Dubai has rapidly emerged as a global financial hub, attracting innovative entrepreneurs and ambitious investors to its thriving ecosystem. The fintech industry continues to disrupt traditional banking and financial services – and Dubai is at the forefront of this wave.
This article provides a step-by-step guide on how to start a fintech company in Dubai, looking at the following areas:
- Overview of the fintech industry in Dubai
- Benefits of starting a fintech company in Dubai
- Steps to start a fintech company in Dubai
- Funding sources available for fintech companies in the region
- Why work with Trade License Zone?
Overview of the fintech industry in Dubai
Dubai has become a magnet for fintech companies looking to establish a foothold in the Middle East and North Africa (MENA) region and beyond. With its pro-business government policies, favourable tax regime and robust financial services sector, Dubai offers an ideal environment for fintech startups to thrive.
Fintech ecosystem in Dubai
The fintech ecosystem in Dubai is a dynamic mix of startups, established financial institutions and regulatory bodies working together to drive innovation in the sector. Key players include the Dubai International Financial Centre (DIFC), the region’s largest fintech hub, and the Dubai Financial Services Authority (DFSA), the regulatory body for the industry.
The DFSA has introduced various initiatives, such as the Innovation Testing License (ITL), which allows fintech startups to test their products and services in a controlled environment before obtaining a full license.
Another vital component of Dubai’s fintech industry is the DIFC FinTech Hive. This innovation hub brings together entrepreneurs, investors, and financial institutions to collaborate and develop cutting-edge financial technologies. The FinTech Hive has successfully incubated numerous fintech startups and provided them with valuable mentorship, funding and networking opportunities.
Dubai’s fintech regulatory landscape
The Central Bank of the UAE (CBUAE) plays a significant role in developing regulatory frameworks that foster innovation while ensuring the stability and integrity of the financial system.
Access to capital
Funding availability is one of the primary factors contributing to the success of fintech companies in Dubai. The government has launched multiple initiatives, such as the Dubai Future Foundation and the Mohammed bin Rashid Innovation Fund, to provide financial support to innovative startups. Venture capital firms and angel investors increasingly recognise the potential of the fintech sector and are actively investing in promising startups.
Skilled and experienced workforce
Dubai’s diverse and highly skilled workforce is another reason why fintech startups flourish in Dubai. With a large pool of professionals worldwide, fintech companies can easily access the talent they need to develop and scale their businesses. Educational institutions in Dubai also offer specialised programmes in fintech to create a pipeline of skilled professionals for the sector.
Government support
The Dubai government plays a significant role in promoting the fintech industry through regulatory support and direct investments. The UAE’s National Innovation Strategy, launched in 2014, aims to position the country as a global innovation leader, with fintech being one of the key sectors identified for growth.
Benefits of starting a fintech company in Dubai
Entrepreneurs launching a fintech company in Dubai enjoy considerable benefits, including the following:
1. Tax benefits:
The UAE provides several tax benefits (such as no corporate or personal income tax) and a VAT regime with many exemptions, which can result in significant savings for startups.
2. Easy business set-up:
The UAE has streamlined the business setup process, making it easier and faster to get started.
3. High quality of life:
The UAE offers a high quality of life, with world-class healthcare, education and leisure facilities. This attracts top talent and helps maintain a high retention rate.
4. Leading intellectual property laws:
The UAE has leading intellectual property laws that protect the rights of innovators, which is crucial for technology-based startups like fintech companies.
5. Economic stability:
The UAE has a stable economy with a strong banking sector, making it a safe place to invest and operate a business.
6. Fintech demand:
With a high per capita income, a significant unbanked population, and a strong demand for digital banking and Sharia-compliant financial services, the UAE presents unique opportunities for fintech companies.
Steps to start a fintech company in Dubai
These are the nine steps required to start a fintech company in Dubai:
Step 1: Partner with Trade License Zone
When starting a fintech company in Dubai, partnering with a company formation expert such as Trade License Zone will ensure your process is smooth and streamlined. We’ll guide you through the required government steps and inform you when you can start trading.
Step 2: Select a business structure
Determine the appropriate legal business structure for your fintech company. Options include a Limited Liability Company (LLC), a Free Zone Company, or a branch of a foreign company. Your choice will depend on factors such as ownership, taxation, and the business activities you plan to undertake.
Step 3: Select a business jurisdiction
Dubai has created two distinct economic zones: Free Zones and Mainland. There are more than 40 Free Zones, each specialising in specific industries and offering tax benefits, support services and other advantages.
A Mainland business jurisdiction allows companies to trade directly within the UAE without requiring a branch office, unlike Free Zone companies, which involve more steps to be eligible to trade within the UAE.
While choosing the most appropriate setup for your company may be challenging, the experts at Trade License Zone can assist and guide you through the process.
Step 4: Select your business activities
There are more than 2,000 business activities, so selecting the ones you will carry out when trading is essential. A company may only conduct business activities as selected for its trade license. Failure to do so may result in severe penalties from UAE authorities.
Consult a trade license expert, such as Trade License Zone, to choose the appropriate business activities for your enterprise.
Step 5: Register a company name
Trade License Zone offers support in selecting a suitable business name. As per the guidelines set by the UAE’s Registry Office, it is essential that your chosen business name is free of any offensive or disrespectful language and does not make any reference to Islam or Allah. If you plan to incorporate your name in the company’s name, it should be spelt out in its entirety rather than using initials or surnames. You need to provide three preferred names, and the Registry Office will verify their availability and confirm the final choice.
Step 6: Apply for initial approval
Obtain initial approval for your business activities from the Department of Economic Development (DED) or the Free Zone authority (depending on your chosen business structure and jurisdiction). This step involves submitting the necessary documents, such as your passport, visa and business plan.
Step 7: Obtain regulatory approvals
Fintech companies are subject to specific regulations. You must obtain approvals from the relevant regulatory authorities, such as the Dubai Financial Services Authority (DFSA) or the Central Bank of the UAE (CBUAE). This may involve applying for the Innovation Testing License (ITL) to test your fintech solution in a controlled environment before obtaining a full license.
Step 8: Apply for a trade license
With the necessary approvals and legal documents in place, submit your application for a trade license to the DED or the respective Free Zone authority.
Step 9: Open a corporate bank account
Once you have obtained your trade license, you can open a corporate bank account for your startup. After that, you can begin trading as a fintech company in Dubai.
Funding sources available for fintech companies in the region
Funding sources available for a fintech company in Dubai are diverse and provide entrepreneurs with various options to finance their ventures. These sources include:
- Government-backed funds: The UAE government supports innovation through various initiatives which provide financial assistance to innovative startups, including fintech companies.
- Venture Capital firms: A growing number of venture capital firms in Dubai actively invest in fintech startups.
- Accelerators and incubators: Fintech accelerators and incubators provide startups with mentorship, office space, and access to resources in exchange for a small percentage of equity. These programmes often culminate in demo days, where startups pitch their ideas to potential investors.
Why work with Trade License Zone
When you partner with Trade License Zone, the UAE’s license applications and business setup are streamlined. We help with trade license applications, company registration, and more to save you time and money and avoid unnecessary delays or rejections when starting a fintech company in Dubai.
Getting started is as simple as sending us basic information about your business idea – our expert team will then take care of the rest. We’ll manage business setup, communicate with all relevant government departments and authorities, handle visa amendments and applications, open corporate bank accounts, and report to you when you’re ready to start trading. It really is that straightforward.