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UAE – the right jurisdiction for your FinTech or Blockchain related business?

The UAE continues to strengthen its position as a hub for FinTech startups as the country is home to highest number of startups and investments into this sector, thanks to government support and initiatives taken by financial Free Zones in Dubai and Abu Dhabi.

Part 1: FinTech:

You might be a tech entrepreneur looking for the right place and jurisdiction to establish and develop your FinTech startup or blockchain related business.

The UAE is home to the highest number of FinTech startups at 67 followed by 44 in Turkey, 30 each in Jordan and Lebanon. While South Africa leads in Africa with 184 startups followed by 146 in Nigeria, 111 in Kenya, 36in Ghana, 34 in Egypt and 24 in Uganda.

A FinTech friendly regulatory environment, government support and higher level of funding are supporting the UAE in its journey. In 2017, the Dubai Financial Services Authority introduced an innovation-testing licence, allowing FinTech firms to develop concepts without being subject to full regulations. Also, Abu Dhabi’s Financial Services Regulatory Authority setup in 2016 a regulatory laboratory with a legislative framework, which was the first of its kind in the region to support innovators.

DIFC is committed to supporting the FinTech ecosystem by strengthening its international partnership network. Just last year, they have signed over 10 fintech-related MoUs that have strengthened partnerships with other global FinTech hubs, such as New York, London, Paris, Singapore, among others.In addition, DIFC’s very own initiatives such as FinTech Hive and the DIFC’s$100 million FinTech startups fund continue to play a crucial role in shaping the future of the financial landscape in the Middle East Africa and South Asia (MEASA) region.

Fintech’s first wave centered on payments while the second wave focuses on mobile and online banking by offering less costly, faster and better user-experiences. Fintech’s third wave has started to emerge with some banks adopting blockchain technology, startups growing in fields like insurance, regulation, risk solution and identity verification (KYC).

It is reported that 70 – 75% of transactions made in the UAE are based on cash. It is however important to note that out of 9.58 million people, 7.27 million are users of mobile internet. Nevertheless, only 31% of the population make use of mobile banking which creates a huge opportunity for tech startups.

The Middle East and North Africa (MENA) region’s FinTech market is predicted to experience immense growth by 2022, owing to the fact that start-ups are set to attract US$2.5 billion in deals according to MENA Research Partnerships. The projected annual growth is estimated to reach US$ 125 million until 2022, and the region is predicted to host a number of 252 start-ups.

By establishing your company in the UAE, you will have access to a wide range of opportunities in the FinTech sector. NHBC can provide you with all that you need to know regarding FinTech in the UAE and which Free Zone or Mainland license would be most suitable for your setup.

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