Long read
DIFC Tech Startups
The Dubai International Financial Centre, or DIFC, is known as a premium onshore financial center, not just in the region, but worldwide (voted the 8th best, to be exact). So what’s a financial center doing dabbling in technology? Read on to know more.
Creating a tech ecosystem involves work, and the DIFC has taken big steps in a positive direction...
The background
The DIFC Fintech Hive is located in the heart of Dubai, within a thriving ecosystem.
Big Ticket Acquisitions
The GCC, and the UAE in particular, has seen a flurry of tech-related activity in the past few years. While the Amazon acquisition of Souq.com, and the Uber–acquisition of Careem have hogged the headlines, a large number of big names in technology have been creating bases in Dubai. The hottest tech startups, from Silion Valley to Bengaluru, are looking at the UAE as a springboard to launch their growing services in the MENA region.
Fintech
Financial Technology, or Fintech, is a subset of this influx of technology-related interest – driven largely by the inactiveness of the incumbent players in the financial space. Fintech companies have specific requirements for an ecosystem where they can thrive – robust regulation, access to a sophisticated user base, great digital infrastructure and a hotbed of talent.
The UAE offers these, and more – access to a diverse user base comprising individuals and companies from over 180 countries.
It’s no wonder then, that startups in Asia look at the Middle East as the jurisdiction of choice when it comes to their immediate expansion plans.
The DIFC – a tech ecosystem
The DIFC started seriously looking at tech companies a little over 3 years ago. It’s first initiative was the DIFC Fintech Hive – an accelerator of sorts. What started with a cohort of 11 startups and a bit of press, has grown into a program that goes beyond offering short-term booster packs. It is now a full-fledged ecosystem of technology companies – fintech, edtech, regtech, even mindfulness-tech – over 130 companies and growing.
These tech initiatives are aimed to attract both regulated and non-regulated technologies. The former would need to interact with the Dubai Financial Services Authority, or the DFSA, to obtain regulated licenses based on the activities that they intend to engage in. For instance, payment processors would need to apply to the DFSA under the newly-created Category 3D license, satisfy all the in-principle conditions and then commence business. Similarly, a crowdfunding platform would need to obtain a Category 4 license, in order to conduct equity, loan-based or property crowdfunding activities.




Innovation Testing Licenses (ITL)
The ITL is the DFSA regulatory sandbox, that helps innovative fintech startups test their products in a controlled environment – it provides firms temporary flexibility to test and develop concepts within the sandboxed environment subject to various restrictions and modifications.
Recent successes include www.sarwa.com and www.smartcrowd.ae, both ITL graduates, now operating as fully regulated DFSA firms.
Financial incentives include subsidized license costs for four years, co-working spaces at reduced costs and generous allowances for visas on limited spaces. Also, visa costs are subsidized as well.
Soft incentives include being part of a growing ecosystem of financial and non-financial technology startups, marketing and PR exposure and access to a wide range of banking, VC and service provider partners, including DIFC’s own 100 million dollar Fintech Fund. Regular workshops are also conducted in the DIFC Fintech Hive – these are very helpful to companies looking at doing business in the UAE, or the greater MENA region.
for a detailed look at the costs involved in setting up a DIFC tech startup license (non-regulated).
Co-working spaces
The DIFC Fintech Hive has a new home in the Gate Avenue, behind the Liberty House and Emirates Financial Towers. Two floors of lively space, with over 200 workstations, offices, cubicles and common areas to foster creativity and discussions.








The process
The process of obtaining a DIFC tech startup license
Submit application
Submit the application, including a business plan and KYC
Initial Approvals
The DIFC pre-screens the application and issues approvals
LEGAL STRUCTURE
Register the legal structure at the DIFC Registrar of Companies
Pay the fees
Pay for the license, co-working space and establishment card (for visas)
GET License!
