The United Arab Emirates’ cabinet authorized the use of crowdfunding by both public and private sectors, the state news agency WAM reported on 21 March 2022, Monday
Crowdfunding operators, investors and applicants will be able to engage in crowdfunding activities under the newly approved UAE System for Crowdfunding Platform Operators. They have to verify that applicants have a clear work plan. The system supports the financing of commercial projects, especially small and medium ones.
This came as His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, chaired the last Cabinet meeting at Expo 2020 Dubai.
Crowdfunding is the practice of raising money from a large number of people to fund a project or business.
The strategy covers all technical aspects associated with the regulation of crowdfunding platform operators. The Securities and Commodities Authority (SCA) will be regulating crowdfunding operations and operators. This includes definitions; scope of application; operator licensing requirements; operator obligations towards SCA and investors; financing applicant obligations; and the rights of the investor, the operator, and the financing applicant. The strategy also addresses supervision, inspections, and penalties.
“Crowdfunding is one of the best tools to support the financing of innovative business ideas, and it will open a door for young people and entrepreneurs,” said the Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum.
The cabinet also approved a strategy aimed at enhancing the presence of women in leadership positions. Other than this, the Cabinet also approved a new law on cooperatives, allowing them to be listed on financial markets, with new types of cooperatives covering areas such as digital and finance.
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