Launching a fintech company in Dubai is a promising venture as the city is becoming a global hub for technology and innovation. The city offers everything a business needs for growth and success, from business-friendly policies, location, modern infrastructure, and smart leaders. Fintech is the combination of two words, which are “financial” and “technology”. A fintech company offers financial services such as banking by using technology and innovation.
Unlike the traditional financial industry, a fintech company provides convenient, affordable and efficient financial services. They use technology to automate and improve financial services in Dubai. They are transforming the way we manage money while providing efficient and convenient services.
Overview of the Fintech Sector in Dubai
Dubai’s fintech industry is a leading sector with strong support from the government, global investment and a well-defined regulatory framework, especially in Blockchain and digital payments. UAE’s golden visa attracts global talents, and infrastructure like DIFC Fintech Hive (located in DIFC Free Zone) supports startups through sandbox facilities and acceleration programs. The industry is set to grow substantially because of the increase in demand for digital financial services, government regulations and the promotion of a cashless economy.
The fintech sector is growing rapidly because of the following fast-growing trends,
- Online payments
- Online capital raising
- Online investment
- Digital assets
- Neobanking
How to Start a Fintech Company in Dubai?
Starting a fintech company in Dubai requires specific steps and careful planning. It is wise to get help from a business consultant to ensure the process is smooth and there are no mistakes in the application form. Here are the necessary steps to launch a fintech company in Dubai.
Choose a Structure and Jurisdiction
The first and most important step of starting a fintech company in Dubai is selecting the right structure and jurisdiction. Choose a location based on your activities, future goals, business requirements and target market.
There are two types of structures that Dubai allows you to choose from,
- Mainland company
- Free Zone company
Let’s discuss both in detail,
Mainland Company
A mainland company is registered and conducts business in the Dubai mainland. A mainland business setup offers many benefits, such as access to local customers and building trust in the local market.
A mainland company must comply with UAE regulations and pay a 9% corporate tax. However, a mainland fintech company allows you to have a physical presence in Dubai and target local markets.
Free Zone Company
A free zone company is registered and operates in one of the free zones of Dubai. These are special economic zones with additional advantages for companies registered there. The benefits include 100% foreign ownership and zero corporate tax on certain business activities.
One of the best free zones for a fintech company is the Dubai International Financial Centre, DIFC. It has a special fintech hub – FinTech Hive offering funding, mentorship and networking opportunities for new entrepreneurs and startups. Investors, entrepreneurs and financial institutions are innovating new technologies in the fintech sector with support and collaboration. Al Riyady can help you get a DIFC fintech license and begin your fintech dream today.
Select the Company Structure
Once a jurisdiction is finalized, you must select a structure for your company. There are various options for you to choose from, such as limited liability companies (LLC) and limited liability partnerships. Hire a legal consultant who helps you choose a structure that suits your business goals.
Register your Fintech Company
The next step is registering your fintech company with the government authorities. The registration process and timing vary according to your business structure.
Establishing an Office Space
Set up an office space where you can operate and conduct your business activities. Moreover, you can also register a virtual office if you want to hire online workers and save a lot of capital.
Obtain a Fintech License
Obtaining a license for your fintech company is essential for conducting business legally in Dubai. As fintech businesses are subject to specific regulations, they must get additional approvals from authorities. A startup may need to apply for an Innovation Testing License (ITL) in Dubai for testing its fintech product in a controlled environment before it can apply for a full license.
At last, you can apply for a fintech company license by submitting the required documents and approvals.
Open a Business Bank Account
Open a local bank account for your business transactions by providing the necessary documents, such as business registration documents and trade licenses.
Get your Visa
Apply for an employment or investor visa if you are moving to Dubai. After that, you can apply for an employee visa for your team and family members.
Future Compliance
After your company is set up, you must adhere to ongoing compliance with the laws and regulations of Dubai. A business consultant can be of great help with ongoing compliance while you focus on your business operations and growth.
Marketing & Product Development
As a fintech business, it is all about innovation and technology; you must focus on continuous product development and customer satisfaction. Therefore, it is important to hire a professional team and technology to improve the functionality of your fintech services.
Another important step is marketing your products to the right customers and having access to multiple distribution centers. You can establish an online presence through social media, online advertising, organizing events and PR.
Cost of Starting a Fintech Company in Dubai
The average cost of establishing a fintech business in Dubai falls between AED 16,000-37,000 (USD 4,400-1,00,73). However, the cost depends on many factors such as your business activity, your selected jurisdiction and additional approvals.
For instance, a mainland company setup can cost more due to the need for a physical office. While in a free zone, you can use a flexi desk or get a virtual office license, which will significantly reduce setup costs.
It is important to note that Dubai offers two types of fintech licenses, one for market exploration and the other to expand the market.
Disclaimer: The costs mentioned above are just estimated costs that are subject to change. Final costs change depending on your types of activity, number of shareholders, jurisdiction, size of your business office space and more.
Advantages of Starting a Fintech Company in Dubai
Dubai offers many benefits to fintech entrepreneurs and investors. Some of these benefits are as follows,
- The UAE has one of the lowest corporate tax rates, a 9% rate if annual income is AED 375,000 or more. Moreover, 0% individual income tax rates make it an ideal location for startups.
- With its straightforward business setup process and business-friendly policies, the UAE is one of the top locations for a fintech business.
- The fintech sector in Dubai is growing rapidly, providing good opportunities to newcomers.
- Unlike other GCC countries, Dubai allows 100% foreign ownership without the need for a local partner.
- Dubai has strict Intellectual Property (IP) laws to protect your IP and secure its intellectual property.
- The intention behind the UAE’s 2014 National Innovation Strategy program was to make the country a global hub for innovation and technology. DFSA has also launched many initiatives, such as ITP, to assist the fintech industry in Dubai.
- Dubai’s technology scene is attracting big names and talents from around the globe. The city assists you all the way from launching your fintech company to earning good profits.
- Dubai is a hub of many international companies, free zone hubs which include DIFC’s FinTech Hub, providing networking and investment opportunities to grow your business.
Final Words
All in all, starting a fintech company in Dubai is a lucrative idea because of its profitable fintech industry. To establish a fintech business, start by selecting the right jurisdiction, a trade name and obtaining a fintech license. The process may seem simple, but a single wrong step can cost you a lot. Therefore, we recommend partnering with a trustworthy business consultant with experience in the fintech industry.
At Al Riyady, we have top business consultants with years of experience in Dubai’s competitive business sector. From setting up your business to getting your license and getting approvals, we can assist you through the whole process. Contact us today for Business Setup in the Mainland, Free Zone, Digital Marketing, UAE Golden Visa and more.
