🇦🇪 UAE Crowdfunding Licenses – A New Era for FinTech and SME Finance?

📜 Regulatory Framework and Official Standards

Crowdfunding in the UAE is recognised as a licensed fundraising activity, allowing equity, debt, donation and reward-based models. The 2022 Resolution (No. 36) established rules for crowdfunding platform operators, including licensing requirements, disclosure obligations, and governance standards. The 2023 amendment (No. 139) updated key restrictions, particularly regarding which entities are eligible to seek funding.

• Central Bank oversees loan-based crowdfunding (except in financial free zones).

• SCA regulates mainland platform operators under Cabinet Resolution 36/2022, including limits for investors: AED 30,000 per project and AED 100,000 across projects per 12 months for retail investors.

• DFSA (in DIFC) regulates equity, debt and property crowdfunding, imposing strict standards:

• Retail investors capped at USD 50,000 annually, with a USD 5,000 per loan limit.

• Platforms are restricted from public marketing of active campaigns beyond registered members.

• Only residential property crowdfunding is currently permitted, with mandatory independent valuations and investor fund segregation.

The DFSA launched a 2024 consultation (CP156) proposing higher caps (up to USD 100,000) and broader fundraising limits, but these have not yet been adopted.

⚖️ Analysis and Comparative Insight

The UAE’s framework mirrors international best practice but remains more conservative in some respects. Unlike jurisdictions where secondary markets allow investors to trade crowdfunding securities, the UAE maintains a prohibition on such exchanges, treating them as regulated market activities.

Retail caps are deliberately cautious. While the DFSA is considering doubling limits, current thresholds remain unchanged. Marketing restrictions are also tighter than in Europe or the UK, where targeted advertising of campaigns is allowed under prospectus exemptions.

Jurisdictional complexity adds another layer:

• Mainland – SCA license required.

• DIFC – DFSA crowdfunding license (Category 4) mandatory.

• ADGM (Abu Dhabi) – FSRA operates a separate crowdfunding framework.

This multi-regulator environment offers choice but demands careful legal structuring for platform operators and fundraisers.

📊 Evidence, Cases and Practical Examples

• Startups in the Mainland: A technology SME raising funds must use an SCA-licensed platform. Exceeding caps or misrepresenting information could lead to suspension or license revocation.

• Property Developers in DIFC: A residential unit placed in an SPV may be fractionally funded through a DFSA-licensed operator. If the fundraising target is not met, funds must be refunded to investors.

• Loan-based Platforms: A peer-to-peer lending operator in the UAE mainland must obtain a Central Bank license, comply with KYC/AML rules, and enforce borrower-level lending caps.

• Regulatory Scrutiny: In 2024, the DFSA conducted a thematic review and found weaknesses in disclosure and client agreements, signalling that regulators will continue rigorous enforcement.

These examples demonstrate that legal compliance is not optional – it is central to protecting investors and ensuring platform sustainability.

🏁 Conclusion

The UAE’s updated crowdfunding regime represents a structured, legally enforced step forward for fintech and SME finance. Key features include licensing under Cabinet Resolutions 36/2022 and 139/2023, retail investor caps, restrictions on marketing, and governance obligations. While the DFSA is considering reforms to raise thresholds, current caps remain firmly in place. The system offers opportunities but requires precise compliance across jurisdictions.

If your company is seeking to operate or invest through a UAE crowdfunding platform, NUR Legal can advise on licensing, structuring, and regulatory compliance. Contact us today to explore your options.

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