15 December, 2023
Crowdfunding is a method of raising funds for a specific cause or project by soliciting small contributions from a large number of people, typically over a short period, often online and through social networks. It can be used for various purposes, such as charitable causes, creative projects, business startups, or personal expenses. There are different types of crowdfunding, including donation-based, investment-based, and rewards-based. It allows individuals and businesses to access capital from a wide pool of investors, and it has become increasingly popular due to its accessibility and potential to cultivate a community around a project or business
The DIFC (Dubai International Financial Centre) offers a Property Crowdfunding License through the DFSA (Dubai Financial Services Authority). This license allows the operation of a Property Crowdfunding Platform, where residential properties can be listed for investment. However, commercial real estate and off-plan properties are not eligible for listing. The capital requirements for this license are specific, with a maximum value of US$ 5 million for a single property listing. The DFSA also regulates other types of crowdfunding, such as investment-based and loan-based crowdfunding
The DIFC (Dubai International Financial Centre) has specific capital requirements for its Property Crowdfunding License. Here are the key points:
DIFC firms can service clients outside the center and in the greater UAE, as long as they primarily provide services and products from their registered office in the DIFC area. The revised law confirms that DIFC-registered entities can supply services and products outside the DIFC, as long as they are primarily provided out of the firm’s premises in the DIFC area. Marketing and promotional activities are also allowed outside the center. However, there may be additional rules to follow when actively marketing funds from the DIFC
The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in or from the DIFC, a purpose-built financial free zone in Dubai, UAE
. Its regulatory mandate includes asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, an international equities exchange, and an international commodities derivatives exchange. The DFSA also supervises and enforces anti-money laundering (AML) and counter-terrorist financing (CTF) requirements
Setting up a financial services firm in the DIFC offers several advantages, including: Opportunities in the Middle East, Africa, and South Asia (MEASA) region, with strong economic and demographic growth
The Dubai International Financial Centre (DIFC) operates as a leading financial hub in the region, offering a supportive business environment for financial and non-financial businesses. Key aspects of how the DIFC operates include:
Comprehensive legal and regulatory framework: The DIFC has a robust and clear regulatory system, with the Dubai Financial Services Authority (DFSA) as its independent regulator
The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in or from the DIFC, a purpose-built financial free zone in Dubai, UAE. Its regulatory mandate includes asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, an international equities exchange, and an international commodities derivatives exchange. The DFSA’s mission is to develop, administer, and enforce world-class regulation of financial services within the DIFC, and its regulatory approach is risk-based to avoid unnecessary regulatory burden while expecting high standards of ethical conduct and integrity from the DFSA and its people
The DIFC (Dubai International Financial Centre) application process involves the following steps:
Identifying the business activity: The DIFC provides a non-retail activities guide that identifies whether a proposed business activity can be registered and licensed in the DIFC
Regulatory business plan: The applicant must submit a regulatory business plan to the DFSA (Dubai Financial Services Authority), outlining the proposed business activities, organizational structure, and risk management
Formal submission to the DFSA: The applicant must submit a formal application to the DFSA, including the regulatory business plan and other supporting documents
Detailed review process: The DFSA conducts a detailed review of the application, which may involve additional information requests and meetings with the applicant
Issuance of the DIFC Commercial License: If the application is approved, the DIFC Registrar of Companies issues the DIFC Commercial License, subject to the completion of conditions stated in the IPA (Incorporation and Participation Agreement)
Bank account opening: The applicant can open a bank account in the DIFC to conduct business
The DIFC offers a supportive business environment, streamlined setup process, and world-class infrastructure for financial and non-financial businesses