22 August 2026 14:54 | Last updated: 22 August 15:31 2026
أبراج الاتحاد في أبوظبي
Summary
The UAE is enhancing intangible asset financing with the WIPO by introducing intellectual property as collateral to facilitate funding for small and startup companies through valuation and guarantees.
A New Venture in Financing
The Ministry of Economy and Tourism is developing a new financing ecosystem for intangible assets, particularly intellectual property, within the UAE’s financial and economic system. The goal is to expand the definition of assets that companies can use to secure the necessary funding by establishing a mechanism for incorporating intangible assets into credit assessment and guarantees.
According to a report from the ministry titled “Utilizing Intangible Assets Rich in Intellectual Property in the UAE: A Pathway to Securing Financing,” developed in cooperation with the World Intellectual Property Organization (WIPO), the project aims to explore how to convert the economic value embedded in intellectual property into value that financial institutions can recognise and assess for lending purposes. These assets include patents, trademarks, industrial designs, copyright, software, trade secrets, expert knowledge, and customer lists, in addition to the potential revenue from certain intellectual property rights.
Intellectual Property as Collateral
WIPO asserts, as per the report, that intellectual property can theoretically be used as collateral for debt financing while the ownership of the asset usually remains with the borrower, with the lender receiving a security interest should the borrower default. The project’s significance is underscored by its relevance to the UAE’s economy, where small and medium enterprises contribute over 63.5% of the non-oil GDP but often struggle to obtain financing due to insufficient physical assets to serve as collateral. This project thus aims to bridge the gap between innovation and funding.
Sequential Phases of the Project
The initiative unfolds in several phases: first, identifying intellectual property, where companies determine their owned patents, trademarks, software, designs, and rights or expertise, ensuring these rights are legally registered and protected. Next is the valuation phase, which is crucial since banks cannot evaluate a patent or technology in the same manner as a property with a clear market price. The report recommends developing specialised capacity and standards for valuing intellectual property, allowing lenders to understand both the current value of the asset and its recoverable value in the event of a default.
The third phase involves establishing collateral registration to enhance the framework for registering intellectual property guarantees, providing transparent information regarding the intellectual assets submitted as collateral. Fourth, after identifying and valuing the assets and registering the collateral rights, banks can analyse financing based on both the company’s financial status and the economic value of its intangible assets. The fifth stage emphasises monitoring the asset during the loan period, as there should be ongoing oversight of the asset’s value and protection, along with the documentation of any new rights that arise during the loan term.
Lastly, the sixth phase focuses on the default handling process, a pivotal area since the challenge extends beyond loan issuance to the lender’s capacity to recover funds in case of borrower default. The report proposes establishing a dedicated entity for the recovery of intellectual property value alongside a fund for repurchasing assets or defaulted loans, which would facilitate a market for handling these assets in case of default. The project aims to create a market and framework that enables banks and investors to better align their financing with the intellectual assets of companies.
Progress Achieved So Far
The project did not commence from scratch. The initial phase involved assessing the intellectual property financing market in the UAE, identifying opportunities, obstacles, and international best practices, and training 20 companies on managing, evaluating, and marketing intellectual property. As a result, the average evaluation scores improved by 30% post-training. Additional guidance was provided to ten companies, and a multi-stakeholder government team focused on intellectual property financing was formed.
Feedback from the advisory programme indicates that 85% of participants reported a significant positive impact on their businesses, while 94% expressed willingness to recommend the programme to others. In the long term, the project’s objective is to transform how the UAE’s financial system perceives a company’s value. Traditionally, banks focus on tangible assets like properties, equipment, and cash flows for evaluation and collateral; however, as the knowledge economy evolves, the importance of intangible assets such as technology, brand, software, and patents is growing. Therefore, the core of this project lies in integrating these intangible values into the formal financing cycle.
A Gradual Transition
Through this initiative, the UAE aims to gradually shift from a model asserting that “financing requires physical assets” to one where companies can assert, under clear standards and regulations, that they possess intellectual assets with economic value that can be proven, assessed, and secured. This aligns with WIPO’s global vision of transforming intellectual property financing from a limited practice to a more widespread component of financial systems. It is crucial to recognise that the market is still in its infancy, necessitating the development of valuation, guarantees, and risk management mechanisms.
Ultimately, the essence of the project seeks to formulate new financial, legislative, evaluative, and market frameworks that position innovation as a potential source of collateral and funding, especially for companies without substantial physical assets.