Any viable business concept necessitates funding at the outset. As a result, if you don’t have enough money, forming a company in Dubai – or anyplace else in the world for that matter – can be difficult.
The good news is that the UAE has created a welcoming atmosphere for its startup community, with financial assistance available to prospective entrepreneurs, startups, and small businesses.
In the United Arab Emirates, there are five options for obtaining company capital. Angel investors, venture capitalists, institutional investors, and company incubators are examples of local fundraising and outreach programs. Let’s take a closer look at each of these funding alternatives.
One of the ways you can raise capital for your business is through local funding and outreach programs, such as:
H. H. Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, announced the foundation of the Khalifa Fund for Enterprise Development (KFED) in 2007, which provides accessible financing solutions to local investors, entrepreneurs, and SMEs in the country. The Fund’s purpose is to encourage entrepreneurship and investment in the UAE, as well as develop innovation and finance viable and creative company ideas that have a positive influence on the national economy in several areas. The KFED Programmes are divided into two types, namely: Funding Programmes (including microfinance, Khutwa, Bedaya, Zeyada, Tasnea, Zaarie, and Al Hasela) and Outreach Programmes (such as Al Radda, Ishraq, Sougha, and Amal) targeting certain categories.
Dubai SME is a Department of Economic Development entity that provides finance and other support services to start-ups and established SMEs.
According to Forbes Magazine, “angel investors” are “high-net-worth individuals, entrepreneurs, and families that invest in early-stage or startup companies in exchange for an equity ownership interest.”
This is one of the quickest ways to receive funding because it usually requires less documentation and a simpler funding process.
Finding the proper angel investor, on the other hand, is difficult since it takes an in-depth knowledge of reputable angel investors in the UAE, or at the very least, a local partner with sufficient resources to search for and communicate with such investors. If you’re seeking angel investors, go to the Dubai Angel Investors website and use this as a resource.
Another possible source of finance for your small business is venture capitalists (VC). These are private equity investors that are willing to put up substantial sums of money despite high risks since they stand to benefit a lot if the companies they back succeed in launching and maintaining their operations.
Having angel investors on board is equivalent to having this form of finance. When they have a local partner, agent, or business setup consultancy representing them, most entrepreneurs feel more confident in partnering with venture capitalists.
VentureSouq, which invests in high-growth early-stage digital firms; Shorooq Partners, a renowned seed-stage venture capital fund; and BECO Capital, an early-stage venture capital firm, are among the most active venture capital investors in the UAE.
Obtaining a loan from local institutional investors to start a business in Dubai or anyplace else in the UAE is also an option. Institutional investors are businesses that have access to other people’s money and invest it in a wide range of initiatives.
Although banks are the most well-known institutional investors, other industries such as insurance companies and mutual funds also lend capital to businesses.
Greenstone Equity Partners, the largest fund placement firm in the region, and Gulf Capital, a major alternative investing business, are two notable institutional investors in the country.
Business incubators are non-profit organizations that provide full-service support to entrepreneurs, including everything from market positioning and launch to marketing and funding. Astrolabes, the Dubai Technology Entrepreneur Centre (DTEC), In5, FinTech Hive, Turn8, and Techstars Dubai are just a few of the UAE’s top business incubators.
We use our vast local market experience at Alya Auditors to assist entrepreneurs with the many funding solutions accessible to them. We can connect clients with government organizations and commercial companies that give starting support and oversee peer-to-peer lending programs since we have the industry’s broadest network of partners.