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In association with Dubai International Financial Centre
  1. Finance
22 April, 2022

How Dubai’s innovation boom is creating opportunities for venture capitalists

DIFC offers the simplest and quickest way to establish a VC fund in the UAE through its digital and automated process and quick turnaround time.

Technological innovation is advancing at an unprecedented rate, and nowhere is this more apparent than in the emerging venture markets (EVMs). Analysis by data analytics platform MAGNiTT shows that markets in the Middle East, Africa, Pakistan and Turkey saw record-breaking activity levels in the investment space in 2021, with venture capitalists (VCs) raising $6.9bn in funding.

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Venture capital: explore global opportunities at DIFC

Dubai is a regional hub for innovation, and DIFC leads the way. For venture capital firms, DIFC offers access to a market worth USD 8 trillion and the region’s largest FinTech cluster. This whitepaper explores Dubai’s unique proposition for venture capital firms and provides insights into the DIFC ecosystem. It presents a guide to the simplest and quickest way to establish a venture capital firm in DIFC.
by DIFC WAM
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In the Middle East and North Africa region, the UAE ranks as the most active market for venture financing with 151 deals in 2021, which is almost double the number of deals in 2020, according to the data analytics and consulting company, GlobalData. The growth of this market is predominantly driven by a population that is younger than that of Europe, North America and parts of Asia. According to Our World in Data, the UAE has a median age of 34 years as compared with 42.7 years across Europe and 38.3 years in the US.

Dubai is the business and investment hub of the region, and Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia region, continues to be a gateway to opportunities for venture capital (VC) businesses.

“DIFC offers the simplest and quickest way to establish a VC fund in the UAE through its digital and automated process and quick turnaround time,” says Salmaan Jaffery, DIFC’s chief business development officer. “We understand the requirements of VCs and have everything needed to facilitate their success, including a rich pool of start-ups.”

The presence of VCs tripled in DIFC between 2020 and 2021 as the financial centre focused on providing an ecosystem to support start-ups and scale-ups as well as the investors and enterprise partners they need to thrive.

“VCs are looking to invest in the best companies, and DIFC and Dubai have a track record of attracting the best and most innovative talent,” says Jaffery.

Driving innovation

DIFC has already attracted more than 600 growth and innovation companies. The DIFC Innovation Hub, the region’s leading innovation ecosystem, brings stakeholders together, ranging from government bodies to entrepreneurs. 

DIFC’s state-of-the-art infrastructure and increasing lifestyle opportunities attract talent from around the world. The financial centre runs a regular calendar of events, such as the recent Blockchain Week and Talent Week that seek to bring together leading minds from around the world.

DIFC has created a unique environment by bringing together top talent, VCs, corporate and educational partners and accelerators all under one roof, and these are supported by new regulations and excellent office options. VCs operating from DIFC can access a breadth of talent and skills as well as a full suite of services in one self-serving ecosystem.

Progressive regulations

DIFC benefits from the UAE’s high-ranking business transparency, as compared with other countries around the world, along with a flurry of business-friendly government policies that have been introduced in the country in recent years.

“We enable VCs to operate in a physical and legal environment that is top-notch in terms of transparency and global standards,” Jaffery explains.

He adds: “We have revamped VC regulations to aggregate capital and talent, benchmarked our regulations against global best standards, waived capital requirements, cut regulatory costs and established a discounted commercial licence for setting up a VC fund. We have also eliminated many of the onerous reporting and operational requirements.”

DIFC is an English common law-based jurisdiction with an independent regulator and an 18-year track record. It is already home to 17 of the top 20 global banks, five of the top ten asset managers and some of the region’s leading investors.

DIFC was the first regional jurisdiction to create crowdfunding regulations and has developed some of the most comprehensive money services regulations as well. Recently, DIFC was selected by the UK government for assessment as an adequate jurisdiction based largely on a review of the equivalence of the DIFC Data Protection Law with the UK General Data Protection Regulation and UK Data Protection Act of 2018. Such regulations are vital to attracting investors and entrepreneurs. 

Continuous growth

DIFC is continuing to adapt ways of doing business to support its growth. New licensing products, such as the Innovation Licence and Artificial Intelligence Licence, have been designed to attract the most ambitious companies from around the world. These companies can access flexible real estate options, partnership programmes and new products and incentives.

An environment that attracts more VCs will attract more start-ups in a powerful virtuous cycle. DIFC works to provide the best support to innovators and investors alike, boosting innovation, success and growth for the entire ecosystem.

To find out how DIFC can accelerate your growth, click here.

Free Brochure
img

Venture capital: explore global opportunities at DIFC

Dubai is a regional hub for innovation, and DIFC leads the way. For venture capital firms, DIFC offers access to a market worth USD 8 trillion and the region’s largest FinTech cluster. This whitepaper explores Dubai’s unique proposition for venture capital firms and provides insights into the DIFC ecosystem. It presents a guide to the simplest and quickest way to establish a venture capital firm in DIFC.
by DIFC WAM
Enter your details here to receive your free Brochure.

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