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As the world shifts to digital solutions, the finance sector has undergone significant revolutions, one being the rise of digital currencies. The cryptocurrency industry is gaining popularity worldwide. This trend is also evident in the advanced landscape of the UAE. In fact, revenue in the UAE’s crypto sector is projected to grow by 7.89% annually, reaching $395.8 million by 2028. Factors such as high internet penetration, a tech-savvy population, and the government’s commitment to digitization make Dubai an ideal location for setting up a crypto business. Therefore, obtaining a crypto license in Dubai has become highly sought after for many foreign entrepreneurs.
However, to navigate the industry smoothly, it is essential to have a fundamental understanding of the crypto business setup in Dubai, including its regulations, licenses, processes, requirements, and the intricacies involved. This comprehensive guide by DUBIZ will guide you through it all. Without further delay, let us begin by first understanding what cryptocurrency means.
Cryptocurrency, shortly known as crypto, is a digital form of money that can be used over the internet to facilitate trading, investment, and other such transactions. In simple terms, crypto is a digital alternative to the money that is issued by the government or central authorities and eliminates the need for an intermediary like a bank.
It functions as a safe and secure peer-to-peer medium of exchange that allows individuals to send and receive payment firm anywhere. It uses a secure blockchain technology to track transactions, similar to a bank’s ledger. Some well-known cryptocurrencies include Bitcoin, Ethereum, Tether, and Solana.
The cryptocurrency industry is experiencing tremendous growth globally, with Dubai emerging as a key player. New businesses are entering the market and reaping significant profits. If you are planning to start a business in Dubai related to cryptocurrency, obtaining a crypto license in Dubai will be your first concern to operate legally. This license permits you to engage in various cryptocurrency trading activities in the city, issue digital currencies, conduct exchanges, manage crypto assets, and operate brokerage services.
Some of the cryptocurrency business ideas you can pursue in Dubai include:
Keep in mind that each cryptocurrency-related activity may require specific license and permit. It is important to understand the regulatory framework for each one.
There are several types of crypto license in Dubai issued by various economic zones, including:
There are many advantages of obtaining a crypto license in Dubai, including:
You can get the license for crypto business in UAE from various free zones, including:
DWTC (Dubai World Trade Center) is a free zone focused on innovative sectors involving virtual assets, blockchain, and cryptocurrencies. It offers crypto trading licenses, distributed registry licenses, and allows for financial advisory services, management of crypto assets, and brokerage activities.
DMCC (Dubai Multi Commodities Centre) is a renowned free zone in Dubai that supports cryptocurrency-related businesses. With its licenses, businesses can offer a range of services including management, storage, trading, exchange, brokerage, and custody of cryptocurrencies. DMCC offers two main types of licenses: the crypto trading license and the distributed registry license.
DAFZA (Dubai Airport Free Zone Authority) is a leading free zone adjacent to Dubai International Airport that offers crypto license. It supports the commercial trading of cryptocurrency assets. Its flexible legislative environment facilitates smooth crypto operations.
DIFC (Dubai International Financial Centre), one of the leading free zones, offers various crypto business activities. These include setting up platforms for crypto trading in Dubai, providing secure storage for cryptocurrencies, offering custody services for digital assets, facilitating asset trading, and managing digital assets for clients.
IFZA (International Free Zone Authority), one of the major investment hubs in Dubai, actively supports cryptocurrency licenses. To obtain a license here, you must comply with the regulations and specifications set by the zone authority. With this license, you can engage in commercial activities involving crypto assets, including cryptocurrency transactions such as exchange and storage.
ADGM (Abu Dhabi Global Markets) is the world’s first zone to establish a comprehensive regulatory framework for crypto trading and related transactions. ADGM licenses enable the storage, buying, selling, and management of crypto assets and securities, including services for third parties, etc.
Note: Each zone has its own requirements, conditions, and opportunities linked to the cryptocurrency license. Contact DUBIZ business setup for complete guidance and to explore your options further.
You will need the following general documents to successfully obtain a crypto license in Dubai:
Note: Additional documents may be needed for your crypto business setup in Dubai depending on your business need and location. Our experts at DUBIZ business setup can help you identify the accurate documents.
Following steps should be followed to obtain a crypto license in Dubai:
The initial step is to determine the specific type of crypto business activities you intend to pursue. This may include offering services such as crypto wallet management, operating a cryptocurrency exchange platform, providing advisory and consultancy services, and more.
Next, you must decide whether you want to establish your company in Dubai mainland or in a free zone. Free zones offer benefits such as 100% ownership and full repatriation of profits. However, mainland companies have their own advantages and regulatory requirements. Therefore, your choice should depend on your business needs and objectives.
Then, you must decide on a name that will distinguish your company from others. The trade name must comply with UAE’s naming criteria. Additionally, you need to choose the legal structure for your business and register it with the relevant zone authorities.
You may need to lease physical office space depending on whether you are starting your business in a free zone or mainland.
You must open a business bank account for your crypto company to manage all financial operations. In Dubai, you have the option of both domestic and international banks.
To obtain your crypto license, you must take care of paperwork and keep it ready. This includes documents such as detailed business plan, proof of address, certificate of incorporation, identity documents for shareholders and directors, etc.
You must then fill out the license application form and submit it along with the necessary documents and fees with the relevant authority. This process may include interviews and background checks as well.
Operating your business in compliance with UAE regulations is essential. You must get approvals from and meet the regulations outlined by regulatory bodies like SCA (Securities and Commodities Authority), VARA (Virtual Assets Regulatory Authority), FSRA (Financial Services Regulatory Authority) and DFSA (Dubai Financial Services Authority).
Some crypto licenses may even require minimum capital. In that case, you must ensure funds meet regulatory guidelines. Also, companies are required to implement strong security and compliance, including AML and KYC procedures, to protect user data and assets.
Once you have submitted your application and met all the regulatory compliance requirements, the regulatory authority will review it. Upon approval, you will receive your cryptocurrency license.
You must meet certain conditions for starting and running a crypto company in Dubai, including:
Companies must employ modern encryption technology, multi-factor authentication, and other methods to prevent data leakage and unauthorized access.
Companies must have a straightforward policy for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) to minimize risks. They must register and identify customers by verifying identities, collecting documents such as identify proof, and doing proper background checks.
Regular audits and compliance reviews by regulatory agencies like VARA are conducted to ensure that companies adhere to all regulations and requirements. If issues are discovered, penalties such as fines, restrictions on activities, or even license revocation may be imposed.
Companies need to develop internal policies and procedures for handling transactions, managing risks, ensuring compliance, and training employees.
Companies must keep transparent records of financial reports, operational data, and other information, providing them to authorities upon request. This commitment ensures transparency of cryptocurrency transactions.
Key personnel and shareholders must maintain clear track records free of any financial crime history. They must undergo background checks to confirm this.
The total cost of crypto business setup in DWTC, Dubai, can range from AED 44,500* to AED 99,300*, including:
Cost of obtaining initial NOC from VARA can be around AED 50,000*
Please note that the costs are subject to changes and may also vary depending on the selected economic zone and type of crypto activity pursued. Furthermore, certain categories of Dubai crypto license may necessitate maintaining a minimum amount of capital in your business bank account.
Our DUBIZ experts can provide you with the exact costing details. Please reach out to them for more information.
You can unlock abundant opportunities in the thriving financial markets of Dubai if you dive into the crypto business. However, the process can be little complicated. You must take care of all the compliances and requirements diligently. Only then will you be able to obtain your crypto license in Dubai successfully. But you do not need to worry about the process when DUBIZ is by your side. From selecting the jurisdiction to ensuring regulatory compliance, obtaining the license, and completing the company registration in UAE, our experts will make everything easy for you.
With our personalized services for company formation Dubai, UAE, we cover your every business need.
Contact DUBIZ business setup today at +971 562986853 or WhatsApp us at +971 569973630. You can also drop an email at info@dubiz.co for any inquiries.
Crypto assets primarily face risks related to money laundering and financing of terrorism. Companies must follow UAE laws on anti-money laundering (AML) and combating financing of terrorism (CFT), ADGM guidelines, and principles like risk-based approach, KYC, and quality assurance systems (QAS).
If you trade cryptocurrency or receive it as salary, there is no federal income tax or corporate tax. However, Value Added Tax (VAT) is applicable at a rate of 5%.
You can obtain a crypto business license in UAE from various economic zones, including:
Yes, to legally conduct cryptocurrency trading, you must obtain a crypto license in Dubai.
Having a crypto license in Dubai brings several benefits. It offers access to a Dubai’s thriving market for digital currency and a leading hub for technological innovation. Along with that businesses can benefit from the city’s special tax incentives and supportive ecosystem for blockchain and crypto startups. Also, obtaining a crypto license in Dubai is cost-efficient compared to other commercial licenses, making it a lucrative option for budding entrepreneurs.
