For businesses specialising in fintech and blockchain solutions, the Middle Eastern market offers a wide range of opportunities, though it remains a challenging one to enter. This article explores the key countries in the region, their needs, and the challenges companies face when expanding into these markets.

In 2024, IdeaSoft, an IT company headquartered in Lisbon with Ukrainian roots, began actively scaling in the UAE market, despite having been present there for 5-6 years. Previously, we operated on a case-by-case basis, but after finding the right partners, we significantly accelerated our expansion in the region. In this article, I will share our experience entering the market, the challenges we faced, and the key takeaways from our journey.

How the entered the UAE market

Just like entering any other market, successfully expanding into the UAE requires a deep understanding of its unique characteristics, key decision-makers, and the decision-making process itself. Additionally, it is crucial to clearly identify the primary needs of the local market and adapt your offerings accordingly.

The UAE has a consistent demand for cutting-edge technologies, actively investing in innovative solutions to maintain its position as one of the most dynamic tech hubs globally. This creates favourable conditions for companies offering high-tech products and solutions.

Our expansion into the UAE market was built upon:

• In-depth market analysis to understand its specifics
• Tailoring our offerings to align with local business realities
• Developing a strategic approach for engaging with key stakeholders

By following these steps, we managed to accelerate our growth in the region and establish a strong presence in this highly competitive market.

Market characteristics

The UAE is undoubtedly one of the most dynamic regions in the world, experiencing rapid growth across all key sectors. Almost every industry here aspires to be a leader in innovation, actively localising and adapting numerous technologies and products – many of which are still in their early stages of development. This creates an unprecedented pace of change across various sectors.

The main innovation-driven industries in the UAE are centred around the country's key economic zones. Among the most in-demand areas are:

• Tourism and hospitality – luxury hotels, interactive services for tourists, and digital hospitality solutions
• Oil and gas sector – implementation of cutting-edge technologies to enhance extraction and refining efficiency
• Service industry – growth in financial services, logistics, and B2B solutions
• E-Government – digital transformation of public services and automation of bureaucratic processes
• Ease of doing business – solutions for quick company registration and simplified regulatory procedures

The UAE constantly seeks advanced technologies as part of its strategic goal to remain one of the world’s most rapidly developing tech regions. As a result, companies offering innovative solutions in these fields have great opportunities to successfully enter the UAE market.

While the UK is one of the most developed IT markets in the world, with a mature startup ecosystem, access to venture capital, and a large number of tech companies, including global corporations, the UAE is a rapidly growing market that actively attracts tech businesses through tax incentives, government initiatives, and special economic zones. The UK already has a high level of digital maturity across sectors such as finance, retail, and healthcare, whereas the UAE is currently experiencing significant investment in smart city initiatives, fintech, AI, and blockchain, particularly in Dubai and Abu Dhabi, with strong government support. This creates substantial potential for companies to grow and expand in the UAE market.

What to expect from the UAE market in the next five years

The UAE has long moved away from dependence on natural resource extraction. After a transitional period of focusing on tourism, the country has successfully established itself as the most business-friendly region in the Middle East for Western companies. Today, the UAE is actively developing its real estate sector, service industries, and creating highly favourable conditions for doing business.

Over the next five years, especially in our industry, we anticipate significant transformations driven by the adoption of advanced technologies:

• Mass adoption of blockchain in the public sector and economy. The UAE government is actively testing and deploying decentralised technologies where they provide real value, such as in administration, finance, and asset management
• Development of fintech and payment infrastructure. Modernisation of payment systems, transitioning to faster, more secure, and more efficient financial solutions
• Digital identification and related services. The growing role of digital IDs to simplify access to services for citizens and businesses, integrating with financial and government services
• Tokenisation of real-world assets. A gradual shift toward digital ownership of real estate, financial instruments, securities, and other assets

These advancements are expected to make the UAE market even more technologically advanced, attractive to international businesses, and financially efficient.

What companies need for a successful entry into the UAE market

For companies planning to enter the UAE market in the coming five years, several key factors must be considered.

• Expertise in their niche: a business must have deep expertise in its field. This is a fundamental requirement, as the UAE market prioritises a high level of professionalism and innovation
• High-level service: success in the region depends on a company’s ability to provide excellent service and customer support. The UAE upholds the highest standards across all industries, from government services to private businesses
• Understanding local specifics: adapting the business model to local realities, including cultural, economic, and regulatory aspects, is essential. This helps avoid common mistakes and accelerates market integration
• Finding the right partners: one of the most critical success factors is establishing strong local partnerships. Reliable partners help businesses adapt faster, build trust, and expand operations efficiently

How we implemented this success formula

We successfully combined all these components and found the right local partners, allowing us to scale our business in the region. This not only helped us establish a strong foothold in the UAE market but also enabled us to grow dynamically, keeping pace with the region’s rapid evolution and increasing demand for innovative solutions.

Today, the UAE resembles New York in the 1950s – a region that is buzzing with innovation, where a continuous flow of entrepreneurs and companies drives remarkable change. Just like back then, there are numerous opportunities, but also many opportunists who come and go.

What does it take to succeed in the UAE market?

• A high-quality product or deep expertise: successful market entry is only possible for companies that offer a truly strong product or possess unique expertise in their niche
• A strong team: with high competition, success is unlikely without an experienced and adaptable team capable of responding quickly to changes
• The right local partners: the market is dynamic, and operating without local connections and a deep understanding of its specifics is challenging. The right partners facilitate scaling and long-term success in the region
• Competition: many players, few true experts: The UAE market is flooded with international companies, yet many of them focus more on selling ideas rather than delivering real, high-quality solutions. Demand is strong, but clients are looking for the best product – and they want it yesterday.

Unlike in the United Kingdom or the United States, where decisions are based on need and detailed unit economics analysis, financial efficiency in the UAE is often secondary. The priority is securing the best product in its category, regardless of cost.

Is the startup ecosystem in the UAE developed?

When it comes to the startup ecosystem in the UAE, the country has Hub71, a government-backed tech hub aimed at becoming the leading platform for technology companies. It is still relatively young, and while there aren’t many strong players yet, the potential for growth is enormous. The UAE’s startup ecosystem has yet to reach the level of Silicon Valley, but at this pace, the situation will change drastically within the next five years. The UAE is actively investing in attracting tech companies, and regional competition – for example, with Saudi Arabia – is accelerating this transformation.

However, the UAE is undeniably a country of the future. In terms of digital government services, ease of doing business, taxation, and service infrastructure, it is one of the most advanced regions in the world. Even the government operates as a service for both individuals and businesses, making the country a magnet for top global talent.

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