The UAE market for property investment crowdfunding platforms is growing steadily due to the region's thriving real estate market. Focusing on Dubai, the real estate sector achieved a growth rate of 3.7% during the first quarter of 2024, contributing 7.3% to Dubai's GDP with a total value of AED 8.4 billion.

With such a strong real estate sector, there is a growing market for setting up Property Investment Crowdfunding Platforms. To do this in the Dubai International Financial Centre (DIFC) involves several steps, as it requires compliance with the DIFC's legal framework and regulations governed by the Dubai Financial Services Authority (DFSA).

Set Up a Property Investment Crowdfunding Business in DIFC

Crowdfunding is a method of raising funds for a business by collecting contributions from many people, typically via online platforms. It connects those seeking funding with a wide audience of potential investors.

Setting up a property investment crowdfunding business in DIFC you must first understand that DIFC is a free zone in Dubai with its own legal and regulatory framework. Crowdfunding platforms in DIFC must comply with DFSA's rules on Crowdfunding, particularly the rules for property based crowdfunding under the Crowdfunding Platform (CP) regulations.

Key regulatory requirements include:

• Having a DFSA license.
• Meeting capital adequacy and risk management standards.
• Ensuring proper disclosures and transparency for investors.

What is the process of setting up a crowdfunding business in DIFC?

1. Define the platform’s business model. Will it be equity-based, debt-based, or hybrid property crowdfunding?
2. Choose the appropriate company structure, typically a Limited Liability Company (LLC) or other DIFC-registered entity.
3. Reserve a trade name and register your entity via the DIFC portal.
4. Submit required documents which will include business plan, articles of incorporation, passport and IDs of founders/directors, lease agreement for office space in DIFC.
5. Apply for DFSA Authorisation

The Dubai Financial Services Authority (DFSA) is the independent financial regulatory agency for the Dubai International Financial Centre (DIFC), supervising and regulating financial activities.

Getting DFSA authorisation is therefore required for crowdfunding activities in DIFC. DFSA ensures compliance with the financial regulations and expects regular reporting of financial and operational data to DFSA.

The next stage in incorporating your crowdfunding business in DIFC is to open a business bank account and build an online platform for listing properties and securing investments. It is important to ensure the company complies with data privacy standards and cybersecurity protocols as per DFSA guidelines.

Sovereign PPG is a licensed corporate service provider in DIFC and can assist companies with obtaining approvals and license for regulated business activities such as crowdfunding. We assist client with the full application and license process, bank accounting opening assistance and all investor and employee visas requirements in the DIFC and across Dubai, Abu Dhabi, Oman, Bahrain, Qatar and Saudi Arabia. Email Dubai@SovereignGroup.com or fill in the in line form and we would be delighted to assist.