Is Dubai a new hotspot for fintech developers?
In May 2021 the UpTrader team visited the first fintech exhibition in Dubai after a forced 1.5-year break. During our 1-week visit we noticed that a lot of our clients and fintech companies opened their offices in Dubai. So we decided to do a small research of the trend and figure out why the Arabian night attracts the financial industry. We were wondering whether it is a good idea to open a representative office in the Emirates or not?
So there are at least 3 reasons why this might be interesting.
Real estate market in Dubai now
The real estate market in Dubai has been falling since 2014. And according to some expert estimates, it has not yet reached the bottom. In addition to Dubai’s own market problems, the global pandemic caused the prices to go down. In general, at the moment the market is still trying to deal with the consequences of the flooding of real estate objects that happened in 2014. At that time frozen construction projects began to be completed and released to the market after a protracted credit crisis in 2008. Eventually supply exceeded demand, and continues to exceed it to this day.
This year the market has fallen 8% for purchases and 12% for rentals, and continues to fall. New construction projects are flooding the market this year. Now prices are 30% lower than 2014 prices. However, to reach 2010 prices, according to experts, the market needs to lose another 20%.
In May 2021, our team had meetings in some Business Bay towers and we were impressed by the desolation of these giants. One can say wind and sand are walking through the unfinished offices. On the one hand, all this makes a depressing impression and reminds us of post-apocalypse from Blade Runner 2050, on the other hand, really low prices and rather lively business activity in Dubai attract the attention of business and make you think about the prospects for opening an office there.
Good bye Cyprus?
For the last two decades, Cyprus has been the traditional place for fintech developers. The offices of many well-known brokers were located there, as well as satellite companies serving them: software, legal, PR and advertising companies. Cyprus had become the forex capital for many years. That became possible because of Cyprus financial regulator, the only European regulator whose license at one time cost reasonable money and leniently regulated broker activities. Different types of brokers could get a license, and they did. One of the conditions for getting a license was the opening of an office in the country and the employment of a certain number of Cypriots.
The maintenance of such a small office costs 20–25 thousand euros per month. It could number in the hundreds of thousands for a bigger one. In general, the years were rich, and the morals in Forex were quite free.
However, since about 2015, the legislation of European countries has slightly begun to tighten the rules for financial brokers. Cyprus did not stand aside and soon obtaining a license in Cyprus became as difficult as in other European jurisdictions. As a result, brokers stopped getting Cysec’s licenses, followed by the closure of offices and the migration of companies. And there was not much sense left for the fintech service companies to open their representative offices there. But we are wondering where is the new capital of forex now?
Is Dubai the business and financial center of the future?
The United Arab Emirates have long been working on diversifying the economy, building a model based not only on the export of raw materials, but also on other industries, including developing business tourism. For this, in addition to the construction of new areas, the authorities create attractive tax conditions for business. So the United Emirates has 5 tax-free economic zones (according to the number of the emirates). Companies registering a business there must pay about 12 thousand dollars a year, but their activities are free from tax. What other benefits does a business have by opening an office there? As we said, 0 taxes. Up to 5 employees of the company can get a residence permit.
According to current prices, a square meter costs an average of $25 per month. Maintaining a small office in Dubai of about 70 square meters costs about $ 2,500 per month. Another crucial benefit is an access to Arab banks. So even unlicensed
brokers who have problems with European banks can count on the loyalty of local ones.
The Emirates attract different types of business via the annual international exhibitions. It makes Dubai an attractive hub for fintech.
So experts say that real estate prices in the Emirates will hit the bottom by 2022, so maybe now is the best time to start looking for offices or apartments with a gorgeous view of the business center or the sea.
Launch market analytics feed in your Forex CRM
Which extra services do you offer your clients? If you think that a trading terminal, fast fund withdrawal, and copy trading services are enough to keep your clients loyal and satisfied, then you may not know your clients very well or have never tried to offer them something else.
One of the UpTrader brokers broadcasts a daily stock market analytics feed and technical analysis to its clients right in their personal account. Its CEO kindly allowed us to analyse their data for 2021. We considered two client groups: those who read analytics and those who do not. The results speak for themselves.
In 2021, customers who read analytics deposited on average 15% more per customer compared to those who did not use this tool. The median bill was 25% higher. At the same time, their trading volume increased by 230%!
Do you want the same results? Easy-peasy!
Daily up-to-date market analysis available in the trader’s room might increase the trading volumes of your company, resulting in more potential profit. This tool is already integrated into the UpTrader Forex CRM, however, only a few of our clients use it for additional sales.
Every day, market experts collect information, prepare materials, and publish technical and fundamental market analysis used by thousands of traders around the world.
This tool is already available to you in UpTrader Forex CRM. To begin broadcasting the feed, contact our support team, and you will gain access to an excellent tool for increasing sales and loyalty of your customers starting tomorrow.
Withdrawing funds from trading accounts is a very important part of business, because there are plenty of underlying issues that can cause serious reputational consequences for a broker and stress for clients. Fraud, stop-outs, withdrawal requests for a bigger amount than available equity, mismatch of payment details, problems with payment systems, KYC/AML non-compliance and a lot of other problems.
To avoid these problems and make withdrawals without risks for a broker and fast for a client, it is better to follow a certain procedure, where every step is under control of your departments. Your Forex CRM must have flexible settings of an approval withdrawal system.
The UpTrader team has developed a flexible withdrawal approval system that is integrated in UpTrader Forex CRM. For example, you can set it up so that your CEO will be making final approval of withdrawal requests of certain big amounts. You can set up this rule for all requests or only for those that are already approved by lower-ranking staff. It’s up to you. It is very important to verify your client with a KYC check, confirm payment details, to do this just direct all requests through a Compliance department. In some cases you might need requests approved by a phone call, so that you are sure that requests are submitted by a real client, not a scammer, so you can set up obligatory manager calls.
All these settings can be easily added in UpTrader Forex CRM.
UpTrader Forex CRM has the following settings you can use:
1. Approval depending on request amount
Withdrawal control is a standard and necessary procedure for financial broker security, but this doesn't have to prevent traders from withdrawing and depositing money quickly. For example, you can allow to withdraw all requests under $100 without additional checks. It means any withdrawal under $100 will occur automatically, but in a case you want to manually approve any amount, you can do it.
2. Know your client system in your Forex CRM.
Establish a rule that requests of any amount are directed to a Compliance department to complete KYC procedures.
3. A withdrawal amount is larger than the client’s deposit
If you hedge risks and use a hybrid model and a bridge, you probably need to control trading activity especially in an important market news period to control financial risk.
If you have special needs related to withdrawal approval procedures, write to [email protected] and we will see what we can do for you.
The main annual international fintech exhibition iFXEXPO will be held on 4-6th October 2021 in Cyprus. Vasily Alexeev, UpTrader CEO is going to be there. He will represent the UpTrader team and be ready to meet with our clients and partners.
UpTrader has released new services this year like a copy trading platform for MetaTrader 4 and MetaTrader 5, and it will be a pleasure to show you this popular service.
We are glad to invite all our clients and partners over there. This is a good occasion and nice place for efficient networking.
To make an appointment with Vasily Alexeev, please write to [email protected]
See you there!
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