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What does the law say Crowdfunding in UAE | BSB Legal


Unlocking the vault of opportunity in the UAE, Crowdfunding is now emerging as the legal catalyst for entrepreneurship . UAE has recognized the potential of Crowdfunding and has taken significant legal strides to regulate this evolving financial landscape. In this article, we’ll delve into the legal intricacies of Crowdfunding in UAE.

Understanding Crowdfunding in the UAE:

Crowdfunding is the process of collecting funds from a multitude of individuals, often through online platforms, to finance a business, project, or idea. In the UAE, this financing model has garnered attention as it addresses the challenges faced by Small and Medium Enterprises (SMEs) in accessing conventional funding through banks.

Regulatory Framework:

The UAE has implemented a robust regulatory framework to govern Crowdfunding activities. Notably, the Cabinet approved the UAE System for Crowdfunding Platform Operators, assigning the Securities and Commodities Authority (SCA) the responsibility of regulating these activities. This framework covers various aspects, including operator licensing, obligations, and investor rights, ensuring a secure environment for Crowdfunding in the UAE.

Types of Crowdfunding:

Crowdfunding in the UAE encompasses diverse models, catering to the unique needs of entrepreneurs and investors. Here are the prominent types:

1. Donation-Based Crowdfunding:This model involves individuals contributing funds without expecting any financial returns. It is often used for charitable purposes and supporting non-profit organizations. Notable platforms like Aflamnah facilitate donation-based Crowdfunding in the region.

2. Rewards-Based Crowdfunding: In return for their financial support, backers receive rewards or products from the campaign. Buckscapital is a prime example of a platform that adopts this model in the UAE.

3. Crowd-Sourced Equity Crowdfunding: Investors in this model receive shares in the company they support, making it akin to traditional equity investments. Platforms like Eureeca have gained popularity in the MENA region for equity Crowdfunding.

4. Debt or Peer-to-Peer Lending: This model involves lending funds to borrowers with an expectation of receiving the principal amount along with agreed-upon interest. Beehive, which operates under Shariah-compliant principles, is a notable platform in Dubai offering peer-to-peer lending.

Legal Protections for Workers

In addition to Crowdfunding regulations, the UAE government has prioritised worker’s rights. A federal legislation has been approved to address work-related injuries and occupational diseases in the private sector, ensuring the rights and protection of workers.

The UAE Gender Balance Council has also introduced a strategy to enhance the presence of women in leadership positions and promote entrepreneurship.

Recent Developments:

The UAE approved a new law for cooperative associations, allowing them to be listed on financial markets. This move opens doors for cooperative associations to access a broader pool of investors and financial resources.

Additionally, the endorsement of Crowdfunding platform operators’ strategy demonstrates its commitment to fostering innovation and supporting entrepreneurs.

Navigating the legal complexities of Crowdfunding in the UAE requires legal consultancy. Lawyers in Dubai with expertise in financial regulations can provide valuable counsel to entrepreneurs, investors, and platform operators.

Benefits of Crowdfunding in the UAE

Crowdfunding offers several advantages to both entrepreneurs and investors in the UAE:

Accessibility: Crowdfunding provides a more accessible and efficient way for SMEs and startups to secure funds compared to traditional banking channels.

Transparency: Investors have the opportunity to thoroughly assess Crowdfunding campaigns and companies before contributing funds, enhancing transparency.

Diverse Funding Options: Crowdfunding encompasses various models, allowing businesses to choose the one that aligns with their goals.

Market Testing: Entrepreneurs can gauge market interest and gather valuable feedback through Crowdfunding campaigns, helping them refine their offerings.

Investor Diversity: Crowdfunding brings together a diverse group of investors, spreading the risk and potentially attracting a wider audience of supporters.


In the UAE, Crowdfunding is a vital catalyst for entrepreneurship, regulated by the Securities and Commodities Authority (SCA). This innovative funding model includes donation-based, rewards-based, equity, and peer-to-peer lending options. Recent legal developments, such as cooperative associations being listed on financial markets, underscore the UAE’s commitment to supporting innovation and entrepreneurship. To navigate the legal intricacies of Crowdfunding in UAE, consult experts in financial regulations, like Dubai-based lawyers. Crowdfunding offers transparency, accessibility, and diverse funding options, benefiting both entrepreneurs and investors in the region. Embrace this dynamic financial landscape for your business success.