Devika Raveendran
Founder and CEO, DR Partners
Corporate Advisory for Startups
Are you a startup owner looking for expert advice on how to take your business to the next level? Then listen up, because in this episode, we're diving deep into the world of corporate advisory for startups!
Devika Raveendran
Are you a startup owner looking for expert advice on how to take your business to the next level? Then listen up, because in this episode, we're diving deep into the world of corporate advisory for startups! Devika shares her extensive knowledge and experience in the field, providing valuable insights into the process and fundamentals of governance structure in the UAE. From explaining the benefits of having a sound governance structure to discussing the importance of compliance and risk management, this episode is packed with valuable information for entrepreneurs and startup owners. Whether you're looking to grow your business or simply seeking guidance to succeed in the business world, this episode is a must-listen. Don't miss out on this fantastic opportunity to take your startup to the next level!


Hey, Devika. How are you?


I'm very well Shafeekh. How are you doing?


Good, Awesome. I will just give an introduction about Devika to audiences. Devika is a founder and CEO at DR Partners. She is helping startups in the region with their legal matters and company registration in UAE. So, Devika I wanted to hear more about DR partners and about you from you.


Thanks, Shafeekh. So it's a pleasure and an honor and thanks for your initiative to come up with such a podcast. I'm sure it's going to be a great help for founders, especially founders like yourself and I am on the clock too. It's good to be a part out here, I would say. It's like you said, yes, DR partners is a boutique corporate advisory, a succession planning firm primarily set up to assist founders like yourself or coming into the region who need guidance right from a structuring the legal corporate to different stages which includes getting them operational in also to to have them up and running and help them with their market entry as well as growth plans, which requires, of course, raising capital. So that's what DR partners does in a nutshell. And then of course we can discuss it in detail later.


Awesome. And I think you're also part of like a couple of startup advisory boards. What's the story behind it? Like how I think you are helping some of the startups to raise funds. And I have seen recently that you have been on board of ARK Global.


Yes. So like you said, when I moved out and set up DR partners, the whole idea or rationale behind setting up such a firm was to help and be a one point or a one stop shop advisory firm to help founders across stages of growth. And when I started working for companies previously, we restricted ourselves only to company set ups and beyond that or structuring and beyond that, we never bothered.

And I realized that was an opportunity and there was a gap because the families who were the ultrahigh net worth or the family offices that we were catering to and the actual ones who were also supporting startups either as angel investors in different stages. So when I realized that ultimately we are a common bridge between startups and such investors and family offices, the DR partner tries to bridge that gap.

We thereby identify such opportunities. And because of my legal structuring and corporate background and also my experience in this industry since 2007 led me to take on selective mandates where, along with Dr. Vasco Dasgupta, of course, you met him at Abu Dhabi Finance week and we advise startups, we mentor them. I take care of the legal and corporate aspect, including the operations, strategies with regards to market entry.

And like you rightly said, the whole idea is then to help them grow and for growth. You also need not only a market expansion and a clientele and a customer base, but also access to capital. So we try and connect these startups that we advise on and have them raise capital from these family offices or angel investors, depending on whichever stage they are in.


That's very interesting because I think mostly like most of the family offices or that they are not well aware of the investment opportunities in the startup ecosystem. Right. And you must be like connecting to a lot of family offices and they don't have much awareness about how much, you know, the better the investments in startups are compared to other asset classes.

So they could also allocate a couple of portfolios or a fund into startups, which is great. And I think you are doing a great job there too to convince them to invest in startups.


Thank you so much. Yes, it's not an easy task, especially for conservative family offices. And I think my biggest challenge is even to get the mandate across to the principal, because when you speak to the investment office or the family office head, they have their own views about the startup. But what is the drastic change that I've seen and that's also thanks to founders like yourself who have come up with such unique propositions.

Finanshels, I'm sure, is as such a startup which is promising. And when they see the kind of value add that a startup brings in from their model, be it fintech, adtech, ecommerce, any platform and the revenue and the returns that the family offices have actually started seeing, I think is slowly helping them build confidence and they are looking at larger ticket size of investments.

Previously it was always a trend to say that, okay, fine, there's somebody in my network who’s invested and then I bring in someone, somebody else to invest, and that's how it would happen. But now it's getting more formalized. And professionals like myself, we make a constant effort to try and educate them, help them understand and help them with constant deal flows which suit their requirements.

Today, I was with the family office where they were already one of the market leaders of automobile, insurance and healthcare. And when I discussed my portfolio, they seemed quite excited saying that, you know, it's not only about returns, but if it can be a value add to our portfolio, why not? So, there is a slow shift that I see and which is positive.


Now, that's interesting because I think like if you look at some of the good families, big families here in the UAE. So there have been blends towards startups recently like new and in a couple of companies they got acquired in our group. So it's brilliantly done and also how they integrate their forward markets or their, you know, backward markets, which is also giving a new, new generation of or innovation recipe to their conventional business models, which is awesome.

Yeah. And how, how do you see, like, you know, like for me, I have a very basic question, Devika, just to understand, as a lawyer, whenever I wanted to meet a lawyer and I just want to understand because I was so confused when I came to Dubai to set up my startup here, like there is mainland, there is a freezone and there is ADGM.

There is the DAFC. I'm so confused about where to go for like what would you suggest for a startup? Like us, you know, what's the best way to register a company? Imagine we have investors on board and you know, we need to manage their shareholdings as well. So what's the best advice you have?


So I think there are a couple of factors which go in. And first and foremost, I would say that the majority of founders like yourself are they switched on. They have an understanding of what are the offerings, but there's so much of information out there in the public domain that it can actually get very confusing. Even when, There's so much literature which can be very educational and informative. The right structure, like you said in the last bit, is what I'm going to emphasise on when you have investors and exactly what would be the case for every startup.

Very unlikely that you would have a startup journey wherein the founders are pulling in money throughout till a stage wherein they are so sustainable. There will have to be investments coming in from different streams. So like you said, yes, UAE, though there's been so much of support from the authorities to try and promote the startup ecosystem, to attract new skill sets, new visas, etc. A question which generally needs to be asked is one where exactly am I getting licensed?

So do you have to be in the mainland? I'll just give you an overview without going into too much detail. Maybe at a stage or for a startup you do not have to be in the mainland. Why so? Primarily because you wouldn't actually start when you are at the startup stage, the infancy stage. What you need is an entity or a form which can actually help you to start contracting, sign up MOUs depending on your agreements, your investment agreements, etc., for which you need to have a legal entity.

Now quite obvious for startups, the major issue is cash and capital. So, you don't want to blow up money in licensing. And unfortunately, while the ecosystem is very supportive, license also and real estate comes at a cost. So, what every founder needs to keep in mind is that one which is the most cost-effective structure, undoubtedly, because let's not forget that there's an operational aspect, but at the same time, you cannot jeopardize your entire base so the foundation has to be strong.

So what you could get is especially because of the umpteen number of free zones that’s there depending on your line or service of business. One could look at freezone, which gives you 100 percentage ownership. Of course, in the recent amendments a lot of mainland companies and activities have also been allowed 100% percentage ownership. But till you are in a state where you are actually looking to do business in the mainland one could rely on a cost-effective option like a Freezone. That also helps you provide residency like if, for example Shafeekh in your case, if most of the founders would want to come in, live, reside, employ people. So you need to have an entity which can take care of not only your residency requirement but also your family’s residency requirement, your employees’ as well.

Because there's an entire you yourself with these employees joining hands is becoming a larger family, isn't it? So that is a second aspect to be looked at. With corporate taxes coming in, I don't want to scare and digress the entire topic, but that's something which I get asked. And just today I read about, I read an article which talks about startups being given a lot of exemptions.

That's a huge relief, especially for all the startups out there and I’ve been in on and off calls with the startups that I mentor where they've been asking me the same questions like, you know, because all of them have already started coming into revenue and a 9% corporate tax is going to get affected. So that's a relief for startups, I would say.

And the last part Shafeekh which you raised was with regards to ADGM, Abu Dhabi Global Market, of course has got very interesting propositions or solutions and especially one of the most cost effective one could be the special purpose vehicle, but what one needs to keep in mind is that if you are really looking at having a just an entity or a holding company, the SPV regime really looks and is very favorable.

But if you intend to actually create your business and have an operating company eventually to start selling your product or your application, and you wish to have a subscription arrangement then I wouldn't think ADGM works out quite well. You might want to still look at a free zone where the concerned free zone gives you an appropriate license to carry out such activity so that at this stage of incorporation or when you start off the startup journey, you don't end up having too much of a cost that you incur a waiver.

One very, very important aspect, and which is what I liked when you touched upon the investors. Many times, you wish to have multiple classes of shares, people Founders talk about very fancy safe nodes. You know, there are different arrangements that you wish to provide and factor in but Free zones may not necessarily be geared up to provide such a solution.

And so you may want to look at a common law jurisdiction like a DIFC or an ADGM or slightly more robust free zones where the regulatory framework is supportive.


Okay. That's how we get that's something interesting that I am not quite aware of, of how the structure works, because I did a mistake. I went and registered in Delaware first and then figured.


Call it an experience, Shafeekh. We’re all learning.


Yeah, it's all learning. Yes. So then I have been like I have in my previous role, I have registered a company in Cayman. So I'm like quite, quite confused. Like how do you prefer like a company from the Middle East? You know what's the best SPV vehicle that you can go for? Is it like Cayman or is it BVI or is it ADGM?


Since I think the ADGM structure is very well flourishing now in order to match the startup requirement’s legal structure.


So I would break it into two parts, Shafeekh and that’s very important for every founder to keep in mind. What you need to look at is ultimately One your operations. Two, very importantly your IP because today it may not look very important, but ultimately you need to structure your IP quite well. So a BVI, Cayman and all of those offshore jurisdictions erstwhile I would say were a very good solution as a holding company regime. Even today you can look at that as a holding company structure but eventually you still need to have a local entity available wherever you wish to have your business of operations.

So you might be targeting DCC, but you still need to have your licensed entity somewhere. You need to hold your IP with regards to ownership of IP, BVI, Cayman or any of those jurisdictions that you could think of, which is offshore, is no longer an option at all, primarily because there are economic substance regulations which have been brought in.

So, you IP has to be structured very well. The second part of the see. Sorry. Were you gonna ask me something.


No, no, I'm just listening.


Sorry, yeah. So the second part of it is to say that if in case you're actually doing operations in UAE, then you might as well have a domestic structure which gives you the flexibility and a regulatory framework which is required and which is a common law framework, which is what majority of expats, especially in this part of the region, prefers.

So you and me as expats, we would want to be governed by the common law principles. And that's where, like you said in ADGM, is and the holding company regime or the SPV regime is working very beautifully, it's cost effective, it's common law principles. ADGM has a separate code that governs. So for an expat or somebody who's coming in, they've started to realize that it makes more sense to have a holding company, which gives them a lot of flexibility at this stage and also the protection that they want.

And also very, very importantly, especially in this part of the region, which people do not keep in mind or factor in when they set it up like they came in which you did UAE to accept or any authorities except DIFC and ADGM to accept a foreign company jurist document those entire documents have to be legalized and legalization has a very additional cost.

That's the same case for even bank accounts. You can't open an account and what joy is in having a company if your account cannot be opened and for you to have an account open if you have to go through a legalization, which costs you around 5000, $6,000, that's going to create a deep, deep hole in your pocket. So that's another aspect that founders need to keep in mind.

So I personally believe that the charm BVI and Cayman or Delaware or any other jurisdiction for that matter, had in the past is slowly decreasing. Now it's a homecoming, the way we call it. We're given a choice. You would like to create an entity or a holding company along with your operating company, which helps you create substance and also lesser cost, lesser footprints globally, unless there is a need for you to do so.


Okay. That's quite interesting, I think, because recently a lot of companies are putting up based in ADGM, which is, which is like in SPV like some of the VCs I spoke there, told me that, you know, you go and register in ADGM your SPV company that's going to help you. But how like flexibility is in terms of governance, how flexibility in terms of cost or legal cost of, you know, managing the convertible notes or or, you know, any other challenges that that come across.


So ADGM as a jurisdiction, the basic principles are common law principles. Setting up incorporation is I wouldn't say a hassle but the regulatory the regulator is quite keen on ensuring that the compliance, the AML requirements, the KYC, the onboarding process is robust. So they could be certain I would see a scrutiny which goes through for every application and hence they could result in time delays but compared to a lot of jurisdictions, I would think cost-wise ADGM might be slightly more expensive if you were especially comparing it to a BVI or Cayman. And so that's as far as cost is concerned, however, but that's also the brand that you have is into doing nothing is cheap. So you could just allocate that to a mature jurisdiction and a reputed jurisdiction like ADGM, which of course attributes to the cost.

The second part is governance. Again, there aren't too many statutory compliances to be met with, but gone are those days because when I got into this industry, we hardly had any filings, license renewals and we never used to even see the shareholder or director. But now the times have changed. You have your ESRs reporting to be done that are across different jurisdictions.

You have your view declarations. So it's it's growing. And I would like to believe accounts have to be maintained and from the second year onwards, ADGM, SPVs have to file their annual accounts. So these are certain basic requirements of compliances to be made and met with. So that's the second part.

And the third part with regards to how easy it is to convert any form of share transfer, any conversions of corporate matters. You have a very robust professional network that is handling these matters for founders. So yes, we regularly get clients who come in and ask us for such support or services and we do provide that services and that's across all the service providers in ADP and of course cost. It would be a bit difficult for me to generalize because every provider would have their respective costs and the bigger law firms would of course have a brand cost attributed.

Yes, yes. And also, I think it depends on the companies, right? Like if it's if it's a fintech, they might prefer to go to DIFC to try it out. So this could be like depends on the company, what kind of what nature of business they have. And I think they also have certain structures based on the type of the company.


Right. Like, like I've seen this some of the fintech companies need to file the AML complaints and they need to have an authorized finance officer. What do you see like this, is it like across all companies, or is it like only for fintech companies and.


So regulated entities, I would just touch upon not rather than directly jumping onto your question. Regulated entities, of course, have an MLRO, your risk officer depending on whichever free zones. But on the other hand, fintech companies, see the whole idea, let's not forget is is to ensure that every company, be it fintech, your Hub 71 or any such platform which is encouraging the whole idea is to make sure that the entity is following certain basics which is required.

So these are checks and balances which are being put in place, which is in in the long run actually good for the company itself.


Okay, awesome. And and so I generally see like, you know, in other regions, especially if you look at Silicon Valley and Delaware, there are a lot of startup lawyers out there. But if in the Middle East, it's it's very less like, you know, those you find who understand a startup ecosystem is very less. Even though you could find like lot of incorporation companies set up platforms out there which are automating a lot of this task.

But at the end of the day, like any startups would like to go to a startup lawyer to, to understand the whole comprehensive structure of it. So they can get more of a personalized addresses, suggestions, How are you gonna like structure because I was not very sure of the IP part of it, which which you have mentioned, which I need to look into or in the long term then where where my IP is going to register, where it's going to get protected, where my trademark is kind of protected. These are the long term concerns which we don't look into now.

But this is something very interesting that, you know, whenever I come across the startup lawyers based in the Middle East, I will have a lot of questions regarding the structure, governance. And it's very interesting that last time when we met, I was like, yeah, let's, let's go ahead. What's the best way? Because I have been getting a lot of addresses from a lot of people, like go register here, go register here, I would be like, you know, trying to figure out where should I exactly register my company last last five months.

So I immediately like first time I came here, I registered in the US, which is fast. Then I figured out it has a lot of tax nuances down the lane. So which, which UAE is the best way to go for that in order to have a setup here locally that is the best feasible way. Yeah. But I still have like, I got some time to figure out since I had a company registered initially.

So this is something interesting like how do you see the startup ecosystem here in the Middle East? How, how like the governance structure in the future? how it's going to look like in the future? because especially like some of the you know, if you look at the US itself, like the governance is a big question when they go for later stage because Middle East is still in an early stage for for startups but the mature or flourished ecosystem have the governance in place when they scale.

And we have seen some of the cases like Uber when it went for IPO, it was down because of a lot of governance issues. So no, no, even look at FTX. So how do you see that like the UAE or Middle East are especially evolving in terms of structures?


So to a couple of points that you touched upon Shafeekh and it's very interesting because as a lawyer who advises startups myself and I've been doing this for the last 15 odd years, it’s just that the startups weren’t at that point of time, called it had this fancy term of startup. It was a business that you had an idea about. You decided to set it up along with somebody, somebody like minded.

So as the terminology has been growing and becoming very prominent, so is the ecosystem. So I would think it's not fair to compare the UAE to the US to an extent because it's a relatively newer economy. Let's not forget that. But I take great pride to see that the way this country has grown and generated the number of startups and you see the success stories of Kitopi.

So of course you got your FTX and other places. But if you look at Kitopi, you look at Careem, you look at any of those top startups, these are all success stories which have happened here. Yes, it is. So the first part of your question was, do you see too many lawyers? See there’s always We are like those honey bees where we smell honey and

the lawyers will start coming in. So I think there is a slow change right now. There are, for example, DR partners itself. Previously I used to work for underrepresented firms, which you just touch upon one aspect of it. But today you have specialized firms that take care of every aspect. So DR partners, like if I was to talk about myself, I get involved right from the onset stage wherein When I am through this journey, I'm trying to walk through this entire journey, and handhold the founders to make sure that their governance, corporate administration, all of those aspects are taken care of and ended up umpteen number of providers like myself, right from a bigger brand to across whatever is the appetite of a clientele. And so there are professionals and it's growing and trust me, I can see the number of firms that's mushrooming.

So this professional support system, it's going to get more and more sophisticated and polished. And they would be providers to guide you and advisors. There will not be any shortage. So that's that's the first part of it. Secondly, how does this come out? Like for me, it's quite positive myself. There is an access to capital. Yes, of course. There are times when access to capital also becomes very difficult because everybody who is taking a plane into Dubai, just feels everybody sitting in a gold mine and they're just giving away cash.

It doesn't work that way. But still there is a willingness to try out or private equity investments. There is a willingness to make investments, look at alternative modes. So that's another positive aspect. If you look at Abu Dhabi, Dubai, it's a healthy competition, the number of incubators coming up, the number of accelerators coming up. And I know this because I have been personally involved in advising set ups.

And you did mention about VCs being set up in ADGM. Why so? Because the regulators have provided for an easy and a relatively quicker or a slightly more flexible VC fund regime. So it's mushrooming and these are all incubators and accelerators coming in and VCs coming in because there are huge startup opportunities and deal flows that they see.

So I think overall it's quite positive and I don't think there's going to be a shortage of professional advisors. You just need to engage us.


What would be your advice for a founder who is coming here like, you know, in terms of like setting up the governance structure, how do you see like at least in the top three things that you need to take care of in order to make sure that you know that your governance is not not flown down the lane.


Okay. Okay. So I think the first and foremost is the right foundation. Like I said, yes, I emphasise on several aspects, cost being one, but doesn't mean that you do a stopgap arrangement when you read up so much about several aspects like your example, you I think I heard you say that you set up a Delaware structure because quite obvious it's not about speaking to anybody and everybody.

There are professionals. It's like you go to a specialist doctor because the doctor, of course, has got those many years of experience. So the foundation has to be set strong. That's important. How do you set your foundation? It's your license, the entity type where you get your license done. That's very important because from their experience, these advisors can tell you what could be and should be done for a startup.

That's the first part of it. That's the incorporation state. The second state is the governance, quite obvious. You need the whole idea of trying to create again independent advisors. And that's another aspect that I look into is where we try and help these founders connect with strategic advisors. It could be founders of companies who’ve exited. They've done multiple exits, come through money.

They have actually gone through that entire journey. So try and seek. So I wouldn't say it's always professional advice right away after your incorporation because you have to control and make sure your costs are taken care of. But certain basics which need to be done. There are a lot of firms that are providing such services. If it means even regular meetings, ensuring your books of accounts are maintained, it could be a simple ledger or an Excel sheet, which is with regards to account, or even if it means administration. Try to document it and keep it in place.

That's very much required. And you do not. I always see no stopgap arrangements coming in. Well, the founders are quite desperate to get the money to get a commitment. You know, there's just cash taken into the individual account and there's one company. It's going to be difficult going forward. So take it easy. You need to encash the opportunity, but just do not try and do a bandage arrangement.

Then it's like you know, the blasters would start coming off. That's not good. 


Awesome, cool. So I think it's very interesting session about Devika explaining the process and fundamentals of governance structure here in UAE. And I wish all the best. I think we are running out of time now. We just have 5 minutes left.


But thank you so much Shafeekh. It was it was really nice to be a part of this discussion. Happy to be engaged and happy to guide and mentor. It's a journey. And I wish every founder who is an audience to this podcast all the very best. May your venture and including Finanshels be a huge success.

Good luck.


Thank you. Thanks a lot. Bye bye.


Take care. Bye bye.