Setting Up a FinTech Company in the UAE
What is a FinTech Company?
Financial Technology more commonly known as FinTech is the use of new and improved technology in the financial services sector including education, e-commerce and investment management in order to improve efficiency of financial processed by using technology and specific algorithms. According to the Global Fintech Market report the market is quickly growing and is expected to reach a value of $305.7 billion by 2023.
How Quickly is the Fintech Start Up Sector Growing?
The FinTech business landscape is evolving rapidly, one in every three people uses mobile applications to manage finances and over 142 FinTech startups have been added to the Magnitt platform since 2018 alone.
How popular are FinTech companies in the UAE?
The UAE is home to one third of FinTech startups in the Middle East and Northern Africa and Dubai has been recognised as one of the world’s top ten FinTech hubs with Abu Dhabi close behind. The number of FinTech companies in the MENA is expected to reach 1,845 by 2022.
How do I start a Fintech Company in the UAE?
Generally there are two options for FinTech set up in the UAE, these are as follows:
ADGM (Abu Dhabi Global Markets – Freezone) has a division called RegLab. RegLab is essentially a tailored regulatory regime for FinTech businesses to develop their solutions. It is designed to foster innovation within the UAE financial services market for both new FinTech companies in addition to existing financial institutions. ADGM RegLab allows its participants to test FinTech offerings in a controlled environment but with less burdens on the individual FinTech company.
To apply, all applicants must have a unique technological solution which is available for testing and which can uniquely contribute the UAE’s financial industry. Applicants looking to participate must be authorised and approved by the Financial Services Regulatory Authority (FSRA) in ADGM. The FSRA will be responsible for assessing the business model and will set appropriate regulations specific to each business model on a case by case basis.
Once Authorised and admitted into the program, the participants are able to operate in the ADGM Reglab for two years and during this timeframe they are able to test and develop their innovations.
DIFC (Dubai International Financial Centre) launched FinTech Hive in 2017 and has since its launch, has been a big success in Dubai and had already run three accelerator programs. The accelerator program consists of a three-month mentorship where finalist work with stakeholders and key individuals from different fields to assist and advice each finalist through the startup phase. FinTech Hive covers a wider scope of FinTech, InsurTech, RegTech and Islamic FinTech.
DIFC is one of the top 10 financial centres in the world and has made significant investments into building an ecosystem to offer an encouraging structure, subsidised licensing and funding opportunities.
What are the regulations for a Fintech company in the UAE?
Both DIFC and ADGM have their own laws and court system in addition to specific regulatory frameworks, however, the DFSA regulates financial activities in DIFC and FSRA regulates such activities in ADGM. Outside of these freezones, the SCA, IA and UAE Central Bank regulate financial activities.
Please note that any corporate services within ADGM will be delivered through a third party ADGM registered Corporate Service Provider (CSP). PRO Partner Group is not a CSP within ADGM.