In March 2022, Dubai government approved the establishment and practice of crowdfunding to encourage entrepreneurship and innovation, a legislation that will boost the economy of multiple industries in the UAE.
 

Chairing the final Cabinet meeting that took place at Expo 2020 Dubai before it shuts down forever, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai, announced the official legislation and regulation of crowdfunding in public and private sectors to finance new projects and support small and medium enterprises (SME’s).

 

This will be done via the new UAE System for Crowdfunding Platform Operators, regulated by the Securities and Commodities Authority.

 

His Highness Sheikh Mohammed said, “Crowdfunding is one of the best means to support the financing of new innovative commercial ideas and support entrepreneurs by financing their ideas.”

 

What is Crowdfunding?

 

 

Crowdfunding is the activity of raising funds for a project or business by a large group of people contributing small investments to provide capital that enables the venture into fruition.

 

In the past it has typically gained fame for humanitarian practices such as raising funds for medical expenses of ill children. However, there are many other uses such as funding small businesses, innovations, and education.

 

How Does it Work?

    1. The entrepreneur or initiator creates a campaign with a mission, vision, and purpose, and a fundraising goal, which is the amount required to get the project off the ground. They may also offer an incentive for expediting funds, such as a stock share in the venture.
    2. The crowdfunding campaign goes live on a regulated platform and a marketing initiative begins, typically online, to reach as many channels and communities as possible.

 

How Crowdfunding Affects the Real Estate Sector

 

 
Mohammad Abu Ghaush, Group Chief Financial Officer at D&B Properties stated that crowdfunding is already causing a huge wave on how we invest in different industries. Now, more than ever, it is widely accessible to invest into real estate among various industries, and own a share that sees growth over the years.

“Crowdfunding is an opportunistic tool within financial instruments, and more people are realizing its potential,” Abu Ghaush said.

 

 
“The real estate market is consistently receiving higher demand in Dubai as we have observed each quarter from our own data and from the reports published by the Real Estate Regulatory Authority (RERA). With the launch of a safe and regulated crowdfunding platform in Dubai, anyone can invest and own a share in innovative projects or businesses. Where before a handful of investors would fund a project, now the campaign would be open to individuals and corporations to own a share in those projects and businesses seamlessly."
 

"The announcement of establishing crowdfunding platform in the UAE will boost the economy as it will facilitate and finance innovative projects and businesses within the small and medium enterprises, which will play a major role in population growth and that will definitely have a direct positive impact on real estate sector in Dubai. Compared to other developed cities around the world, Dubai's competitive edge in innovation, secured financial & legal environment, and most importantly the real estate price levels as per UBS Global Real Estate Bubble Index, makes the city's real estate price level and returns one of the most attractive price levels compared to all developed countries and cities around the world. For this reason, it is evident to me that Dubai will continue to grow.”

 

Models of Crowdfunding

 

The UAE Government portal reports on the common types of crowdfunding:

 

 
  • Donations model where funders donate a sum for a cause and do not expect any returns
  • Rewards model where funds are asked for in exchange for a future reward
  • Crowd-sourced equity funding (CSEF) where the investors receive shares in a company in exchange for the fund they provided
  • Debt or peer-to-peer lending model where the lenders provide loans to borrowers and expect it to be paid back with interest at an agreed rate, or a rate fixed by the crowdsourcing platform.

 

What are the regulated platforms available in UAE?

Aflamnah, Eureeca, Humming Crowd Real, Beehive, Yomken and Zoomaal are some of the platforms available.

WAM, the Emirate’s official news agency, reported on the technical aspects associated with the regulation of crowdfunding platform operators, listing definitions such as: scope of application; operator licensing requirements; operator obligations towards SCA and investors; financing applicant obligations; and the rights of the investor, the operator, and the financing applicant. The strategy also addresses supervision, inspections, and penalties.


Comment as a guest.

Related Market Trends

The Best Upcoming Real Estate Projects in UAE 2023

The Best Upcoming Real Estate Projects in UAE 2023

26 - Jan Market Trends

The UAE is a world-renowned real estate market and is considered to be one of th...

Dubai Records 122K Real Estate Transactions Worth AED 528 Billion in 2022

Dubai Records 122K Real Estate Transactions Worth AED 528 Billion in 2022

31 - Dec Market Trends

Dubai real estate market is experiencing a steady rise to the top, with 2022 alo...

Impact of Sports Tourism in Dubai Amidst FIFA World Cup 2022

Impact of Sports Tourism in Dubai Amidst FIFA World Cup 2022

15 - Nov Market Trends

As the world gears up for the FIFA World Cup Qatar 2022 to commence this Novembe...

Dubai Prepares for Economy Spike Amid FIFA World Cup Qatar 2022

Dubai Prepares for Economy Spike Amid FIFA World Cup Qatar 2022

27 - Oct Market Trends

In 2022, football's most prestigious tournament will take place in one of the wo...

How Digitalization is Transforming Dubai Real Estate Sector

How Digitalization is Transforming Dubai Real Estate Sector

18 - Oct Market Trends

As Dubai undergoes an era of digital transformation, the real estate sector is e...

Dubai Creek Harbour September 2022 Report

Dubai Creek Harbour September 2022 Report

07 - Oct Market Trends

Dubai Creek Harbour is a new waterfront development by Emaar P...

Dubai - Historical Success & Continued Resilience

Dubai - Historical Success & Continued Resilience

21 - Sep Market Trends

Dubai has come a long way since its humble beginnings as a small trading post on...

Abu Dhabi Report 2022

Abu Dhabi Report 2022

21 - Sep Market Trends

The United Arab Emirates was formed on the 2nd of December 197...

Downtown Dubai August 2022 Report

Downtown Dubai August 2022 Report

01 - Sep Market Trends

Downtown  Dubai  is  a  large-scale, ...

How UAE is Managing the Cryptocurrency Revolution

How UAE is Managing the Cryptocurrency Revolution

13 - Sep Market Trends

From the first time the word cryptocurrency appeared online in 2009, to its firs...

New Millionaire Haven - What This Could Mean For Dubai Residents

New Millionaire Haven - What This Could Mean For Dubai Residents

31 - Aug Market Trends

If you’re one of the world’s wealthiest individuals, where do you go...

The Only 'Branded Residence' Guide You'll Ever Need in Dubai

The Only 'Branded Residence' Guide You'll Ever Need in Dubai

23 - Aug Market Trends

In a city filled with luxury, it's no surprise that even homes...

Arabian Ranches July 2022 Report

Arabian Ranches July 2022 Report

08 - Aug Market Trends

A master project by Emaar Properties, Arabian Ranches is an up...

Dubai Short Term Rentals Witness Demand Surge in 2022

Dubai Short Term Rentals Witness Demand Surge in 2022

22 - Jul Market Trends

With high-rise skyscrapers, Michelin-star gourmet bistros, and...

Dubai Real Estate Transactions Exceed AED 22 Billion in June 2022

Dubai Real Estate Transactions Exceed AED 22 Billion in June 2022

30 - Jun Market Trends

Dubai Land Department (DLD) reports a total of AED 22.69 billion in real estate ...

Dubai Hills Estate June 2022 Report

Dubai Hills Estate June 2022 Report

30 - Jun Market Trends

A multipurpose, gated sub-community development of ...

Dubai Records Highest Volume of Realty Transactions In Past Decade

Dubai Records Highest Volume of Realty Transactions In Past Decade

17 - Jun Market Trends

Dubai recorded the highest ever volume of real estate transactions within the pa...

Dubai Real Estate Transactions Exceed AED 17 Billion in May 2022

Dubai Real Estate Transactions Exceed AED 17 Billion in May 2022

31 - May Market Trends

Dubai Land Department (DLD) reports a total of AED 17.76 billion in ...

Jumeirah Village Circle April 2022 Report

Jumeirah Village Circle April 2022 Report

25 - May Market Trends

Jumeirah Village Circle Q1 2022 experienced a 71% increase in ...

Dubai Quarterly Real Estate Transactions Highest-Ever Since 2010

Dubai Quarterly Real Estate Transactions Highest-Ever Since 2010

13 - May Market Trends

Dubai’s real estate market recorded a total of 25,972 real estate transact...

Dubai Real Estate Market Surpass 25k Transactions in Q1 2022

Dubai Real Estate Market Surpass 25k Transactions in Q1 2022

29 - Apr Market Trends

Dubai’s real estate market recorded a total of 25,972 real estate transact...

Dubai Real Estate Transactions Exceed AED 6.3 Billion in April Week 3

Dubai Real Estate Transactions Exceed AED 6.3 Billion in April Week 3

22 - Apr Market Trends

About 2,145 real estate and property transactions worth AED 6.3 billion were con...

Renewed 10-Year Golden Visa for Off-Plan Investors Offer Ample Opportunities

Renewed 10-Year Golden Visa for Off-Plan Investors Offer Ample Opportunities

21 - Apr Market Trends

The UAE Cabinet, headed by His Highness Sheikh Mohammed bin Rashid Al Makto...

Dubai Land Department Make Exclusive Real Estate Data Available, Encouraging Transparency

Dubai Land Department Make Exclusive Real Estate Data Available, Encouraging Transparency

15 - Apr Market Trends

In a pioneering move to strengthen transparency in transactions and position Dub...

DUBAI REALTY TRANSACTIONS EXCEED AED 5 BILLION IN APRIL WEEK 1

DUBAI REALTY TRANSACTIONS EXCEED AED 5 BILLION IN APRIL WEEK 1

08 - Apr Market Trends

A total 2,012 real estate transactions worth 5.3 billion in total were conducted...

ABU DHABI REPORTS AED 71.5 BN IN 2021 REAL ESTATE DEALS

ABU DHABI REPORTS AED 71.5 BN IN 2021 REAL ESTATE DEALS

21 - Feb Market Trends

The thriving UAE capital reports a whopping AED 71.5 billion real estate transac...

DLD LAUNCH FIRST RESIDENTIAL RENTAL PERFORMANCE INDEX

DLD LAUNCH FIRST RESIDENTIAL RENTAL PERFORMANCE INDEX

28 - Feb Market Trends

Dubai Land Department (DLD), in cooperation with Property Finder, launched the 1...

DUBAI PROPERTY TRANSACTIONS EXCEED AED 16 BILLION IN FEB

DUBAI PROPERTY TRANSACTIONS EXCEED AED 16 BILLION IN FEB

28 - Feb Market Trends

Dubai Land Department (DLD) reports a staggering AED 16.06 billion in real estat...

 DUBAI LAUNCHES CENTRE FOR REAL ESTATE INVESTORS SERVICES AT DWTC

DUBAI LAUNCHES CENTRE FOR REAL ESTATE INVESTORS SERVICES AT DWTC

21 - Mar Market Trends

Dubai consolidates its vision to provide an exceptional experience for real esta...

Dubai Real Estate Transactions Exceed  AED 22 Billion in March 2022

Dubai Real Estate Transactions Exceed AED 22 Billion in March 2022

04 - Apr Market Trends

Dubai Land Department (DLD) reports a staggering AED 22.55 billion in real estat...

DUBAI RECORDS AED 1.1 BN WORTH OF REALITY TRANSACTIONS ON 5 APRIL

DUBAI RECORDS AED 1.1 BN WORTH OF REALITY TRANSACTIONS ON 5 APRIL

06 - Apr Market Trends

Dubai real estate market recorded 336 sales transactions worth AED995.74 million...

EMAAR REJOICES IN 209% INCREASE IN HIGHEST EVER SALES IN 2021

EMAAR REJOICES IN 209% INCREASE IN HIGHEST EVER SALES IN 2021

18 - Feb Market Trends

In a groundbreaking record, Emaar Properties achieves the highest ever sales per...

 DUBAI INITIATIVE PROVIDES FREE WATER REFILLS ACROSS CITY

DUBAI INITIATIVE PROVIDES FREE WATER REFILLS ACROSS CITY

18 - Feb Market Trends

An initiative launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al ...

DUBAI WINS WORLDS MOST POPULAR DESTINATION

DUBAI WINS WORLDS MOST POPULAR DESTINATION

14 - Feb Market Trends

The world's tallest skyscraper, the world's highest infinity p...

DUBAI PROPERTY TRANSACTIONS EXCEED AED 5 BILLION IN JAN

DUBAI PROPERTY TRANSACTIONS EXCEED AED 5 BILLION IN JAN

17 - Jan Market Trends

Dubai Land Department (DLD) reports a staggering AED 5.4 billion in real estate ...

DUBAI ISSUES LAW ON EXPROPRIATION OF PROPERTY FOR PUBLIC USE

DUBAI ISSUES LAW ON EXPROPRIATION OF PROPERTY FOR PUBLIC USE

11 - Jan Market Trends

 On 11 January, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice Pr...

DUBAI RECORDS 84K REAL ESTATE TRANSACTIONS WORTH AED300 BILLION IN 2021

DUBAI RECORDS 84K REAL ESTATE TRANSACTIONS WORTH AED300 BILLION IN 2021

07 - Jan Market Trends

Dubai real estate market is experiencing a steady rise to the top, with 2021 alo...

D&B PROPERTIES: LAUNCHING NEW BRAND IDENTITY CAMPAIGN

D&B PROPERTIES: LAUNCHING NEW BRAND IDENTITY CAMPAIGN

04 - Apr Market Trends

Award-winning real estate agency D&B Properties has offici...

UAE SPACE AGENCY TO LAUNCH FIRST SPACE ECONOMIC ZONE

UAE SPACE AGENCY TO LAUNCH FIRST SPACE ECONOMIC ZONE

26 - Jan Market Trends

The UAE Space Agency and Masdar are in talks to establish the nation’s fir...

St. Regis: Downtown Dubai - Finale Project Launghing Soon

St. Regis: Downtown Dubai - Finale Project Launghing Soon

26 - Jan Market Trends

The monumental finale project is nearly here! Emaar Properties...

Innovative Dubai E-Platform to Predict Future Pandemics

Innovative Dubai E-Platform to Predict Future Pandemics

26 - Jan Market Trends

The Ministry of Health and Prevention (MoHAP) in Dubai has launched SPHERE, an E...

UAE INTRODUCES 9% CORPORATE TAX ON BUSINESS PROFITS

UAE INTRODUCES 9% CORPORATE TAX ON BUSINESS PROFITS

01 - Feb Market Trends

The Ministry of Finance has announced that the UAE will introd...

OVER AED 3 BILLION PROPERTY TRANSACTIONS IN FEB WEEK 1

OVER AED 3 BILLION PROPERTY TRANSACTIONS IN FEB WEEK 1

07 - Feb Market Trends

The open e-service by Dubai Land Department (DLD) records AED 3.42 billion worth...

DUBAI REAL ESTATE PASSES AED 3.9B MARK IN FEB WEEK 2

DUBAI REAL ESTATE PASSES AED 3.9B MARK IN FEB WEEK 2

11 - Feb Market Trends

Dubai’s real estate industry is off to a robust year, wi...