HomeGCCUAEUAE startup challenges revealed by HUB71’s Study
UAE startup challenges revealed by HUB71’s Study
The study, “Rethinking Banking for Startups” highlights that opening a bank account in UAE is a cumbersome process for most startups which can take up to 65 days.
Following the launch of its white paper, Hub71 partnered with Mashreq Bank and First Abu Dhabi Bank to conduct pilot studies with an aim to identify and resolve the obstacles faced by startups.
The Hub71 white paper, through its study, acknowledges the challenges that startups encounter when opening a bank account in the UAE.
The white paper with the findings of the study that specifically focuses on solutions for tech startups is titled “Rethinking Banking for Startups”. It reveals that on average the time taken to open a bank account in UAE for a startup is 63 days. In the paper, Hub71 outlines the possible measures to reduce this time to less than 5 days.
Hub 71 said in a statement that, “The whitepaper highlights that 30 percent of startups fail to open a bank account, forcing them to conduct their daily transactions via non-UAE based foreign banks which subjects startups to high international fees and presents lost opportunities for UAE banks. Furthermore, the results revealed that startups who had a more complex shareholding structure, such as those who were funded by a VC, took a long time on average – up to 105 days – to set up a local bank account.
“Despite the UAE’s entrepreneurial drive, the delays experienced by startups were cited as due to stringent documentation processes and lengthy ‘Know Your Customer’, KYC, procedures that differ from bank to bank. These are key areas that Hub71 and partners aim to help solve for startups across the UAE.”
“The UAE is experiencing significant digital transformation led by startups and setting up a UAE bank account is critical in order for startups to thrive. This whitepaper demonstrates Hub71’s ability to bring together key players to further improve the ease of doing business in the UAE. Hub71 recognizes the need for startups to access efficient and reliable banking products and services; so we are looking forward to driving positive change by working closely with our financial institution and regulator partners, who have played a major role in the economic development of Abu Dhabi and the UAE” Nader Museitif Head of Partnerships and Business Development -Hub71.
Hub71 is also working in collaboration with banks, licensing entities and local authorities to bring out a plan for the startups with very little financial history. They will be releasing more of the results from their study in 2020 Q4 and welcomes corporate partners to come forward and join them in identifying and solving more such issues faced by startups in UAE.
