developing Emirati entrepreneurs.
Startups
Applied
Startups
Pitched
Startups
Matched
SME FUNDS
LOAN SCHEMES
(signed POCs, etc)
Emirati Development Programme (2020) CREDIT BANK SEED CAPITAL INVOICE/LPO
In partnership with Dtec. Aims to increase SCHEME LOAN FINANCE
youth participation in the private sector by
launching their own businesses or joining
private sector startups.
LOCALISED TAILORED PRIVATE Incubators and Accelerators Regulations (2018)
TRAINING MENTORSHIP SECTOR JOB ‘Incubators and Business Accelerators’ regulations
COURSES SUPPORT OPPORTUNITIES supporting innovative entrepreneurs, particularly in
mentoring and monitoring business growth.
OVERSEAS
NETWORKING EXHIBITION
EXPANSION Cost of Doing Business Index (2019)
EVENTS OPPORTUNITIES
SUPPORT In partnership with Dubai Chamber. Index
evaluating the cost of doing business for
SMEs in Dubai. 09
STARTUP
FREE ZONES INVESTMENT ENABLERS
Free zones in Dubai
$. bn
FDI in Dubai (H1 2020)
Accelerators
$ mn
% foreign ownership
Zero corporate taxes
No import and export duties
% repatriation of revenues and profits
Reduced documentation VC Investments in Dubai (H1 2020)
Smoother recruitment and visa processes st in MENA th Globally
Free Zones at the
Center of Startup Creation
Active Investors
in Dubai Startups
Incubators
Coworking
Spaces10 DUBAI STARTUP OUTLOOK 2021
UAE ECONOMY AND
COMPETITIVE ADVANTAGE
FOR SMES
AND STARTUPS
ECONOMIC be the largest in the region’s history, is
planned to host showcases from 190
OVERVIEW countries and attract 25 million visitors
from across the globe. Dubai Expo 2020 is
expected to add $33.4 billion to the UAE
economy between 2013 and 2031 based
ECONOMIC PRESSURES TO SPEED on assumptions of lower future growth,
UP DIVERSIFICATION PLANS in a study by EY commissioned by the
By the end of 2019, the UAE economy Dubai government.2
had been on track to stronger economic Measures introduced by the federal
growth, recovering from the impact of the government in the first half of 2020
oil price decline of 2016. However, the in response to Covid-19 are also
global outbreak of the Covid-19 pandemic expected to support the UAE’s economic
has brought the world to the brink of deep recovery. The measures included a
economic recession. Consequently, the renewable six-month suspension of work
IMF, in its latest World Economic Outlook, permit fees and reductions in labor and
lowered its forecast for global economic other expenses to cut the cost of doing
growth to -4.4% and UAE GDP growth business, support small business and
for 2020 to -6.6% from a pre-Covid-19 bring forward major infrastructure projects.
projection of +2.5%.1 The UAE also Stimulus packages totaling $70 billion
faces the added challenge of a new were announced by the government to
drop in oil prices. counter the economic impact of the virus
There remains a widespread and protect local businesses, particularly
expectation of a V-shaped recovery in SMEs.3 This stimulus supplemented
2021, in which the UAE would derive packages introduced by the governments
significant assistance from the staging of of Dubai and Abu Dhabi. The Dubai
Dubai Expo 2020, which was postponed government’s package included a freeze
to October 2021 due to the Covid-19 on the 2.5% market fees levied on all
outbreak. The mega event, deemed to facilities operating in the emirate. AlsoUAE economy and competitive advantage for SMEs and startups 11
DUBAI’S TOP TRADING PARTNERS 2019
Total bilateral trade value (AED billion)
China
India
USA
Switzerland
offered was a refund on 20% of custom
fees placed on imported products to be
sold in Dubai markets, as well as the
cancellation of the AED 50,000 ($13,600)
bank guarantee or cash required for
customs clearance.4 The UAE extended its Saudi Arabia
stimulus package in November 2020, with
new measures allowing banks to defer
payment of loans until June 2021.
The ramifications of the Covid-19 Source: Dubai Customs
pandemic will prompt the UAE government
to accelerate its economic diversification
plans. Key target sectors include aviation,
commercial trade, tourism, renewable
energy, manufacturing, media, financial
services, and healthcare. This will
potentially further boost the role of the
70bn
private sector in the economy, and SMEs
in particular. Growing the non-oil sector’s
contribution to the country’s GDP was a
key plank of the UAE’s Vision 2021. That
contribution stood around 70% in 2018
and was targeted to reach 80% by 2021.5
$
UAE government stimulus
SMEs make up 99% of private sector
package to counter the
companies in Dubai and estimated to
economic impact of the
contribute around 46% of the emirate’s Covid-19 pandemic and
GDP and 53% of the UAE’s GDP in 2019.6 protect local businesses,
The UAE federal government aims to particularly SMEs.
expand the latter to 60% by 2021.12 DUBAI STARTUP OUTLOOK 2021
COMPETITIVE DUBAI AMONG WORLD’S BEST
CITIES TO START A BUSINESS
ADVANTAGE Dubai is ranked among the most attractive
cities in the world for entrepreneurs to
start a business, particularly in the import/
export sector and in terms of logistics,
STRATEGIC LOCATION costs and market connectivity, where it
SUPPORTED BY WORLD-CLASS ranks ninth, according to a recent study.
TRANSPORT LINKS Its numerous advantages are attracting
Dubai is one of the world’s most open growing numbers of new businesses
economies, which is strategically located to the emirate. The total number of
at the confluence of Asia, Africa, and SMEs and startups operating in Dubai
Europe. The emirate and its advanced air was estimated at 151,875 in 2019,
and shipping links as well as its wide network representing a CAGR of 9% since 2008,
of free zones make it an attractive base for when the number stood at 72,695.
companies wishing to participate in global Services constituted the largest segment
value chains. It is served by the biggest in 2019, with a 47% gross value-add
and by far busiest port in the Middle East, contribution, followed by trading with 43%
the Jebel Ali port, and the world’s largest and manufacturing with 10%.10
international airport. Fintech is among the most dynamic
Foreign direct investment (FDI) in Dubai sectors driving growth in business
grew 135% year-on-year in the first half of startups in the region, becoming the top
2019 to a record AED 46.6 billion ($12.7 industry in the MENA region in terms
billion). During the first six months of 2020, of deals in 2018 and 2019, with 39%
Dubai attracted AED 12 billion ($3.26 billion) annual growth in startups since 2012.11
despite the onset of a global recession due to The UAE is home to a third of the Fintech
the Covid-19 pandemic, representing a vote firms in the MENA region, and Dubai
of confidence from international investors. is recognized as one of the world’s
These investments were channeled leading Fintech hubs.
into 190 new projects in key sectors Other types of technology startups
including technology, e-commerce, and are also thriving in the UAE and Dubai,
pharmaceuticals, according to data from and multinationals have begun looking
Dubai Investment Development Agency to these firms as possible acquisition
(Dubai FDI). This placed Dubai third targets. Dubai’s strong startup ecosystem,
globally in greenfield capital flows and welcoming investment environment, and
fourth in the number of FDI projects.7 accelerator programs support are making
Dubai’s international trade has grown tech startups in Dubai especially attractive,
exponentially over recent decades. Since as shown by the recent acquisitions
2010, the value of Dubai’s external trade grew of two notable unicorn companies:
52%. In 2019 alone, non-oil foreign trade rose vehicle hire firm Careem by Uber in
6% to AED 1.37 trillion ($370 billion), boosted a $3.1 billion deal, and e-commerce
by an export growth figure of 22%.8 Around platform Souq.com by Amazon for $580
46% of SMEs in Dubai engage in the export million. More recently, Delivery Hero,
of goods or cross-border supply of services, acquired Dubai-based grocery delivery
with the biggest proportion (80%) coming platform, Instashop, for US$360 million
from the manufacturing sector.9 in August 2020.UAE economy and competitive advantage for SMEs and startups 13
“TWO YEARS AGO, AMAZON
ACQUIRED THE MULTI-BILLION
DIRHAM SOUQ.COM AND TODAY,
UBER ACQUIRED CAREEM FOR
DH11 BILLION. THESE GIANT
COMPANIES FLOURISHED FROM
THE “DESERT” OF DUBAI.”
H.H. Sheikh Mohamed Bin Rashid
TWITTER @HHShkMohd
which had introduced several reforms in
GCC RANKINGS IN THE WORLD BANK recent years that created a more conducive
EASE OF DOING BUSINESS INDEX 2020 environment for private businesses
including SMEs. The World Bank report
pointed to several measures introduced by
COUNTRY 2015 RANKING 2020 RANKING
the UAE in 2018 and 201912, which included
UAE 22 16 \ cutting the cost of starting a business
by reducing fees for business
Bahrain 53 43 incorporation;
Saudi Arabia 70 62 \ increasing minority investor protections
by allowing for disqualification of
Oman 66 68 directors in cases of prejudicial
conflicts of interest;
Qatar 50 77
\ introducing a value added tax;
Kuwait 86 83
\ reducing export process times by
Source: World Bank’s Ease of Doing Business Index 2020 digitizing certificates of origin, and
\ lessening import costs by issuing
certificates of conformity covering
multiple shipments.
UAE LEADS GCC IN EASE The World Bank also listed the UAE
OF DOING BUSINESS, among countries showing the best
SUPPORTED BY REFORMS regulatory performances in terms of
The UAE will need to preserve and solidify building quality controls; the time and
its reputation as a leading destination to cost of accessing electricity; and director
do business to maintain its economy’s liability. In recent years, the UAE has
resilience to the shocks presented by the allowed 100% foreign ownership of
Covid-19 pandemic and oil price collapse. companies in a range of industries, eased
According to the World Bank’s Ease of visa restrictions, provided incentives for
Doing Business Index 2020, the UAE SMEs, and introduced a new insolvency
is the 16th best country in the world for law to aid UAE residents in clearing bad
doing business. It maintained its leading debts. Nonetheless, the UAE federal
position in the GCC over the past five government has ambitions to improve its
years, followed by Bahrain in 43rd spot and Ease of Doing Business ranking and plans
Saudi Arabia at 62. to introduce further measures that will
Supporting this ranking are the include enhancing legislation and making
government’s efforts to boost the private doing business in the country more time-
sector as part of its Vision 2021 strategy, and cost-efficient.14 DUBAI STARTUP OUTLOOK 2021
JUNKBOT
ESTABLISHED IN DUBAI, 2015
A successful graduate of Dubai Startup Hub programs,
JunkBot provides a DIY kit that enables young people to build
robots and gadgets out of all kinds of household objects such
as bottles, spoons, cardboard, or unwanted CDs.
JunkBot was founded in 2015 by a group of friends in
Kerala, India, inspired by the Thomas Edison quote: “To
invent, you need a good imagination and a pile of junk.”
The fledgling business moved to Dubai due to the emirate’s
broad and diverse demographic base. Also, the wide variety
of schools and curricula made it a great testbed for the
company’s offerings.
The company received support from Dubai Startup Hub, which
enabled JunkBot to seamlessly connect and interact with
corporate and government bodies to pitch its business. Today,
its products are sold to schools, governments, corporates, and
retail and online stores. Its clientele includes Dubai Electricity
and Water Authority, the Ministry of Education, Ministry of
Finance, Microsoft, PWC, ENOC, and Gems Schools.
VENTURE CAPITAL with Dubai startups estimated at over
THRIVING IN UAE half the figure.13
Venture capital activity in the UAE is In Dubai, venture capital funds
thriving particularly in Dubai, which serves range in size from family offices to
as both a hub for expansion into other multinational corporations. Dtec Ventures,
countries in the Middle East and as a for example, is the venture capital fund
launch pad for investments into the UAE. of DSOA dedicated to investing in
Firms are increasingly prepared to provide early-stage technology firms. It invests
seed capital financing and commercial $100,000-500,000 at the early stage and
assistance including incubator services for can support companies with follow-on
new startups, especially in the technology funding. Dtec Ventures made its first
and other digital sectors. investment in 2013 and to date has
Dubai-based startups are attractive invested in 30 firms.
to venture capital investors because One of the leading venture capital
they are typically run by seasoned firms in Dubai is BECO Capital, which
industry professionals and executives raised $100 million for its second startup
who leverage extensive connections and investment fund in October 2019, $20
a deep understanding of bureaucratic million more than it had initially targeted
processes. In addition, B2B startups in due to the fast-growing appetite for
Dubai have access to a lucrative corporate technology startups. This followed the
market including many of the region’s success of BECO’s first fund, which
largest companies. had seen four exits including the $3.1
A Financial Times’ fDi Market report billion acquisition of ride-hailing startup
ranked Dubai 11th globally and first Careem by its rival Uber. The sheer size
in MENA in terms of venture capital of this acquisition has attracted many
investments in 2020. UAE-based more venture capitalists to the UAE
startups raised $577 million in venture in the hope of unearthing new such
funding – 56% of the MENA total in 2020, unicorn companies.UAE economy and competitive advantage for SMEs and startups 15
INTERVIEW
NATALIA SYCHEVA
Sr. Manager, Special Projects and Entrepreneurship,
Dubai Chamber of Commerce & Industry
Since its launch by Dubai Chamber in 2017, what have been the most notable
achievements of its Market Access program including the recent revamp in 2019?
The Market Access program has seen remarkable growth and success since its launch in
2017, evolving from a deal-facilitating platform to a comprehensive program connecting
leading companies to a growing network of promising startups specializing in advanced
technologies. So far, 13 corporate and government entities have benefited from the
program and we have successfully graduated almost 80 startups, fully equipped with tools
and knowledge to grow their innovative ventures from Dubai.
In 2020, we transformed the program into a digital format, which attracted greater
participation among international startups and corporates that are keen to explore the
Dubai market. In addition, a trend among government entities and businesses to accelerate
digital transformation plans post-Covid-19 has translated into growing interest in Market
Access this year. During H1-2020, we received startup applications from more than 19
countries, reflecting Dubai’s position as a testbed for cutting-edge technologies and
preferred market for high-potential startups from around the world. In an effort to meet
this growing demand, we expanded Market Access into a membership-based program
that corporates and startups can utilize on a yearly basis, while also including additional
benefits that meet the changing needs of businesses in Dubai.
How will the impact of Covid-19 transform the startup and SME landscape in Dubai? What
are Dubai Chamber’s key efforts in helping the businesses navigate this transformation?
While Covid-19 posed some challenges to startups and SMEs in Dubai, it has also created
an opportunity for our members to innovate, experiment and reinvent existing business
models. Our startup members have seen more success in raising funds, with funding
raised during H1-2020 amounting to 90% of the value raised during 2019 as a whole. This
is a positive sign that businesses are looking to startups to kickstart new projects and
take digitalization efforts to the next level. B2B technology startups, in particular, have
demonstrated greater resilience, to which a successful second quarter for the Market
Access program is a testament.
We have seen a growing interest among entrepreneurs in educational and fundraising
opportunities as they prepare for post-COVID-19 recovery, while several corporate
professionals have expressed interest in launching their own entrepreneurial ventures in
responses to a changing job market.
Dubai Chamber has taken quick action to ensure business continuity and support member
businesses during the Covid-19 pandemic. Our strong focus on digital transformation has
enabled us to provide our customers and members with uninterrupted value-added e-services.
Dubai Chamber launched Business Connect — a dedicated portal assisting companies as they
navigate new challenges created by the pandemic. Beyond that, we have organized a series of
webinars advising business leaders on important and timely issues, covering everything from
preventative measures and employee safety to e-commerce best practices and legal advice.16 DUBAI STARTUP OUTLOOK 2021
DESIGNHUBZ
ESTABLISHED IN DUBAI, 2019
A finalist in Dubai Chamber’s cross-border mentorship
programs, Designhubz has developed a 3D capturing
technology that enables brands and retailers to create
interactive e-commerce stores on their online platforms.
This technology uses fully automated robotic rigs to enable
instant digitization of physical inventories; and a software that
enables product visualization in web-ready 3D and Augmented
Reality (AR). This offers customers a virtual “try before online
buying” experience. Designhubz technology is being used by
some of the largest global brands such as IKEA.
Designhubz joined Abu Dhabi-based Techstars Hub71 in 2020
as part of a “special Covid-19 batch” of six disruptive startups
from various industries. The AR startup has raised a total of
$595,000 in pre-seed funding from Colorado-based Techstars
and Techstars Hub 71. Dubai Chamber has established a
dedicated entrepreneurship arm, the Dubai
Startup Hub, which provides guidance for
entrepreneurs and leverages public-private
partnerships (PPPs) to promote innovation
and develop the emirate’s startup
ecosystem. It has supported more than
8,000 entrepreneurs in the UAE and abroad
since its inception in 2016. In 2019, Dubai
Startup Hub forged collaborations with 10
ecosystem partners, enabling it to serve
more new businesses through various
GOVERNMENT initiatives, programs, and events.
In response to ever-growing interest of
INITIATIVES tech startups in the Dubai market, Dubai
8,000
Startup Hub has launched two programs
focused on scaleups, Dubai Tech Tour and
Scaleup Dubai.
DUBAI CHAMBER PROVIDING In February 2020, Dubai Startup
INTERNATIONAL SUPPORT Hub, in partnership with Dubai
entrepreneurs in the UAE FOR DUBAI STARTUPS Technology Entrepreneur Campus (Dtec),
and abroad supported The Dubai government has introduced a launched the Emirati Development
by Dubai Startup number of measures to boost its non-oil Programme. The program aims to
Hub since 2016. private sector, particularly as oil makes increase Emirati talent participation in
a limited contribution to the emirate’s the private sector by launching their
GDP compared with about 40% for the own businesses or joining private sector
wider UAE. Under the Dubai Plan 2021, startups. This will assist Dubai Chamber
40,000 new startups were planned to in identifying new talent and providing the
be created over 2017-21, generating tools and skills needed to capitalize on
370,000 new jobs.14 commercial opportunities.
The Dubai Chamber of Commerce and
Industry (Dubai Chamber) is an important DUBAI SME CHANNELING
body supporting new businesses, playing GOVERNMENT SUPPORT FOR SMES
a vital role in promoting Dubai as an SMEs in Dubai receive support from a
international business hub through a dedicated government body – Dubai
worldwide network of representative SME – promoting innovation and
offices. It also drives competitiveness and leadership within the sector as one of
business growth in Dubai by continually its key aims. It has launched several
streamlining its process, making it easier to initiatives to promote SME development,
set up a business. including providing business developmentUAE economy and competitive advantage for SMEs and startups 17
BAYTUKI
ESTABLISHED IN DUBAI, 2020
Baytuki is an artificial intelligence (AI)-driven smart real estate
platform. Baytuki is a platform that aims to empower, educate,
and enable Emirati women to make micro-investments in real
estate. Its goal is to empower, educate, and enable Emirati women
of all ages and income brackets towards financial prosperity.
In an effort to promote greater financial and investment awareness
among Emirati women, Baytuki will offer a complementary class
on personal and micro investments to clients making investments
through its platform. In addition, clients will have access to more
advanced, paid, financial courses.
Founded by Latifa bin Haider, a student at the American University
of Sharjah, Baytuki was one of the winners in the first phase of
the pilot edition of the Emirati Development Programme in 2020.
Following the second phase and based on the demonstrated
and advisory services, assisting in progress within the program, Baytuki was selected to receive
launching new businesses and training to additional business acceleration support. The package includes a
entrepreneurs and SME owners. one-year free company setup at Dtec, a mentorship session offered
In March 2019, the Dubai government by Dtec Ventures, in addition to a showcase at Dubai Chamber’s
introduced a new set of measures stand at the 2020 GITEX exhibition and access to public speaking
to assist SMEs:15 opportunities with Dubai Startup Hub.
\ plans to pay SMEs within 30 days rather
than the previous standard of 90 days
\ reduction in insurance costs from 2-5%
to 1-3%, with no impact on eligibility for
government tenders
Dubai’s wide and varied array of
\ government promise to allocate 5% free zones is key to the development
of its capital projects to SMEs, which of the SME and startup ecosystem,
could be worth up to AED 400 million offering a number of advantages that
($190 million). are crucial in supporting SMEs and
startups. These include
In a recent initiative, Dubai SME
partnered with Dubai Chamber in April \ 100% foreign business ownership,
2019 to launch an index that will evaluate \ exemption from personal and
the cost of doing business for SMEs in corporate taxes,
Dubai. This agreement aims to develop
new plans and initiatives to ensure a \ ability to repatriate all invested
competitive environment for SMEs at capital and profits,
various stages of growth.
Later, in December 2019, Dubai SME \ an absence of currency restrictions, and
launched its own new business incubator \ easier startup and
— Bedayat — to promote entrepreneurship recruitment processes.
and innovation. The initiative was launched
in conjunction with the Sustainable City in Dubai’s free zones also host many SME
Dubai to provide support, follow-up, and accelerators and incubators.
guidance to SMEs. In September 2019, Dubai achieved
its highest-ever position in the Global
FREE ZONES AT THE CENTER Financial Centres Index (GFCI) when
OF STARTUP CREATION it rose four spots to eighth place.
About 30% of free zones in the Middle Dubai ranked among the world’s
East are located in Dubai, including leading 15 financial centers in terms
world-class zones such as DSOA, DIFC, of its business environment, human
Jafza and DMCC. capital, infrastructure, financial sector18 DUBAI STARTUP OUTLOOK 2021
ALGODRIVEN
ESTABLISHED IN DUBAI, 2017
AlgoDriven operates a proprietary vehicle data platform that
makes buying used cars easier by streamlining the process of
assessment and evaluation. Its core product is the EvalExpert
mobile app, which is used by car dealerships to evaluate cars for
purchase or to trade in against new cars.
Launched in 2017, AlgoDriven raised startup financing from
Its flagship startup hub Dtec was
several funds including Oman Technology Fund (OTF), Social
launched in 2015 and is now the largest
Capital, 500 Startups and Dtec Ventures.
technology entrepreneur incubator in
AlgoDriven is one of a few startups that have had an international the region. Since its inception, Dtec has
presence from the outset, operating in both the UAE and supported the setup of more than 1,200
Australia. AlgoDriven is focusing on the MENA region with plans companies and combined funding of more
to further expand in Asia and possibly move further west. than $300 million.
In 2017, DSOA launched the Dubai
Smart City Accelerator, the first of its
kind in the region. In 2020, Dtec opened
a second facility located within Dubai
Silicon Oasis’ prototype smart city, Dubai
Digital Park, will house a further 800
development, and reputation, according startups and SMEs.
Since its inception, to the report. In another survey, DMCC
Dtec has supported the was ranked first for the sixth year DUBAI FREE ZONES COUNCIL OFFERS
setup of more than running in the Financial Times’ fDi FIVE-POINT STIMULUS PACKAGE
1,200
Magazine’s 2020 Global Free Zones of In 2019, the Dubai Free Zones Council
the Year awards. announced the upcoming launch of a
Another of Dubai’s world-leading free “One Free Zone Passport” that would
zones, the DIFC serves as a financial hub allow firms to operate across the emirate’s
linking the Middle East, Africa, and South different free zones, thereby making
companies and combined
funding of more than Asia. DIFC has established FinTech Hive in operating in Dubai easier and more
300
2017, which offers accelerator programs efficient for entrepreneurs to start and
for Fintech startups and opportunities build businesses. The emirate also plans
to connect with the region’s largest to launch the Free Zone Window Initiative,
$ mn stakeholders and financial institutions.
Later in 2019, the financial center
which will help investors identify the most
suitable free zone for their requirements
launched the $100 million DIFC FinTech through a simple online process.
Fund that has so far invested in four Later in March 2020, the Council
Fintech companies, aiming to scale announced an economic stimulus
up startup- and growth-stage Fintech package to help firms operating within
ventures. An expansion followed in January free zones to overcome the economic
2020 with the launch of a new funding impact of Covid-19 and support Dubai’s
accelerator program, FinTech Hive Scale Up, economy. The package includes five
which enables Series A+ start-up companies key initiatives
to grow through developing strategic
partnerships and accessing investment \ postponement of rent payments
resources through the DIFC FinTech by six months;
Hive ecosystem. \ facilitating payment instalments;
Dubai is also home to Dubai Silicon Oasis
Authority (DSOA), which offers business \ refunding security deposits
support services, startup incubation and guarantees;
and venture capital funding services for
\ cancellation of fines; and
technology-related businesses within Dubai
Silicon Oasis. One of the first free zones to \ permitting temporary contracts allowing
actively support startups, DSOA founded free movement of labor between
its venture capital unit in 2012, alongside its companies operating in the free zones
Silicon Oasis Founders incubator. for the rest of 2020.UAE economy and competitive advantage for SMEs and startups 19
INTERVIEW
HANS
CHRISTENSEN
Vice President,
Dubai Technology Entrepreneur Campus (Dtec)
Since 2013, Dtec Ventures has provided early-stage and seed investment
to 30 start-ups across a spectrum of digital sectors. How has this
contributed to the growth and development of Dtec as start-up ecosystem?
As one of the first government owned free zones in the Middle East
region, Dubai Silicon Oasis Authority (DSOA) launched a Venture
Capital (VC) program to provide startups with much-needed access to
capital. By providing funding to companies like The Luxury Closet and
Nabbesh in their early stages, we helped to create the foundation for the
local startup ecosystem. With the launch of Dtec in 2015, the VC unit
became an integral part of it. Companies based in Dtec have direct access
to the Dtec Ventures team, which is a unique benefit of establishing
operations in DSOA-owned tech-coworking space. Dtec Ventures not
only invests in startups, but also utilizes its expertise to offer advice
and guidance to help founders. Moreover, we leverage our wide referral
network of contacts to help match promising startups and entrepreneurs
with strategic partners and potential customers.
In line with the mission of the DSOA, Dtec Ventures aims to develop the
wider UAE startup ecosystem. We are committed to continue investing in
the UAE’s top talents and entrepreneurs through Dtec Ventures.
The Fintech industry has been ranked first in the MENA region in terms
of VC in the last couple of years. Do you see this trend continuing in the
future? Which areas of Fintech will attract the most funding?
Yes, we believe the trend will continue with the Fintech industry being
among the top sectors in terms of deal activity and funding. Changes
in the regulatory environment (e.g. regulatory sandbox, new licenses),
the opening of incumbent players and technology advancements like
blockchain and AI, have significantly lowered the barriers to entry and
allow new entrants to bring innovative solutions to the market.
We see great potential for digital services that help to address financial
inclusion for underserved segments, providing smart personal finance
management solutions, innovative mobile payment solution, efficient
money transfer services, or accessible investing. The emergence of
Neobanks has started to improve the customer experience and economics
to serve consumers and small businesses. Blockchain based solutions
are used already to make cross-border transfers cheaper and faster and
thereby changing traditional remittance channels. We are also optimistic
on the neighboring market Insurtech.20 DUBAI STARTUP OUTLOOK 2021
ENTREPRENEURSHIP
ECOSYSTEM
IN DUBAI
REGULATIONS As part of the 2020 UAE government
restructure, the dedicated position of
Minister of State for Entrepreneurship and
SMEs was created among three senior
CONTINUOUS REGULATORY ministerial positions of the UAE Ministry of
ENHANCEMENT SUSTAINING SMES Economy. The minister’s mandate includes
Commercial regulation in the UAE designing national initiatives to strengthen
is ideal for starts-ups as well as the UAE’s SME sector, promoting
established businesses, in keeping entrepreneurship, and developing
with the government’s plan to increase and setting the strategic direction of a
the private sector’s contribution to the general national policy for the country’s
national economy. The UAE government tourism sector.
has been continuously developing its
wider legal and regulatory framework 100% FOREIGN OWNERSHIP
for businesses to ensure alignment with NOW PERMITTED ACROSS
international standards. 122 ECONOMIC ACTIVITIES
The UAE Ministry of Economy, for The UAE permitted 100% foreign
instance, began work on developing a ownership of companies for the first time in
regulatory framework for the financing of 2018, up from 49% of a company’s share
SMEs in 2018, preparing for the launch of capital. A company or its shareholders
an online SME financing platform. In 2019, must satisfy certain requirements before
the UAE government introduced incentives greater levels of foreign investment are
cancelling or reducing over 1,500 permitted such as minimum capital
government service fees by as much requirements, adherence to government
as 50% and began granting long-term Emiratization requirements, and type of
residency permits to tech startup legal business entity.
entrepreneurs and high-earning expats. In July 2019, the government specified
This is aimed at addressing the ongoing a total of 122 economic activities across
challenges faced by startups and SMEs in 13 sectors that will be eligible for up
securing the financing they need to grow to 100% foreign ownership. These
their businesses. sectors include administrative services;Entrepreneurship Ecosystem in Dubai 21
SETTING UP
A BUSINESS IN DUBAI
TO SET UP IN DUBAI, an entrepreneur needs first
to select the business zone and ownership type OWNERS CAN CHOOSE A SUITABLE LEGAL STRUCTURE
that best suits the proposed business. If operating FROM ONE OF THE FOLLOWING OPTIONS:
outside of one of Dubai’s many free zones, the
business owner would first need to register with the General Private Joint Stock Professional
Department of Economic Development (DED), which Partnership Company (PJSC) Company
will then issue a Dubai business license. Although An arrangement A company whose A company that allows
the support of a local sponsor can be helpful in many between two or more shares must be offered up to 100% foreign
ways, it is not a mandatory requirement. Neither is partners whereby for public subscription. ownership. However,
each of the partners The founders are certain sectors and
there a minimum investment requirement for most
is jointly liable to obliged to subscribe activities are restricted
types of business.
the extent of all for a minimum of 20% to either UAE nationals
To register the business, the owner must first their assets for the and a maximum of 45% or have an UAE
determine exactly which type of business it is and company’s liabilities. of the share capital. national shareholding
what legal form it will take. There are more than A PJSC is required to requirement such as
Simple Limited have between three the 51% required for a
2,100 business activities available in Dubai, divided
Partnership and 15 directors, UAE national.
into different classes whether industrial, commer- A company formed by who are elected for
cial, professional or tourism related. If the business one or more general Partnership
three-year terms.
activity does not appear on the government’s list, partners liable for the The chairman and a Limited with
the DED can be informed of the activity type via company liabilities majority of the board of Shares (PLS)
email. Some activities such as road transport, to the extent of all directors must be UAE A company formed
oil, legal, telecommunications, architecture and their assets, and their nationals. by general partners
engineering may require approvals from other respective shares. who are jointly liable
The limited partners Limited Liability for the company
government bodies.
are liable only to the Company (LLC) liabilities to the extent
A trade name must then be selected and approved extent of their personal A private company of all their shares, and
that accurately reflects the nature of the business. contributions. There whose shares are participating partners
Once this is done, an Initial Approval Certificate must be at least one not offered to the are liable to the extent
can be applied for, which will show that the DED general partner who public, which requires of their capital shares.
has no objection to the business being started is liable to the extent 51% of its shares
of their separate to be held by UAE Foreign Company
and that the next steps to obtaining a business A branch or
properties. nationals. However,
license may be taken. representative office of
profits and losses
After this, the entrepreneur should prepare may be distributed a foreign company in
agreements and select premises. Depending on disproportionately to the UAE. This company
the shareholding ratio. can be owned by a
the type of business, this could mean creating and
This is the most widely foreign entity, provided
signing a Memorandum of Association or Local
used commercial entity that a UAE national is
Service Agent / Corporate Agent agreement with appointed as the local
for companies with
a UAE national. partner.
a non-UAE national
Finally, so long as no additional approvals are element wishing to
required, all documents should be submitted, and conduct commercial
payments processed. The trade license must be paid activities in Dubai.
for within 30 days of receiving a payment voucher.
Source: Dubai Chamber22 DUBAI STARTUP OUTLOOK 2021
KENO
ESTABLISHED IN DUBAI, 2017
Keno launched in Dubai in 2017 and received funding from Dtec
Ventures in November 2019, following a $150,000 pre-seed
capital from 500 Startups.
It is a Dubai-based, eco-friendly car wash app that trains
FAVORABLE REGULATORY
car washers to a high standard and sends them out to clean
ENVIRONMENT CREATED
customers’ cars rather than customers having to wait in line
FOR VENTURE FUNDS
at carwashes. It plans to expand first across the UAE (outside
Some financial regulators have been
Dubai and Abu Dhabi) and then the rest of the GCC.
developing regulation to facilitate the
offering of alternative funding avenues
to SMEs. The Central Bank of the UAE
began drafting loan-based crowdfunding
platform regulations in September 2019.
Meanwhile, the Dubai Financial Services
Authority (DFSA) has been working
towards a regulatory framework that
would allow SMEs to list on a DIFC-based
Authorised Market Institution (AMI), such
as a stock exchange. This would provide
an alternative funding avenue for new and
small businesses.
DFSA has also taken steps to create
a favorable regulatory environment for
private equity and venture capital funds,
thereby making it easier for startups
in Dubai to access funding and further
enhancing Dubai’s proposition as a place
to do business. For example, DFSA
agriculture; art and entertainment; has introduced a risk-proportionate
construction; education; healthcare; regulatory framework for managers of
hospitality and food; information venture capital funds that exempts them
and communication; manufacturing; from base capital or expenditure-based
professional, scientific, and technical capital requirements.
activities; renewable energy; space; and DIFC, which the DFSA oversees,
transport and storage. permits fund managers located both within
In Dubai, 100% foreign ownership is and outside the free zones to establish
permitted for companies based within funds there through a range of fund
its various free zones. There is no limit vehicles including investment companies,
on repatriation of profits, and Dubai has partnerships, and trust structures. Fund
signed several international agreements managers based within the DIFC can also
including bilateral and multilateral treaties, establish and manage funds outside the
double tax treaties, and international zone. The center also guarantees 50 years
cooperation agreements. of tax-free corporate income and profits.
Dubai’s Department of Economic Investors can impose bad leaver
Development launched the Dubai Virtual provisions on the founders of the venture
Commercial City (VCC) in October or lock-up periods on the transfer of
2019, which grants virtual licenses founders’ shares, although non-compete
to entrepreneurs and freelancers provisions are generally enforced in the
without the requirement of residence UAE where reasonable.
in Dubai. Registering a business in the In 2017, the UAE government
emirate through the Virtual Company announced new regulations stipulating that
License includes access to a regulated a venture capital fund’s net asset value
e-commerce platform — DubaiStore. should be equal to or greater than its risk
com — and facilitation to access exposure. Funds must also conduct an
banking services. investment review at least once a year.Entrepreneurship Ecosystem in Dubai 23
SHORTPOINT
ESTABLISHED IN DTEC, 2013
ShortPoint is a cutting-edge software-as-a-service intranet
design platform, enabling users to easily build intranet sites
with no coding requirements. Founded in 2013, ShortPoint
was one of the first startups to join Dtec’s incubator, receiving
INCUBATOR seed stage investment from Dtec Ventures. It also received
funding from Dubai Angel Investors and global venture capital
ECOSYSTEM company 500 Startups.
In 2015, ShortPoint began working with SAP, one of Dtec’s
corporate partners, ultimately fully integrating SAP and
Microsoft Sharepoint with ShortPoint technology.
NEW REGULATIONS TOWARDS
BUILDING DUBAI BUSINESS The company has since been thriving and continues to grow at
INCUBATOR NETWORK an exponential rate. Since its inception, ShortPoint’s product
Fulfilling its goal to promote innovation, has worked with multinational corporations globally, including
Dubai SME introduced ‘Incubators and Microsoft, NASA, Novartis, General Electric, British Petroleum,
Business Accelerators’ regulations in Volkswagen & BNP PARIBAS. It has helped companies such as
2018 to support innovative entrepreneurs, McKinsey & Co. to build thousands of SharePoint Intranet Sites.
particularly in mentoring and monitoring
By 2019, ShortPoint established an international presence with
business growth. These regulations provide
offices in Dubai, Ukraine, and the USA.
a framework for incubators to provide
services including the requisite workspace
for entrepreneurs in line with the main activity
for which the incubator is licensed, as well
as consultancy and guidance on project
development and support for implementing
innovations and applying new technologies
in product development. The regulated
incubators would also provide specialized
training programs and workshops on packages, and events to support new
7
administration, marketing, and finance, in businesses in the food technology, energy,
addition to strategic alliances with global water, building materials, transportation,
partners and support for development and and waste treatment sectors.
international expansion. The largest hub for tech startups is
BUSINESS
The move paved the way for the Dtec, housing more than 900 tech startups INCUBATORS
establishment of a ‘Dubai Business and SMEs in a fully supportive ecosystem. approved by Dubai SME
Incubator Network’ (DBIN), which will Also, in5, located within Dubai Internet by the end of 2019.
act as a resource to help, encourage, City, is backed by a strong network of
and deliver best practices for business venture capitalists and angel investors, while
incubator programs in the UAE. This hosting three innovation centers specializing
followed the launch of the Dubai Future in media, design, and technology. Dubai
Accelerators program in 2016, which Internet City also hosts the annual STEP
facilitates partnerships between public Conference, a series of workshops and
and private sector organizations and small gatherings that has grown to become
startups using the city of Dubai as a the largest tech festival in the Middle East.
business testbed. Others include AstroLabs Dubai,
Re: Urban Studio, a co-working space which hosts over 100 startups across a
and a graduate of Dubai Chamber Emirati range of innovative technologies, and
Development Program has become the first TechStars Dubai, the local arm of global
licensed incubator by Dubai SME. By the seed accelerator TechStars, which offers
end of 2019, Dubai SME had approved prospective startups $20,000 in exchange
seven business incubators. The latest, for 6% equity, and $100,000 in the form of
approved in December 2019, is Bedayat, a convertible note to be used any way the
which was started in cooperation with startup chooses.
the Sustainable City in Dubai, where it is Elsewhere, the Mohammed bin Rashid
based. It will provide a variety of services, Space Centre, which is home to the UAE’s24 DUBAI STARTUP OUTLOOK 2021
THE NUMBER OF MIDDLE
EAST FINTECH STARTUPS
IS PROJECTED TO
INCREASE FROM 96 IN
National Space Programme, supports the
establishment of science and technology
2019 TO 465 BY 2022,
SMEs in the private sector. The center
was founded in Dubai in 2006 to act
WHILE THE VALUE OF
as an incubator for space research
and innovation.
FINTECH INVESTMENTS
TECHNOLOGY STARTUPS PLAYING
IS EXPECTED TO
A LEADING ROLE IN SMART
CITY TRANSFORMATION
INCREASE EIGHTFOLD
The Dubai government is leading efforts
to keep the emirate at the forefront of the
FROM $287 MILLION
Fourth Industrial Revolution with initiatives
such as Smart Dubai — its strategy to
TO $2.28 BILLION.
transform Dubai into a smart city. The Dubai
Future Foundation is another initiative,
which aims to position Dubai as a leading
city of the future and a hub for innovation
and technology. The foundation’s strategy
rests on five main pillars, including also forged partnership arrangements with
designing, understanding, and accelerating other global Fintech hubs such as New York,
the future. It aims to develop an integrated London, Paris, and Singapore, while its own
platform for designing the future that initiatives, such as FinTech Hive and its $100
attracts innovators and startups to create million Fintech startup fund, are also helping
solutions for various challenges facing to propel the sector forward.
government departments. FinTech Hive is the MENA region’s first
Dtec also provides seed funding and and largest Fintech hub and has, to date,
other forms of support through its venture accelerated over 80 startups. It offers
capital fund, Dtec Ventures. The fund FinTech, RegTech (regulatory technology),
invests in early-stage technology companies Insurtech (insurance technology) and Islamic
that are disrupting or enabling traditional Fintech startups access to dedicated
industries, particularly in consumer and accelerator programs, mentorship, a
enterprise software technology companies. collaborative workspace, and access to the
region’s largest financial community, and
DIFC DRIVES BOOM IN fintech licenses to get businesses started.
FINTECH STARTUPS While the Fintech sector is still in its infancy,
The UAE is home to the highest number it holds boundless opportunities and Dubai
of Fintech startups and over half of offers the necessary support for new and
Fintech investments in the region, owing innovative firms in this space.
to government support and initiatives from In 2017, DFSA introduced the
Dubai’s free zones. The sector is expected Innovation Testing Licence Programme,
to boom in coming years, with the number which allows Fintech startups to develop
of Middle East Fintech startups is projected their ideas without being subject to full
to increase from 96 in 2019 to 465 by 2022, regulations. The sandbox has attracted
while the value of Fintech investments is a wide range of startups from across the
expected to increase eightfold from $287 world. These have included firms testing the
million to $2.28 billion.16 digitization of Sukuk issuance using smart
DIFC continues to attract numerous contracts and the tokenization of equities
Fintech startups, offering unique and debt. The program enables firms to test
experimental licenses, competitive pricing, Fintech products in and from DIFC subject
and collaborative workspaces. DIFC has to various restrictions and modifications.You can also read
