With Dubai well on the road to being the Smartest City in the region (and possibly the world), the FinTech industry is seeing a surge in businesses looking to make the emirate their home
The rate of FinTech growth in Dubai continues to garner worldwide attention, largely due to the ‘Dubai Blockchain Strategy’, launched by the Smart Dubai office and the Dubai Future Foundation in 2016. With Dubai moving to become the first blockchain-powered government by 2020, both local and international FinTech companies are increasingly viewing the emirate as the testbed for their latest solutions. The Dubai Land Department was the world’s first government entity to conduct all transactions through Blockchain technology. Accelerator programmes like DIFC’s FinTech Hive, which is focused on addressing the evolving needs of the region’s financial services industry, are helping to attract innovative startups from across the globe.
The financial solutions ecosystem received a close review at the World Economic Forum’s Annual Meeting of the Global Futures Council, held in Dubai last month. During the event the FinTech revolution was brought to the forefront of discussions due to the pace of innovation within the sector.
The role of the government
While the Dubai Government’s digital strategy is an important growth driver of both the FinTech and broader technology sectors, the UAE’s young and digitally-enabled demographic is also a drawcard for investors. In a region where more than half of the population is under the age of 25 and where smartphone penetration is among the highest in the world, tech firms see the potential for rapid user adoption rates. According to The World FinTech Report 2017, 50.2% of consumers globally already engage with a non-traditional finance company for transactions.
“We continue to work closely with the government to ensure that Dubai remains the location of choice for tech investment into the region. However, our recent efforts within the FinTech start-up community have highlighted the need for an even more robust ecosystem and specific infrastructure to be put in place to ease the incorporation process for these new businesses,” said John Martin St.Valery, Founder and CEO, of Links Group,an Equiom company and a leading provider of commercial facilitation and advisory services in the Middle East.
“Promisingly, the Dubai Government recognises this and is eager to collaborate with emerging sectors, such as FinTech, to put in place the necessary frameworks that will help cement the emirate’s position as an epicentre for future industries and the Fourth Industrial Revolution,” he continued.
Change in the law
In addition to fast tracking the development of the legal infrastructure to support these new industries, the Government is also working to eliminate some of the perceived barriers to entry for foreign companies. Most recently, the Dubai Government announced plans to reform the UAE Commercial Companies Law to ease the foreign investment regulations which will see certain sectors liberalised from the 51:49% shareholder split currently in place.
Commenting on the changes, Martin St.Valery said: “As has been the case for a number of years, relaxation in the local partner majority shareholding is sometimes allowed and is likely to be extended to additional sectors. This is a positive move as Dubai pushes ahead with its economic vision. There is likely to be an enormous boost to foreign direct investment should this long awaited change to the companies law be implemented. And we’re already seeing a positive reaction to the news. In November Links Group recorded its busiest month on record for new business enquiries, with two-thirds of those coming from new foreign businesses wanting to enter the UAE.”