Starting a fintech company in Dubai is one of the best investments you can make. The city has become a global hub for technology and innovation. Setting up your fintech venture here increases your chances of success by a large margin.
The term ‘Fintech‘ is a combination of two words – financial technology. Fintech businesses use technology and innovation to offer financial services, such as banking. The Fintech industry uses the latest technology to compete with traditional banking and financial services.
In this guide, we will take a look at the steps involved in starting a fintech business in Dubai, including the benefits and costs associated with it.
Overview of the Fintech Industry in Dubai
The total assets under management in the UAE fintech market are valued at AED 11.60 billion in 2024. They are expected to grow at a compound annual growth rate of 12.56% to AED 20.97 billion by 2029.
The fintech industry is rapidly growing in Dubai, with some of the fastest-growing trends including:
- Digital payments
- Digital investment
- Digital capital raising
- Digital assets
- Neobanking
Since Covid, the market has grown significantly, with a 928.30% growth in the overall fintech revenue. In 2020, the total revenue of the fintech industry in the UAE was AED 175.79 million, which will grow to AED 1.807 billion in 2024.
It is also worth noting that many global businesses have invested a large amount of money in the Dubai fintech sector. The market is currently competitive, but with the right approach, there is still scope to capture a major chunk of it.
The UAE government also favours the fintech industry in Dubai. In recent years, multiple initiatives have been launched to assist new fintech startups in Dubai and the UAE.
Not only that, but Dubai also has a dedicated fintech hub in the DIFC Free Zone called DIFC FinTech Hive, which we will discuss in more detail later.
Step by Step Process to Form a Financial Technology Company in Dubai
To launch your fintech company in Dubai, you must follow some specific steps. The steps may seem straightforward, yet a single mistake can result in the rejection of your application.
Therefore, it is recommended that you engage a business consultant to assist you with the process. Here is the proper procedure to help you obtain a fintech licence in Dubai and start your own fintech venture.
Step 1. Choose the Jurisdiction and Structure
Choosing the right structure and jurisdiction is one of the most important things to consider when you start a fintech company in Dubai.
You must choose a location based on your current and future goals, the nature of fintech activities, your target market, and business requirements.
Dubai allows you to establish two types of structures:
- Mainland company
- Free Zone company
Let’s understand both in detail:
Mainland Company
A mainland company is registered and operates in Dubai Mainland. Registering a company on the Mainland comes with perks such as access to local markets and higher trust among the locals.
A mainland company must comply with UAE laws and regulations and is subject to a corporate tax of 9%. However, establishing a fintech startup on the Mainland is the best option if you are targeting domestic markets or looking to have a physical presence in Dubai.
Free Zone Company
A company that is registered and operates in a Free Zone is usually called a Free Zone company. Free Zones in UAE are special economic zones offering additional advantages to businesses registered there, such as no corporate tax on qualified activities and 100% foreign ownership.
Dubai International Finance Centre (DIFC) is the best free zone for establishing a fintech startup. It has a dedicated fintech hub called FinTech Hive. The FinTech Hive offers mentorship, funding, and networking opportunities to new startups. It allows investors, entrepreneurs, and financial institutions to develop new technologies in the fintech sector with collaboration and support.
Step 2. Finalise the Company Structure
Once you have finalised the jurisdiction, you must decide on a business structure. Dubai allows various options, such as limited liability companies and limited liability partnerships. Choose the structure that best suits your requirements. You can also consult with a business setup firm like Avyanco. We can offer you the right guidance based on your requirements and business goals.
Step 3. Register Your Fintech Company
After choosing the jurisdiction and deciding the business structure, you must register your company with the relevant authorities. The company registration process in Dubai can vary depending on the business structure you choose.
Step 4. Establishing an Office
Now, you need to set up an office in Dubai for all the business communication and work. You can also register a virtual office if you plan to hire remote workers. It will also reduce your initial investment by a high margin.
Step 5. Obtain a Fintech Licence in Dubai
Once you select the location and business structure, you must obtain your fintech licence to operate. First, you must register your business name. Next, you must get approval for your business activity from the specific authority of your chosen jurisdiction.
As fintech companies are subject to specific regulations, you must get additional approvals from relevant authorities. As a startup, you might have to apply for the Innovation Testing License (ITL) so you can test your fintech product in a controlled environment before applying for a full licence.
Finally, you have to apply for a fintech company trade licence by submitting the required documents and all the necessary approvals.
Step 6. Open a Bank Account
Once your fintech company in Dubai is registered, you must open a business bank account in Dubai‘s local bank for business transactions. You have to submit necessary documents, such as licences and company registration documentation.
Step 7. Apply for Visas
Next, you must apply for an investor or employment visa for yourself if you are going to relocate. After that, you can submit visa applications for your family members and employees if you are looking to bring your own team.
Step 8. Ongoing Compliance
You must set up operations and procedures to ensure the company remains compliant with Dubai laws and regulations. You can also hire a business consultancy firm to assist with ongoing compliance requirements while you can focus on business growth.
Step 9. Product Development and Marketing
As fintech deals with innovation and technology, you have to continue working on your product to enhance features and customer satisfaction. Hence, you must invest in the right tech stack and team to improve the functionality and applications of your fintech services.
To reach your target market efficiently and quickly, you must also have a solid marketing strategy and access to multiple distribution channels. You can leverage social media, PR, event marketing, and online advertising, to name a few.
Cost to Obtain a Fintech License and Start your Fintech Company in Dubai, UAE
The average cost of starting a fintech company in Dubai ranges between AED 16,000 (US $4,400) and AED 37,000 (US $1,00,73). However, the cost of starting a fintech company in Dubai depends on multiple factors. The licence cost may vary based on the business activity you are going to engage in. Your preferred jurisdiction also affects the initial costs.
For instance, a Mainland company will cost more as you require a physical office. On the other hand, you can obtain a virtual office licence or use a flexi desk in a Free Zone, which will significantly save costs.
Another thing to note is that two types of Fintech Licenses are available: one to explore market opportunities and the other to expand the market. The fintech company license cost ranges between AED 9,000 and AED 29,000. The first is to explore market opportunities, and the second is to expand the market in the UAE.
Note*: The Fintech Startup cost mentioned above is just an estimated cost; the final cost may vary and is always subject to change. Final cost changes depend on factors such as opted activity and jurisdiction; no. Of shareholders and visa required, office type and size of the office needed for business, and more.
Benefits of Fintech Company in Dubai, UAE
Dubai offers numerous benefits to fintech investors and entrepreneurs. Some of the major benefits of establishing a fintech company in Dubai are:
Tax Exemptions
UAE has one of the lowest corporate tax rates in the world, at 9% if taxable income equals or exceeds AED 375,000. In addition, UAE residents enjoy 0% individual income tax rates, making it an ideal location for fintech startups.
Business-Friendly Environment
The UAE has business-friendly laws, making it a global business hub. The incorporation process is quite simple and straightforward, with no red tape.
100% Foreign Ownership
Foreigners can claim 100% ownership of their fintech startups in Dubai, unlike many GCC countries where you need to have a regional partner or director in the company.
Growing Market
The fintech market is currently booming and growing at an exorbitant rate. The market is competitive, but there are not many big players, which presents decent opportunities to newcomers.
Strict IP Laws
As fintech deals in technology, having robust intellectual property laws is mandatory to keep your IP safe. The UAE has strict IP laws to keep investors secure for their intellectual property in Dubai, UAE.
Government Support
UAE launched the National Innovation Strategy initiative in 2014 to position the country as a global innovation leader. Since then, the government has shown immense support for the fintech sector as it has demonstrated promise and growth. The DFSA has also launched initiatives to assist fintech startups, such as ITL.
Best IT Workforce
Dubai has been attracting top tech talents from around the world with its lucrative fintech sector and high quality of life. You can find all the help you need to start and scale a fintech startup right here.
Networking Opportunities
Dubai is home to many international companies. Free Zone hubs, such as the FinTech Hub in DIFC, provide networking opportunities with innovators and investors across the globe, increasing your funding chances.
How Avyanco Business Setup can help establish your Fintech Company in Dubai, UAE
Dubai has a lucrative fintech market with high competition yet multiple opportunities. To establish a fintech business in Dubai, you must first start by choosing the right jurisdiction and obtaining a fintech licence to operate.
The company setup steps may seem easy to execute, yet a single mistake can cause rejection. Therefore, it is recommended that you partner with a business consultancy firm that has experience and expertise working with fintech startups.
At Avyanco, we have the top business setup consultants and specialists to assist you through each and every stage of the company incorporation process. Our consultants provide you with the right guidance and also help you decide the right jurisdiction for your business activity and goals.
Connect with us today for a free consultation and to explore ways to help you in your new endeavour.
FAQs
How to open a FinTech company?
To open a fintech company in Dubai, you must first choose a business structure and location. Next, you must obtain a fintech licence to operate. Eventually, you must open a bank account and obtain the required visas. To successfully operate your business and scale it, you have to invest in top tech talent and tech stack.
How can I get a fintech licence in Dubai?
To obtain a fintech licence in Dubai, you must register your company name and get initial approvals from the relevant Free Zone authority. Then, you need to obtain regulatory approvals from the regulatory bodies for the fintech industry. Finally, you need to obtain a business licence from authority to incorporate your fintech company.
Can you start a fintech company?
Yes, anyone can start a fintech company. You need to obtain the required approvals from the DET previously known as DED and fintech regulatory bodies. Next, you must obtain a Fintech License in Dubai, open a bank account, and obtain visas to start your business operations.
How do I get started in the fintech industry?
To start in the fintech industry, you must research and understand the ongoing trends in the market, such as digital payments, digital investment, and neobanking. Identify a problem that users are facing regarding any of these trends and devise a solution. This solution can be your fintech product, or you can also provide fintech-related services to other fintech companies.
You must also be qualified to work in the fintech sector. This sector is all about technology and innovation, so you must have technical aptitude as well as an innovative mindset to thrive in the Dubai fintech market.
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