New UAE crowdfunding regulations to further boost innovative ideas in the SME ecosystem

New UAE crowdfunding regulations to further boost innovative ideas in the SME ecosystem

Op-ed by Hisham Al Gurg, CEO, Seed Group and the Private Office of Sheikh Saeed bin Ahmed Al Maktoum


Ideas are easy. Implementation is hard.” This saying by ace author and well-known evangelist Guy Kawasaki condenses the essence of entrepreneurship very well. As rapidly as the entrepreneurial ecosystem is growing in various markets around the world, it is also a fact that not many of the deserving ideas get to see the light of the day.

Statistics state that 9 out of 10 start-ups don’t make it, 20 percent fall apart after a year, and 30 percent close within two years. You don’t need to dig deep to find out that financing is one of the major reasons for many deserving ideas not flourishing. Going by this equation, it would not be incorrect to say that a country’s start-up ecosystem is only as strong as its options for secure and reliable financing.

It is not unknown that small and medium enterprises (SMEs) are the backbone of any nation’s economy in today’s tech-driven, innovation-centric world. So, what is it that needs to be done to strengthen this backbone? What areas should authorities and governments around the world focus on to make it possible for their country’s economy to flourish?

The United Arab Emirates (UAE) has presented the world with answers to just these questions.  The UAE Cabinet’s approval of the new crowdfunding strategy last month opens avenues for the private and public sectors in the country to support the financing of innovative business ideas. The announcement, made by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE, and Ruler of Dubai, is set to play a bigger role in shaping the future of the nation’s economy.

As a form of alternative financing, crowdfunding will allow start-ups in the UAE with innovative ideas to raise a certain amount of capital through a larger set of investors who are interested in funding their projects or ventures online. The modern way of raising funds is so effective in the SME landscape globally that governments and big businesses around the world are now using it as a strategy for growth. Overall, the basic aim of crowdfunding is to encourage entrepreneurship and innovation.

As per the announcement, in the UAE, this will be done through a system for crowdfunding platform operators to be regulated by the Securities and Commodities Authority. The modalities have been put in place to make the UAE a level playing ground for businesses of all kinds and aspiring entrepreneurs from across the world.

This mandate on crowdfunding is a praiseworthy attempt to boost flexibility and bring about a variety of businesses in the UAE. It is a move that will further strengthen the country’s overarching goal of economic diversification. This means new business ideas are set to find strong financial backing as the liquidity pool makes the country’s economy a fertile ground for innovation—that is the power of crowdfunding.

So, if you have had an idea for a start-up, if you think you can contribute to the economy, or solve a pressing problem, you can now try out financial backing for your idea in the UAE. Not only will the country’s regulatory system ensure you get the best shot at it, but it will also ensure you get the best infrastructure and technological assistance to make your dream a reality.

2 Responses to New UAE crowdfunding regulations to further boost innovative ideas in the SME ecosystem

  1. Imtiaz Ismail Patel says:

    (+966551294139)
    As fallout o SME’s is acknowledged I had recommended in comments to HH Sheikh Hamdan bin Mohammed bin Rashid to devise a comprehensive program in combination with talented IT, AI, DATA SCIENCE ANALYSIS, Satellite support and drones where ever needed a software connected into all spheres of activity of any project; existing or coming up SME called “My Ship” سفينتي where all segments inside and outside the ship indicate the business environment to ensure success or warn against failure (trouble shooting and motivators) at all segments.
    Examples: negative, if I need a ball pen or a cigar lighter I have to seek 50 small shops in Dubai or if I need to change the number of my eye glasses I go in an area of Jeddah less than half km to find 200 shops competing with each other.
    Positive, innovative smart pen and solar lighter disrupts all these negative trends. Advances in Eye health and research in getting rid of glasses disrupts the need of the whole crowd of opticians.
    As an SME lead I had also commented/suggested water games on shores with zones for kids, ladies and youth diverting innovative gyms activity from hassles of appointments high charges and regular visits these water gyms come to you in a more lucid, non air-con natural environment. Finally no SME should be chosen to fail all of them have to ensure fair practices, culture of diversification, imagine and accept disruption or better be leaders in “disruption” extreme form of innovation to bring out in society mini taj mahal, mini Abu Dhabi Mosque, mini giant wheel of Dubai to give SME,s a dose of invicibility like those wonders of the world that sustain income till today.

  2. There is definately a lot to find out about this subject. I like all the points you made

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