How to Start Forex Trading Company in Dubai

Many entrepreneurs wonder: “Is forex trading in UAE legal?” It absolutely is. By starting a forex trading company in Dubai, you can buy, sell, and exchange multiple currencies in the foreign exchange market.

Forex is the most lucrative and active financial market with average trading volume of $9.6 trillion per day! Why Dubai? Because it offers tax-free profits, advanced infrastructure, and the most secure trading environment. To start forex trading business, however, you will need to hold a valid trade license issued by Dubai’s licensing authorities, such as DFSA and SCA.

Quick overview:

• Individuals and companies (institutions) do forex trading in Dubai.
• Corporate traders need to get forex trading license.
• Retail trading (individual level) can be done only through licensed brokers.
• Cost of license may start from AED 70,000*.
• Sector is regulated by SCA, DFSA, and the Central Bank of the UAE.

In this guide, is has been thoroughly explained how to start forex trading in Dubai. You will understand the full legal setup process, types of licenses available, and costs to start foreign exchange trading in Dubai, UAE.

What Encompasses Forex Trading in Dubai?

Forex trading is the process of buying and selling of currency pairs. You convert one currency into another either to make a profit or because you need a specific currency.

Let’s take a simple example of a currency pair: AED/USD. In this pair, AED (UAE Dirham) is the base currency, and USD (US Dollar) is the quote currency. Every currency pair has an exchange rate. Similarly, AED/USD = 0.27, which means you need 0.27 USD to buy 1 AED.

Dubai offers a safe, well-regulated, and global base for forex trading. Forex trading is a favoured source of income for many here. Both mainland and free zones (trending: DIFC) in Dubai provide licenses to forex trading businesses.

According to figures released by the Department of Economy and Tourism (DET), the growth rate of forex trading is 6.2% in the UAE, which is the highest in the MENA region. Therefore, this is the best time for forex trading in Dubai.

Where are the Foreign Currencies Traded?

Foreign currencies are traded in the Forex (foreign exchange) market, which is a globally connected, decentralised over-the-counter (OTC) marketplace. Trading takes place through various online platforms and venues, including those in Dubai, Abu Dhabi, and across the UAE.

The forex market operates 24 hours a day, allowing traders to buy and sell currencies at any hour. The market stays operational 5 days a week and is closed on weekends. As someone interested in the forex trading business, you must be aware of these timings.

Who can Conduct Forex Trading in Dubai?

Individuals (UAE nationals and expatriates), as well as companies and financial institutions, can do forex trading in Dubai:

• Individual traders: Forex trading in UAE can be done as an individual, where you manage your own funds. It is called retail trading. However, under the forex laws in the UAE, you must trade through a registered and licensed broker (examples include Pepperstone, IG, AlgoBi, Equiti, etc.).
• Forex trading companies: A forex company in Dubai offers brokerage and trading services to forex investors and traders. Such companies hold licenses and are legally authoritised to deal in forex transactions.

Type of License to Start a Forex Trading Company

If you are trading your own funds as an individual, then you do not require a license. However, if you are running a forex trading company in Dubai (thus, trading for clients), then you must hold an appropriate license.

Dubiz can assist with securing the right type of forex trading license for your business:

Mainland License (SCA):

On the Dubai mainland, the Securities and Commodities Authority (SCA) is the main licensing authority for forex trading companies. Operations are also overseen by the Central Bank of the UAE. This is the most flexible and comprehensive forex trading license in Dubai.

DMCC License (Category 3):

The Dubai Multi Commodities Centre (DMCC) offers a forex trading license. This is a professional license for companies that aim to trade their own funds in FX, OTC products, and exchange-traded derivatives on regulated exchanges. They cannot handle other people’s money.

DIFC License (Category 3A):

You can apply for a Category 3A License (also known as a brokerage license) in the Dubai International Financial Centre (DIFC) Free Zone. With this license, you can manage other people’s funds in forex transactions. Additionally, you can also trade in commodities and derivatives. The Dubai Financial Services Authority (DFSA) supervises and regulates DIFC entities.

ADGM license:

If you are open to options outside Dubai, the ADGM Free Zone is also a strong choice for starting a forex trading company in UAE. It is located in Abu Dhabi. Forex activities in ADGM are regulated by the Financial Services Regulatory Authority (FSRA).

Calculate Cost

DIFC vs DMCC Forex Trading License Features

Here’s a quick comparison between the two popular free zone choices in Dubai.

Cost of a Forex Trading License in Dubai

The average forex trading license cost in Dubai starts from AED 70,000*. However, this can vary.

Every entrepreneur has different requirements, such as the type of visa required, business location, scale of operations, regulatory approvals, and how quickly they want to get started.

To make this clearer, we have designed a simple cost calculator that helps you estimate your exact business setup cost. It takes 5 minutes, and it’s completely free.

Cost Calculator

Requirements for a Forex Trading License in Dubai

As a company, you will need a bunch of documents to start forex trading in Dubai, including:

• Applicant’s passport copy
• Visa copy
• Trade name document
• Your business plan
• Evidence of capital adequacy
• Resumes of all key people, outlining their qualifications and experience
• Financial forecasts for the following three years
• Your operational plans, including those for risk management and client onboarding
• Initial approval certificate
• Additional approvals, if needed
• AML/KYC procedures
• Office address proof

Please note that additional documents may be required depending on your business activities and licensing jurisdiction. Documentation can often be time-consuming, and entrepreneurs usually prefer not to spend their time after it. Having your documents prepared and cleared by experienced documentation experts ensures greater efficiency and cost savings.

Steps for Starting a Forex Trading Company in Dubai

Dubiz business setup consultants in Dubai can help you start forex trading company within a few days.

Follow these steps to start forex trading company in Dubai and to get a forex trading license:

Step 1: Start with market research

Before you start forex trading in Dubai, it is crucial to thoroughly understand the market dynamics. You should be aware of the Dubai forex market’s pros, cons, and associated risks. Understand what your competitors do and who their clients are.

Online research can provide ample information. You can also connect with well-established brokers to gain insights into current forex trading trends.

Step 2: Know your purpose

Following your research, it is important to define your goals for forex trading. Design a plan of action and estimate the timeline required to achieve it. Decide whether you will trade using your own funds or handle client money.

Consider what kind of services, such as consultancy, account handling, or exchange platform services, you plan to provide. Always have clear goals before starting a forex trading company in Dubai.

Attention: If you are new to trading, it is advisable to begin with basic strategies and a small investment.

Step 3: Choose your business jurisdiction

You must decide whether to start your forex business in the Dubai mainland or in a free zone. Each option has its own requirements, business scope, regulatory authority, and advantages. Popular free zones among entrepreneurs include the Dubai Multi Commodities Centre (DMCC) and the Dubai International Financial Centre (DIFC).

Step 4: Register legal entity and trade name

You can start an LLC, branch, or another form of legal entity. Choose a suitable name for your company that complies with naming rules and aligns with your business activities.

Step 5: Choose office space

Select an appropriate office space for your company. It should have good infrastructure, meet safety standards, be spacious, and allow secure storage of sensitive information.

Step 6: Apply for the initial approval

Get the initial approval from regulators after submitting your passport copies, business plan, proof of capital, and financial forecasts. If you pass eligibility, you can move further with the process.

Step 7: Select a broker

If you would be trading through 3rd party platform, then partnering with a trustworthy forex broker in Dubai is vital when establishing a forex trading company. Ensure the chosen broker is legally affiliated with a government authority. Conduct thorough research, as the UAE government takes strict action against fraudulent brokers.

Tips to choose a suitable forex broker in Dubai:

• Choose a forex broker licensed and regulated by a reputable authority in the UAE, such as the Securities and Commodities Authority (SCA).
• Determine whether the broker operates as a market maker or uses an ECN (electronic communication network).
• Check the broker’s leverage and margin policies.
• Ensure the broker offers a free demo account for evaluation.
• For beginners, the broker should provide comprehensive study materials and relevant information.

If you are planning to provide your own trading platform, a broker would not be required. However, the platform must be approved by the SCA.

Step 8: Apply for the forex trading license

Finally, apply for the forex trading license and complete the necessary paperwork to start forex trading in UAE. You will need to apply with the SCA in the case of mainland, or with the DFSA or DMCC, depending on where you choose to obtain your license.

After submitting your application and meeting all requirements, the authority will review it. If approved, you will be granted a forex trading license. The license is issued only if the authority determines that you are capable of operating a forex trading company.

Step 9: Open a corporate bank account

Set up a corporate bank account in the UAE bank to manage all transactions and finances of your business. UAE banks allow you to open multi-currency accounts, which makes forex trading easier. If you are handling clients, you may also need to open separate client accounts.

Step 10: Set up trading technology

Install the necessary trading software for your operations. The trading software should be approved by the relevant authority. You must also implement systems for risk management, trade monitoring, CRM, data security and backups, and cybersecurity.

Step 11: Staff planning

Hiring qualified staff is essential, as forex trading requires expertise and knowledge. Professionals such as a risk manager, software operators, operations staff, and licensed forex dealers, may be required.

Step 12: Start trading with your forex account

Once you have secured your license, you can legally start forex trading in Dubai. Devise a solid trading plan and follow it consistently. With dedication and disciplined execution, you can work toward achieving stable returns.

Step 13: Ongoing compliance

Forex trading companies must follow these regulatory requirements in Dubai:

• Anti-money laundering (AML) procedures
• Know your customers (KYC) documentation
• Internal audits
• Monthly reporting to authorities
• Risk management systems
• License renewals on time
• Corporate tax registration

How Much Tax on Forex Trading in Dubai?

Forex trading in Dubai offers significant tax advantages:

• Personal income tax: 0%
• Corporate tax for forex trading companies: 9% only on the income exceeding AED 375,000
• Capital gains tax: 0%
• Withholding tax: generally, 0% on cross-border payments

Trading profits in Dubai are usually tax-free for individual traders. However, tax policies are subject to changes by the FTA. Our tax consultants in Dubai can assist you further.

Advantages of Forex Trading in Dubai

Forex trading in Dubai offers many benefits, including:

1. Flexible trading: A significant advantage of operating a foreign trading company is its flexibility, allowing business operations from anywhere, anytime. You just need a laptop or mobile device and a reliable internet connection. Even during economic downturns or bearish market conditions, traders can still profit.
2. Tax benefits: Establishing a forex company in Dubai can lead to significant cost savings due to its favourable tax policies (0% personal and corporate tax), enabling extra revenue for business expansion.
3. Thriving forex market: The global forex market is projected to reach US$1,466 billion by 2032, with Dubai, UAE, being a favoured destination for foreign investors and entrepreneurs in forex trading.
4. Safe and secure environment: The forex market in Dubai operates under strong governance from SCA, DFSA, and FSRA, which ensures a safe and regulated trading environment.
5. Top-notch financial infrastructure: Dubai offers world-class connectivity and digital infrastructure for online trading platforms. You can enjoy fast and uninterrupted forex trading.

How to Start Forex Trading in Dubai for Beginners

Let’s say you are a forex enthusiast who wants to start trading at an individual level in Dubai. Even if you are a complete beginner, Dubai offers a nurturing platform where you can gradually turn your forex trading skills into a full-time, revenue-generating business.

The process explains how to start forex trading in Dubai as a beginner:

1. Ensure a UAE residency visa: To live in the UAE, you will need a visa, which can be an investor visa, an employment visa, or a golden visa.
2. Find a trusted forex broker: Forex trading in UAE can be done only through licensed brokers. There are many good names like Pepperstone, IG, AlgoBi, Equitti.
3. Open a forex trading account with a broker: To transact in the forex market, you will need a demat account registered with a broker.
4. Open a UAE bank account: Payments and receipts of currency are possible through a local bank account.
5. Arrange living accommodation: You can choose an apartment, a studio, or a villa, based on your budget and needs. Some popular areas of residency include Business Bay, Dubai Marina, and Downtown Dubai.
6. Learn about forex through courses: Build you skills of trading currencies. Courses are offered by fxcareers, Zabeel institute, Trust institute, and many renowned institutions.
7. Network with forex professionals: Participate in local trade events, networking exhibitions, and online through platforms like LinkedIn.
8. Understand the cost of living in Dubai: General expenses include utility bills, transport expenses, food, and groceries. That can be around AED 4,000* to AED 6,000* for a single person.
9. Sponsor family members, if required: You can invite your spouse, children, and parents to live with you in Dubai.
10. Turn forex skills into a business with Dubiz!

Start Your Forex Trading Company with Dubiz

Dubai, as a leading financial hub, offers immense opportunities for those aspiring to launch their forex trading company. If you are considering starting your journey in Dubai’s thriving forex markets, you have come to the right place. Our team of experts with over 8 years of experience have helped more than 7000 firms establish in the UAE. They can assist you every step of the way, whether it is your trade license, your bank account, company registration in UAE or uae residency visas.

Start forex trading in UAE today!

📞 Call: +971 56 369 5485

💬 WhatsApp: +971563695485

📧 Email: info@dubiz.co

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