UAE Investment & Lending Platforms
Obtaining a UAE crowdfunding license allows you to tap into the Middle East market under a recognized regime, benefiting from the UAE’s strong fintech ambitions and access to a broad investor pool.
ADVANTAGES
Government Backing for Fintech & SMEs
The UAE government has explicit initiatives to boost crowdfunding as part of diversifying SME financing. Entities like Mohammed Bin Rashid Fund or DubaiNEXT platform were government-led to promote crowdfunding culture.
Strategic Geographic Reach
UAE is a hub connecting Middle East, South Asia, and Africa. A UAE-based platform can attract not only UAE projects but potentially from neighboring Gulf countries or wider MENA.
Clear Infrastructure and Trust
Operating a platform in UAE gives comfort to users – the country is known for strict laws and enforcement against fraud. Being licensed in UAE signals that you meet high standards (especially if DFSA or ADGM regulated, given their international reputation).
Capital and Liquidity
There is abundant capital in UAE – investors often look for alternative investment opportunities beyond real estate and stocks. Crowdfunding offers them new asset classes (startup equity, P2P loans) and diversification.
WHY UAE?
By choosing UAE, you’re effectively anchoring your platform in a secure, dynamic financial center with strong growth potential and state-of-the-art regulatory oversight – an excellent recipe for a crowdfunding business focusing on emerging markets.
REQUIREMENTS
Capital Requirements
Capital requirements differ by regulator. In the DIFC, the DFSA requires a base capital of approximately USD 140,000 (around AED 500,000) for crowdfunding operators. They also impose an expenditure-based buffer if operational expenses exceed the base calculation, but this usually applies only in specific cases, especially for Category 4 firms.
For platforms operating onshore under the Securities and Commodities Authority (SCA), the exact capital requirement isn’t clearly stated in public documents. However, estimates suggest it could be around AED 1 million as initial paid-up capital, or potentially up to AED 5 million. This may also depend on factors such as whether a local partner is involved, in which case they would contribute a portion of the capital.
In the ADGM, the capital requirement is generally similar to the DFSA model, with around USD 250,000 expected to be shown either as a bank deposit or through a shareholder commitment. Some regulators require that platforms maintain this capital in liquid form and adjust it to reflect ongoing expenses.
Local Presence and Operational Substance
Each regulator places importance on local presence. Onshore, the SCA requires a local office in the UAE and may require a certain percentage of UAE national employees, although this isn't always mandatory in financial services. In the DIFC and ADGM, a physical office within the respective free zones is mandatory. Key personnel, such as the Senior Executive Officer (SEO) or Compliance Officer (CO), must usually reside in the UAE.
Even if core systems such as servers are cloud-based, they must be accessible to the UAE regulator. Cloud data should ideally be stored or mirrored within the country, in accordance with UAE Central Bank cloud computing guidelines. Regulators typically perform an inspection before or shortly after granting a license to ensure the platform has adequate infrastructure and systems in place.
Fit and Proper Management
Regulators require that all directors, partners, and senior officers meet “fit and proper” criteria. This includes having clean personal records, such as police clearance from countries of residence over the past five years. Candidates must also show relevant experience—typically five to ten years in a similar role. The DFSA requires senior positions like the SEO and CO to demonstrate this experience through CVs and, if possible, reference letters. Lacking this, they may ask the platform to hire someone more qualified.
In some cases, certifications are required. For example, the CO might need a recognized AML qualification or must pass exams required by the DFSA or ADGM. The DFSA usually expects CISI certifications, while ADGM may mandate its Rulebook exam. The SCA might also expect some board members or management to be UAE nationals, potentially requiring the compliance officer to be Emirati. Additionally, major shareholders must demonstrate financial soundness and a good reputation, and foreign owners may undergo security clearance.
Operational and Risk Controls
Crowdfunding platforms must have robust IT systems, especially given their digital nature. When using cloud services, operators must comply with security guidelines issued by the DFSA, ADGM, or other relevant bodies. Platforms must ensure that data is secure, and regulators have access to it when needed.
A formal business continuity plan is essential, as is a comprehensive KYC and AML compliance process. Investment crowdfunding platforms dealing in securities must adhere to prospectus exemptions and ensure shares are properly handled. For loan-based crowdfunding, especially onshore, there may be Central Bank oversight, including requirements related to borrower credit assessments through bodies like Al Etihad Credit Bureau.
Shari’ah Compliance (If Applicable)
If the platform offers Islamic crowdfunding products, such as profit-sharing or Murabaha structures, a Shari’ah board or advisor will likely be required. The model must comply with the UAE Central Bank’s Islamic finance rules. These requirements apply only if the platform markets itself as Shari’ah-compliant; conventional models do not need to meet these standards.
Investor Protection
Retail investor participation is often subject to restrictions. The DFSA, for instance, has frameworks where only retail clients who opt in as professional investors can participate. ADGM has permitted limited retail participation under certain conditions. Regulators may also require that no more than 10% of an investor’s net assets be invested in a single campaign.
Risk warnings must be provided in both English and Arabic for onshore offerings. Client funds must be held separately, typically in a client money account at a UAE bank. For loan-based platforms, there may be additional structures—such as creating a Special Purpose Vehicle (SPV) or trust—to isolate loans from the platform's own balance sheet, although this depends on the regulator. The DFSA, for example, has not required SPVs but some jurisdictions may require trust arrangements.
Insurance
Professional Indemnity (PI) Insurance is mandatory under DFSA rules and typically ranges between USD 1–2 million in coverage. While not always explicitly required onshore, obtaining such insurance is strongly recommended. In some cases, SCA may require a bank guarantee to ensure the platform abides by regulatory obligations.
Fees and Financial Guarantee
All platforms must expect to pay application and licensing fees. The DFSA, for instance, charges around USD 5,000 for application, with ongoing annual fees between USD 5,000 and USD 10,000 depending on activity. SCA may require an initial fee or a financial guarantee deposit, especially for activities that require strong regulatory compliance.
In all cases, an external auditor must be appointed and maintained to satisfy ongoing regulatory obligations.
Compliance with Local Laws
If the crowdfunding activity relates to real estate development, the platform must coordinate with real estate regulators such as RERA. This is particularly important for profit-sharing arrangements involving real estate.
Marketing content generally requires regulator approval before publication. Record-keeping must ensure that investor and transaction data is accessible within the UAE, ideally stored locally for inspection purposes.
Regulations may also impose additional conditions—for example, setting a maximum loan tenor or excluding certain sectors from fundraising. These requirements are typically defined in Cabinet resolutions or sector-specific laws and must be reviewed carefully to ensure full compliance.
PROCEDURE
The process can vary slightly depending on the jurisdiction in UAE (Mainland SCA vs DIFC vs ADGM)
1. Jurisdiction and License Type Selection
We begin by advising on the best jurisdiction for your business goals:
-
SCA (Onshore UAE) allows public fundraising across the UAE and suits projects with local investor focus.
-
DFSA (DIFC) offers international credibility, supports loan and investment crowdfunding (usually for accredited or opt-in retail investors), and has a base capital requirement around USD 140,000.
-
ADGM (FSRA) is friendly to innovative fintech models and suitable for firms working with Abu Dhabi entities.
We'll assess your target audience, ownership structure, capital availability, and regulatory comfort to determine the optimal path.
2. Pre-Application Engagement
Each regulator encourages early dialogue:
-
SCA: We can engage with their fintech team to clarify how Cabinet Resolution 36/2022 applies to your model.
-
DFSA: A pre-application meeting is standard. For novel models, we might explore an Innovation Testing License (ITL).
-
ADGM: Offers RegLab access or pre-authorization meetings with FSRA.
3. Company Setup and Capitalization
Depending on jurisdiction, you'll need to:
-
Incorporate in the relevant zone: DIFC, ADGM, or onshore UAE. Onshore structures may still require a UAE national partner unless exempted under new rules for financial services.
-
Inject base capital into a UAE bank account. DIFC’s base is approx. AED 500k; SCA’s is unconfirmed but likely between AED 500k–1M based on anecdotal reports. We'll confirm and coordinate the banking setup.
4. Application Preparation
This includes drafting:
-
A full business plan, financials (including 3–5 year projections), and platform overview—clearly showing how your model aligns with each regulator’s rules (e.g., DFSA COB module, or SCA’s Resolution).
-
CVs and background documentation for management, with fit-and-proper questionnaires. Key personnel must demonstrate relevant experience and UAE residency plans.
-
Core operational policies, such as AML/CFT frameworks, risk management, client money handling, business continuity, and IT governance. These policies must reflect regulatory standards (e.g., DFSA’s rules on Client Assets or SCA escrow arrangements).
We’ll also address investor education protocols, KYC procedures, and IT security (including cloud compliance where relevant).
5. Form Submission and Regulator Review
-
DFSA and ADGM submissions go through their portals. After review, they’ll schedule meetings to scrutinize the business model, governance, and compliance.
-
SCA may require physical or e-submission, and coordination with the UAE Central Bank for loan-based models.
Regulators may request a platform demo to visualize your onboarding and compliance steps. We help build or simulate this as needed.
6. Approval and Licensing
Upon approval:
-
DFSA and FSRA issue licenses with specific endorsements (e.g., loan or investment crowdfunding). Conditions such as IT audits or investor caps may apply.
-
SCA provides a license certificate and potentially registers your company on their portal.
-
Post-approval steps include finalizing your UAE office setup, activating UAE residency visas for senior staff, and securing any required insurance.
A regulatory inspection or audit may occur within the first year. We prepare you in advance.
The timeline depends:
-
DFSA/ADGM: Typically 3–6 months from submission to license issuance.
-
SCA: Similar or slightly longer, given coordination with the Central Bank and newness of the crowdfunding regime.
We aim to minimize delays by delivering regulator-ready materials from the outset.
7. Post-Licensing Implementation
We assist with:
-
Opening bank accounts (operational and client money).
-
Integrating payment gateways.
-
Aligning with credit bureaus or local registries (e.g., UAER for pledges).
-
Meeting ongoing reporting obligations (quarterly and annual filings with DFSA/SCA, client fund reports, etc.).
-
Providing ongoing compliance support, including outsourced compliance officer services or internal compliance training and readiness for inspections.
OUR OFFERS
At NUR Legal, we assist clients in obtaining Crowdfunding license in UAE, one of the most prestigious and trusted jurisdictions.
For entrepreneurs and firms considering the launch of a crowdfunding business, we offer precise Legal Opinions to assess licensing requirements, compliance readiness, and the appropriate regulatory path based on your business model.
For those ready to proceed, we provide a full licensing service—covering company incorporation, preparation and submission of the license application.
​
Full package Licensing
Navigating the Crowdfunding licensing process can be challenging. Our team provides end-to-end support to make it seamless
-
Assessment of your crowdfunding model against DFSA regulations and ECSP alignment (if applicable)
-
Strategic advice on structuring the firm within DIFC (e.g., Private Company Limited by Shares vs. LLP)
-
Preparation and submission of DFSA application
-
Financial services license or Retail endorsement application
-
Assistance with DIFC ROC incorporation procedures
-
Commercial license issuance
-
Drafting of all required policies and procedures (AML, complaints, risk, IT security, etc.)
-
Preparation of a comprehensive business plan, platform description, and risk management strategy
-
Support with data protection registration (US$ 1,250) and annual renewal (US$ 500)
-
Guidance on preparing financial projections and shareholder structure documentation
-
Sourcing and coordination of office leasing within DIFC-compliant buildings
-
Assistance with onboarding key personnel and preparing fit-and-proper documentation
-
Liaison with DFSA during the review process, including handling queries and follow-ups
-
Representation and preparation for DFSA interviews or clarification meetings
-
And more — complete legal and operational support for Brokerage licensing success
LEGAL FRAMEWORK
Crowdfunding in the United Arab Emirates (UAE) has gained significant momentum over the last decade as a viable alternative for raising capital. As the country continues its strategic shift towards a knowledge-based, innovation-driven economy, crowdfunding has emerged as a vital tool for startups, SMEs, and even charitable organizations to secure funding from a broad base of contributors. Recognizing its potential and associated risks, the UAE has instituted a robust legal and regulatory framework to govern crowdfunding activities, ensuring investor protection, financial stability, and market integrity.
1. Definition and Types of Crowdfunding
Crowdfunding refers to the process of raising small amounts of capital from a large number of individuals or entities, typically via online platforms. In the UAE, the main types of crowdfunding include:
-
Donation-Based Crowdfunding: Contributors donate money to support a cause or project without expecting any financial return.
-
Reward-Based Crowdfunding: Contributors receive a tangible item or service in return for their funds.
-
Equity-Based Crowdfunding: Investors receive shares or a stake in a business in return for their investment.
-
Debt-Based (Peer-to-Peer Lending): Investors lend money to businesses or individuals with the expectation of being repaid with interest.
2. Regulatory Bodies
Several regulatory authorities in the UAE oversee different aspects of crowdfunding, depending on the nature of the fundraising activity:
-
Securities and Commodities Authority (SCA): Regulates equity and debt-based crowdfunding platforms operating onshore in the UAE.
-
Dubai Financial Services Authority (DFSA): Regulates crowdfunding platforms within the Dubai International Financial Centre (DIFC).
-
Financial Services Regulatory Authority (FSRA): Regulates platforms in the Abu Dhabi Global Market (ADGM).
-
Central Bank of the UAE (CBUAE): Supervises any lending activities and ensures compliance with broader financial regulations.
-
Islamic Affairs and Charitable Activities Department (IACAD): Regulates donation-based crowdfunding, especially for charitable or humanitarian causes.
3. Key Legal Developments
a. SCA’s Regulatory Framework for Crowdfunding (2020)
In 2020, the Securities and Commodities Authority introduced a detailed framework to license and regulate crowdfunding platforms. Key features include:
-
Licensing Requirements: All equity and lending-based crowdfunding platforms operating onshore must obtain a license from the SCA.
-
Capital Requirements: Platforms must meet minimum paid-up capital thresholds to ensure financial resilience.
-
Operational Controls: Mandatory internal controls, cybersecurity measures, and risk management procedures are required.
-
Investor Protection: Rules are in place to categorize investors (retail, qualified) and limit their exposure to high-risk investments.
-
Disclosure Obligations: Platforms must disclose detailed information about the fundraising entities, risks, and use of funds.
b. ADGM and FSRA Framework
ADGM introduced a comprehensive Regulatory Framework for Peer-to-Peer Lending and Equity Crowdfundingunder its FinTech regime. Highlights include:
-
P2P Lending Platforms: Required to operate under a license as a “Regulated Activity.”
-
Client Asset Protection: Clear guidelines for segregating client funds and safeguarding investor money.
-
Technology Governance: Emphasis on platform security and digital infrastructure.
-
Investor Limits: Caps on the amount retail investors can invest, unless they qualify as high-net-worth individuals or institutional investors.
c. DFSA’s Approach to Crowdfunding
The DFSA has implemented a tailored framework for crowdfunding within DIFC, mirroring international best practices. Features include:
-
Suitability Requirements: Platforms must assess the appropriateness of investment products for different investor categories.
-
Disclosure and Transparency: Obligations to publish relevant data and financial projections of fundraisers.
-
Monitoring and Supervision: Platforms are subject to ongoing compliance audits and supervision by the DFSA.
4. Crowdfunding for Charities and Public Causes
Crowdfunding for charitable and humanitarian causes is tightly regulated in the UAE. It is illegal to raise funds for charitable purposes without prior approval. As per Federal Law No. 3 of 2021 on Regulating Donations:
-
Approval Required: All fundraising activities must be authorized by licensed charities and overseen by relevant emirate-level authorities.
-
Penalties: Unauthorized crowdfunding for charitable causes may result in severe penalties, including imprisonment and fines.
-
Permitted Platforms: Only government-approved platforms, such as Dubai’s “Jood” and the UAE’s “DonorBox” and “YallaGive,” are allowed to operate.
5. Sharia Compliance in Crowdfunding
Given the Islamic financial principles prominent in the UAE, crowdfunding platforms may also offer Sharia-compliant products. These platforms must:
-
Avoid interest-based (riba) transactions for Islamic investors.
-
Structure equity or lending mechanisms in line with Islamic finance principles, such as Mudarabah, Musharakah, or Murabaha.
-
Obtain certification from a recognized Sharia Board.
6. Consumer and Investor Protections
The UAE legal framework includes several safeguards for consumers and investors engaging with crowdfunding platforms:
-
Risk Warnings: Platforms must clearly communicate investment risks to users.
-
Cooling-Off Periods: In certain cases, investors can withdraw their pledges within a specified timeframe.
-
Anti-Money Laundering (AML) and Know Your Customer (KYC): Mandatory compliance with AML/KYC obligations to prevent misuse of crowdfunding for illicit activities.
-
Audit and Reporting: Regular submission of financial and operational reports to regulatory authorities.
7. Technological and FinTech Considerations
Crowdfunding is part of the UAE’s broader FinTech strategy, aimed at promoting financial innovation. Platforms are encouraged to join regulatory sandboxes operated by SCA, ADGM, and DIFC to test new models under supervision. The government also incentivizes:
-
Blockchain-based platforms for transparency and auditability.
-
AI-driven risk assessments for investor profiling and fraud detection.
-
Integration with national ID (Emirates ID) for secure KYC.
8. Cross-Border and International Regulation
The UAE encourages international collaboration for cross-border crowdfunding initiatives. However:
-
Foreign crowdfunding platforms must obtain appropriate licenses to solicit funds in the UAE.
-
Exchange of information and mutual recognition agreements may be in place between UAE regulators and foreign jurisdictions.
Conclusion
The UAE’s legal framework for crowdfunding reflects a careful balance between encouraging financial innovation and ensuring investor protection and financial integrity. The structured licensing regime, emphasis on transparency, and integration with Islamic finance and charitable oversight position the UAE as a regional leader in regulated crowdfunding. As the ecosystem matures, further refinements are expected to enhance scalability, international interoperability, and alignment with emerging FinTech trends.
OUR SERVICES
Ready to pursue a UAE Crowdfunding license? Contact us for tailored legal guidance and a smooth licensing process in UAE.
​
At NUR Legal, our services encompass:
-
Regulatory Consultation
Assessing the best jurisdiction and license type for your business.​
-
Documentation Assistance
Preparing and reviewing all necessary documents.​
-
Application Management
Handling the submission and liaison with regulatory bodies.​
-
Post-Licensing Support
Ensuring ongoing compliance and addressing any regulatory updates.
