Crowdfunding in Dubai is the process of funding a project by collecting donations from a large group of people through authorized online platforms. Crowdfunding generally involves three parties, the person raising funds, the online platform provider, the people providing the funding through the platforms. There are many crowdfunding platforms in UAE such as Beehive and Eureeca.
Crowdfunding has a revolutionary effect as it lets people finance a larger goal with the help of small money. Today this strategy is helping people get finance for their personal projects, traditional bank loans and big real estate project development. The Dubai government has launched DubaiNext which is a digital crowdfunding program to support SMEs. In March 2022, the UAE Cabinet gave approval for crowdfunding for public and private sectors.
What is Crowdfunding?
Crowdfunding is a strategy used to fund a project by collecting a small amount of money from a large number of people, through online platforms.
Types of Crowdfunding – Crowdfunding in Dubai
The most common types of Crowdfunding include,
- Donations Model. Funders donate money for a project or cause without expecting anything in return.
- Rewards Model. Funds are collected in exchange for a future reward.
- Crowd-Sourced Equity Funding. CSEF is where investors are given shares in a company in exchange for the funds they provide.
- Peer-to-peer or Debt Lending Model. Lenders give loans to borrowers with agreed interest rates, or rates fixed by the crowdfunding platforms.
Crowdfunding Platforms in UAE
Below are some of the examples of Crowdfunding platforms in the UAE,
- DubaiNext
- Eureeca
- Beehive
The Dubai Financial Services Authority (DFSA) is the regulatory authority for crowdfunding platforms in the UAE.
Crowdfunding in Dubai
In the UAE, fundraising for social causes and charities are done and regulated by state-based licensed platforms. However, if fundraising is done for loans and investments or debt based funding is a new concept which is only tested on a small scale and yet to be regulated at a wide level. The following authorities are responsible for regulation of financial services and activities,
- The Central Bank of UAE
- The Securities & Commodities Authority (SCA)
- In Dubai, the authorities are, Dubai Financial Services Authority (DFSA), in the Dubai International Financial Center (DIFC).
- In Abu Dhabi, Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Market (ADGM).
Crowdfunding in Dubai (DIFC)
A regulatory framework is launched by Dubai Financial Services Authority (DFSA) for investment and loan-based crowdfunding platforms. This regulatory framework is considered the first in the Gulf Cooperation Council (GCC). The purpose of these regulations is to license and protect the rights of clients involved in crowdfunding programs providing finances to the SMEs in the UAE.
The authority creates parts of DFSA’s regulatory framework to create an innovation friendly system according to the UAE’s National Innovation Strategy. The goal of DFSA regulations is to increase growth in the Fintech industry in the country by focusing on the specific requirements of Crowdfunding platforms. The regulations provide protection to the customers and enforcement of laws in the Fintech industry.
Best Crowdfunding Platforms in UAE – Crowdfunding in Dubai
Here is the list of Crowdfunding websites in the UAE ro learn about crowdfunding Dubai real estate market and selecting the right one for investment or funding goals.
SmartCrowd – Crowdfunding in Dubai
SmartCrowd is Dubai’s top and MENA’s first regulated real estate investment platform. It simplifies real estate investment by allowing multiple investors to accumulate their finds together. Once a property is fully funded, the platform creates a special purpose vehicle (SPV) to form a transparent ownership system.
The SPV works as a separate company for shareholders to become its shareholder. According to the requirements of Dubai Land Department, the SPV is included in the DIFC’s public register.
Investment Type. Buy-to-let
Industry. Real Estate
County of Operation. UAE
Minimum investment. 150 EUR
DubaiNext – Crowdfunding in Dubai
DubaiNext is a crowdfunding platform introduced by the Dubai Government. It was established to help Dubai based investors and businesses with creative projects to start a campaign through the digital platform.
It is based on All-or-nothing framework, where a goal is set for fundraising, but nothing is kept until the fundraising goal is achieved. After achieving the funding goal, the amount will be transferred to him via Dubai SME. On the other hand, if the goal is not achieved, the amount will be refunded to the donors.
The campaigner is allowed to keep the full ownership of the project. Contributors are allowed to select from different rewards offered by the campaigner.
The main goal of DubaiNext is to urge start-ups and youth to get support from the community through crowdfunding. It empowers a generation to succeed in the competitive market and strengthen the role of SMEs in the economic development of the country.
Thara Crowd Lending – Crowdfunding in Dubai
It’s a financial technology company which specializes in financing property development projects. Thara Crowd Lending connects institutional and individual investors with investment options in the property development sector.
Thara offers diverse investment products with high-paying monthly returns. The crowdfunding Dubai real estate platform is shariah compliant and specialized team following highest standards of transparency and honesty.
Investment Type. Debt
Industry. Real Estate
Country of Operation. Saudi Arabia, UAE
Minimum Investment. 1,000 EUR
Wefunder – Crowdfunding in Dubai
Wefunder crowdfunding platform allows investment from as low as $100. You are free to choose which companies you want to invest in and join a communication of investors.
Small businesses and startups can use this platform to raise funds from a community of more than 1 million investors. It supports different types of fundraising such as community rounds and crowdfunding and helps individuals throughout the whole process. Wefunder allows individuals with age 18 or older to invest.
Investment Type. Equity
Industry. Start-ups, SMEs, Sustainability, Health & Science, Green Energy
Country of Operation. Netherlands, UAE, USA
Minimum Investment. 100 USD
Stake – Crowdfunding in Dubai
It is a digital property investment platform that allows individual investors to invest their money in lucrative properties in rapid growth markets such as Saudi Arabia and Dubai. It allows you to make an impressive real estate portfolio with a minimum investment of AED 500 and make passive income. The platform is open for investors from all over the world to invest in real estate in Saudi Arabia and Dubai.
Investment Type. Buy-to-let
Industry. Real Estate
Country of Operation. Saudi Arabia, UAE
Minimum Investment. AED 500
Beehive – Crowdfunding in Dubai
It is a peer-to-peer (P2P) Dubai based lending platform that helps investors connect with SMEs looking for investment. Beehive was established in 2014 which is the first P2P platform in the middle east which is regulated by Dubai Financial Services Authority.
Beehive offers Sharia-compliant and conventional loans which allows investors to expand their portfolios along with supporting SMEs in different sectors. The funding process is quick and starts from AED 50,000. It offers flexible repayment terms from 6-36 months.
Investment Type. P2P Lending
Industry. SME
Country of Operation. UAE
Minimum Investment. 500 AED
RealityMogul
It allows commercial real estate investment through advanced technology. RealityMogul provides its members with access to commercial real estate opportunities which allows them to make income. The platform offers many investment opportunities to both certified and non-certified members depending on their type of investment.
Investment Type. Equity, Debt
Industry. Real Estate
Country of Operation. USA
Minimum Investment. 25,000 USD
YallaGive
YallaGive is a certified online crowdfunding and donation platform which is currently operating in the Middle East with substantial presence in the Emirates and England. It allows various organizations to raise funds for different charitable causes. The platform is open for individuals and organizations who want to contribute to charitable causes.
Investment Type. Donations
Industry. Health & Science, Sport, Social Cause
Country of Operation. UAE, Saudi Arabia, UK
Minimum Investment. 2 AED
Baytukum
Baytukum is one of the best crowdfunding platforms that has transformed the investment in real estate in Dubai. It allows investors to co-own properties by making a minimum investment of AED 5,000 and earn a passive income.
The platform manages the whole investment process such as purchase of property, its management, and sale which provides an ideal environment for investors. Baytukum has a transparent investment system with no hidden fees or charges.
Investment Type. Buy-to-let
Industry. Real Estate
Country of Operation. UAE
Minimum Investment. AED 5,000
How to Select a Decent Crowdfunding Platform in the UAE?
You can evaluate a good crowdfunding platform by researching the following questions.
- How long has the platform been exciting and what are its reviews?
- Were there any defaults and how were they resolved?
- What are its terms & conditions? Are they similar to other service providers?
- What are the fees for borrowers and investors?
Final Thoughts
Just like any other funding alternative, crowdfunding in Dubai has many risks. That’s why it is necessary to do proper market research in crowdfunding platforms before making any investments. Through thorough research and ensuring that the platform and funding project is safe for you, you can earn a steady income.
Al Riyady has a qualified team ready to answer all your business related issues. Our experienced consultants can help you choose the best Crowdfunding Platform in the UAE. We also provide Audit Services, Accounting Services, Tax Consultancy and more.
