The future of the evolving digital economy lies in diversifying money into digital assets, with the cryptocurrency business standing out as a notable venture. The UAE is emerging as a prominent platform for investors looking to establish their crypto license in Dubai. Various business zones within the country have already gained a reputation for conducting crypto-related activities. You can apply for a cryptocurrency license in Dubai, UAE in the following free zones: DMCC, DIFC, and through a representative office in the Dubai region.
Approved business activities encompass database management, self-proprietary investments in crypto assets, cryptocurrency consultancy, and data mining. However, it’s important to note that launching an ICO or registering a crypto exchange is only permissible if a competent authority regulates it.
This is an opportune moment to enter this forward-looking and lucrative industry by establishing your digital asset business in the UAE. For further information on this venture’s legalities and necessary approvals, you can consult with experts at Shuraa.
What is cryptocurrency?
Cryptocurrency, often referred to as “crypto,” is a form of digital or electronic currency that uses encryption to verify transactions and safeguard transactions.
Furthermore, cryptocurrencies operate without a centralised issuing or governing authority, Instead, it relies on a decentralised system to track transactions and create new units.
Moreover, cryptocurrencies operate without a centralised issuing or governing authority. Instead, they rely on a decentralised system to monitor transactions and generate new units. Additionally, it functions as a peer-to-peer mechanism, enabling individuals to conduct transactions and receive payments from anywhere. Cryptocurrency transactions exist solely as digital entries in an online database that identifies specific transactions, as opposed to being physical currency carried around and exchanged in the real world.
Several examples of cryptocurrencies include:
- Bitcoin
- Ethereum
- Solana
- Litecoin
- Ripple
Overview of Crypto Regulation in UAE
| Project time frames | 4 to 6 months |
| State fee for application | 25 000 USD |
| Required share capital | from 100 000 USD |
| Corporate income tax | 9% |
| Annual supervision fee | 50 000 USD |
| Local staff member | AML Officer & Director |
| Physical office | Required |
| Accounting audit | Required |
| Sustainability | Sustainable |
| Bank account options | Some European EMIs, Midshore EMIs |
Rising Popularity of Cryptocurrency Licensing in Dubai, UAE
Cryptocurrency licensing in Dubai, UAE, is increasingly popular; free zones facilitate trading, storage, and related activities. Moreover, the UAE’s blockchain strategy aims for 50% of government transactions to use blockchain, showcasing its commitment to future technologies. Major players like Binance, established in Dubai, position the city as a global hub for cryptocurrency exchanges, indicating the Emirates’ potential to lead regional services.
Types of cryptocurrency licenses available in Dubai
The Dubai Multi Commodities Centre (DMCC) free zone offers two distinct categories of crypto licenses tailored to different business activities:
DMCC Crypto License
- DMCC (Dubai Multi Commodities Center) offers a free economic zone for cryptocurrency businesses in the UAE.
- Two types of licenses are available: Cryptocurrency Trading and Distributed Registry License.
IFZA Crypto License
- The International Free Zone Authority (IFZA) in Fujairah supports cryptocurrency businesses.
- IFZA allows for commercial activities using crypto assets and transactions such as exchange and storage.
DAFZA Crypto License
- DAFZA (Dubai Airport Free Zone Authority) allows trading of cryptocurrencies and related services.
- It offers flexible legislative support and a regulatory framework for cryptocurrency trading.
ADGM Crypto License
- Abu Dhabi Global Markets (ADGM) is a financial free zone with comprehensive regulations for cryptocurrency transactions.
- ADGM’s license covers activities like cryptocurrency exchange, storage, buying, selling, and asset management.
DWTC Crypto License
- Dubai World Trade Center (DWTC) is a free zone catering to virtual assets and blockchain industries.
- It is working with the Virtual Asset Regulatory Authority (VARA) and has partnered with Binance to become a regional cryptocurrency hub.
- Each zone offers specific licensing options tailored to the needs of cryptocurrency businesses operating within the UAE.
Benefits of acquiring a Dubai Cryptocurrency License
Here are the positive implications of obtaining a cryptocurrency license in Dubai:
1. Differentiation
By acquiring a cryptocurrency license, you can distinguish your business in a market where Bitcoin, despite its popularity in the UAE, is utilized by only a handful of companies for payment transactions.
2. Cost-effectiveness
Compared to other commercial trade licenses in the UAE, obtaining a cryptocurrency license is relatively affordable, offering potentially higher returns on investment.
3. Enhanced Security
Leveraging cryptocurrency blockchain technology ensures a high level of security. With a bitcoin license in Dubai, you can uphold your anonymity, bolstering privacy and confidentiality.
4. Global Recognition
Cryptocurrencies enjoy widespread acknowledgment internationally. Transactions conducted through cryptocurrencies are characterized by swiftness and minimal downtime, contributing to operational efficiency.
5. No Minimum Investment Requirements
There are no minimum investment prerequisites, rendering the UAE appealing to budding and petite enterprises. This facilitates numerous entrepreneurs in initiating their ventures with negligible financial commitments, presenting them with a chance to flourish in a burgeoning market ripe with growth prospects.
Requirements for Establishing a Cryptocurrency Trading Business in UAE
To start a crypto business in the UAE, certain requirements must be met. Here are some of them:
- Companies must prioritize the security and protection of virtual assets and customer data, employing modern encryption technology, multifactor authentication, and measures to prevent unauthorized access.
- To obtain a crypto exchange license in Dubai, all founders must provide copies of their passports.
- Compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations necessitate conducting customer registration and identification procedures, which involve verifying customer identities, collecting relevant documents, and conducting criminal background checks.
- Accurate and timely reporting, including financial reports and operational data as required by the regulator, is essential for maintaining transparency and control over cryptocurrency transactions.
- Regular audits and compliance reviews by regulatory agencies like VARA are commonplace to ensure adherence to all requirements and regulations. Violations or deficiencies may result in fines, activity restrictions, or license revocation.
- Companies are required to have financial resources and funds available to cover operating expenses for six to twelve months.
Things to consider before you launch your crypto business in Dubai, UAE
Below are the pointers which will help you to take into consideration before launching your cryptocurrency Business in Dubai, UAE.
Regulatory Compliance
Ensure that all crypto-related ventures, including representative offices, data mining firms, and consultancies, comply with regulations set by VARA under the Dubai World Trade Centre (DWTC). Moreover, contact the regulatory authority to understand the legal framework for your cryptocurrency business in the Emirates.
DIFC Establishment Requirements
To establish a crypto business in the Dubai International Financial Centre (DIFC), the company must have at least 5 years of legal presence in the cryptocurrency domain in another country. Alternatively, consider incorporating a company through a representative office in Dubai, which may be a more feasible approach.
Exclusive Licensing from DMCC
The Dubai Multi Commodities Centre (DMCC) issues a unique self-proprietary cryptocurrency license, enabling investments in crypto assets. Furthermore, consult with Shuraa’s business experts to explore the possibility of launching your business in DMCC for cryptocurrency-related activities.
Data Mining Firm Setup
If you intend to open a data-mining firm for your crypto-related business in Dubai, you can apply for an IT company trading license. Additionally, if required, obtain additional consent for cryptocurrency business operations.
Cryptocurrency Consultancy Business
Entrepreneurs aspiring to establish a consultancy enterprise for cryptocurrency businesses in Dubai can do so. Contact the experts at Shuraa for assistance opening a bank account for your crypto consultancy business in Dubai.
These key considerations will help navigate the regulatory landscape and establish a successful cryptocurrency business in Dubai.
Advantages of Establishing a Cryptocurrency Business in Dubai
Below are the Advantages of Establishing a Cryptocurrency Business in Dubai:
Modern Appeal and Differentiation
Accepting cryptocurrencies for transactions positions your business as modern and forward-thinking. Moreover, this distinctive feature sets your venture apart from the competition, appealing to a broader audience and enhancing the attractiveness of your products and services.
Cost-Efficient Transactions
Transactions conducted via blockchain come with the significant advantage of no gateway or service charges. This results in a substantial reduction in a company’s transactional costs. Additionally, the absence of cross-border barriers facilitates seamless cryptocurrency transfers.
Decentralized Payment Mechanism
Blockchain serves as a decentralized payment mechanism, providing advanced encryption facilities. Additionally, this ensures secure cryptocurrency transactions from any location worldwide, maintaining consistent encryption standards. Furthermore, the decentralized nature adds an extra layer of security and reliability to your business transactions.
How to get a crypto license in Dubai
Following are the steps to obtain a cryptocurrency license in Dubai:
Step 1. Establishing Your Cryptocurrency Business in Dubai: Registration of Legal Entity and Business Naming
Initiating your cryptocurrency business in Dubai commences with registering a legal entity and selecting an appropriate business name. Furthermore, this involves pre-registering a legal entity within the region and opting for a distinctive name for your company.
If you encounter challenges in name selection and company formation, Shuraa Business Setup experts team stands ready to guide you through the process, ensuring compliance with registration prerequisites and governmental standards.
Step 2. Selecting a Jurisdiction and Assessing Licensing Criteria for a Cryptocurrency Business in Dubai
Following the registration of a legal entity and the selection of a business name for your cryptocurrency enterprise in the UAE, the next step involves choosing an appropriate jurisdiction and assessing the licensing prerequisites. Decide whether you wish to establish a representative office in a free zone or on the mainland. For obtaining a crypto license, it is advisable to consider the Dubai Multi Commodities Centre (DMCC) as a preferred free zone. Once the jurisdiction is determined, our team will assist you in obtaining a cryptocurrency license in the UAE.
Step 3. Commencement of the Corporate Bank Account Opening Process
Concurrently with the preceding step, it is imperative to initiate the opening of a corporate bank account and deposit the minimum authorized capital required for obtaining a cryptocurrency license in the UAE.
Step 4. Gather Required Documentation
As an integral part of the cryptocurrency business licensing procedure, your company must compile essential documents, including a business plan, financial plan, certified founder documents, AML/CFT policies, and any other documentation stipulated by the local regulatory authority. Moreover, the legal team at Shuraa is available to assist you in preparing a comprehensive set of documents to facilitate a favorable licensing decision.
Step 5. Acquiring a Cryptocurrency License in the UAE
Acquiring a cryptocurrency license in the UAE mandates adherence to the stipulations and processes set forth by regulatory bodies such as the Financial Services Regulatory Authority (FSRA), the Dubai Financial Services Authority (DFSA), and the Securities and Commodities Authority (SCA). Shuraa Business Setup stands prepared to offer assistance in preparing and fulfilling all essential procedures required to apply for a UAE crypto exchange license. We collaborate directly with the pertinent free zone authority or equivalent municipality should you opt for registration in another location.
Cryptocurrency Regulations and Risks in the UAE
Below are the Cryptocurrency regulations and Risks in the UAE:
Risks of Crypto assets:
1. Recognized Risks
- Financial laundering
- Sponsorship of terrorism
2. Compliance Requirements
- Develop corporate and customer-oriented rules based on UAE laws, ADGM guidelines, and FATF best practices.
- Ensure compliance with global risk mitigation and transparency standards.
3. Management Principles
- Conduct business risk analysis.
- Implement Quality Assurance Systems (QAS), Anti-Money Laundering (AML) measures, and system controls.
- Maintain control over management and enterprise systems.
- Mandatory reporting and record-keeping.
Regulations:
1. Regulatory Bodies
- Securities and Commodities Authority (SCA): Implements regulations for various cryptocurrency-related activities.
- UAE Central Bank: Regulates payment tokens (stable coins) and stored value funds.
- Financial Services Regulatory Authority (FSRA): Oversees ADGM operations, ensuring compliance with its own set of rules and guidelines.
2. Licensing
- SCA regulates crypto licenses issued by DAFZA.
- ADGM Free Zone adheres to SCA regulations, with the FSRA directly regulating ADGM operations.
3. Monitoring
Authorities monitor businesses offering cryptocurrency and blockchain services to prevent money laundering and illegal activities.
What is the Cost of a Crypto License in Dubai?
Investors who want to start their business in cryptocurrency must pay the minimum cost of a crypto license in Dubai, which ranges between AED 21,500* to AED 35,5000*. Additionally, the actual cost may vary depending on the applicable law and the chosen zone. For the exact costing, reach out to Shuraa Experts.
Where to get the cryptocurrency license in Dubai?
Prior to launching a cryptocurrency venture in the UAE, securing a cryptocurrency license is imperative. Presently, three free trade zones within the UAE facilitate the issuance of such licenses. These zones include:
1. Dubai Multi-Commodities Centre (DMCC)
- DMCC offers cryptocurrency licenses, ensuring business legitimacy.
- Allows various cryptocurrency-related activities such as trading, storage, development, and consultancy.
- Aims to become a leading hub for blockchain activities in Dubai.
2. Dubai Airport Free Zone Authority (DAFZA)
- DAFZA collaborates with the Securities Commodity Authority (SCA) to support cryptocurrency ventures.
- Facilitates cryptocurrency-related business activities for companies within its jurisdiction.
- Promotes international business interactions and aims for cryptocurrency adoption.
3. Abu Dhabi Global Market (ADGM)
- Regulates cryptocurrency assets through the Financial Services Regulatory Authority (FSRA).
- Provides a comprehensive regulatory framework for cryptocurrency licenses in the UAE.
- Offers guidelines for utilizing cryptocurrency licenses to enhance business operations nationwide.
Tax Implications for Cryptocurrency Businesses in the UAE
The UAE offers enticing tax advantages for cryptocurrency businesses:
- Zero Federal Income and Corporate Tax: Companies solely engaged in cryptocurrency trading or receiving it as salary enjoy a 0% tax rate.
- Value-Added Tax (VAT) Considerations: While federal taxes are nil, the introduction of a 5% VAT since 2018 applies to ordinary transactions. Your company may operate tax-exempt but could be subject to VAT for regular transactions.
For clarity on tax-exempt activities, Shuraa offers expert consultation services.
Start your cryptocurrency business in Dubai, UAE!
A crypto license in Dubai presents a golden opportunity for forward-thinking investors to explore lucrative ventures in the cutting-edge financial sector. Seize the moment and establish your cryptocurrency company in the Emirates with the support of Shuraa.
We provide comprehensive business assistance to ensure a seamless launch for our clients in the UAE. Collaborate with our professionals, who will handle all the complexities for you!
To learn about how to start a business in Dubai, book a free consultation with one of Shuraa’s corporate advisors, simply call at +971 44081900 or send a WhatsApp message to +971 507775554. You can also drop an email to [email protected]
