Getting a crypto license
If you want to start a profitable venture in Dubai, a crypto license can offer you a competitive edge. There are many business zones where you can conduct crypto-related activities, such as DMCC, DIFC, etc. Certain activities are approved through licenses, such as data mining, cryptocurrency consultancy, investment in crypto assets, and database management.
You can launch an ICO or register a crypto exchange only when a UAE authority regulates it.
Entrepreneurs and investors can step toward a future business through this digital assets business in Dubai. Prospr will offer you the ultimate guide for getting a crypto license in Dubai.
Why is the crypto license gaining popularity in Dubai?
The UAE government consistently implements a forward-thinking strategy. Freezone has favorable policies and strategies for people wanting to trade, store, or perform other crypto-related business activities. The most amazing thing for investors is the UAE blockchain strategy, where more than 40 percent of government transactions use blockchain. Binance is already established in Dubai, so it will be effortless for you to do a global exchange of cryptocurrencies.
Types of Cryptocurrency Licenses Dubai
You can get a license in Dubai from different free zones. Here are some options.
You can get two types of crypto licenses from DMCC (Dubai Multi Commodities Center): cryptocurrency trading and distributed registry license.
You can do commercial activities related to cryptocurrencies, such as exchanging and storing them, in the International Free Zone Authority (IFZA) in Fujairah.
You can trade cryptocurrencies alongside other activities in DAFZA (Dubai Airport Free Zone Authority). There is a proper regulatory framework, and you can expect government support for your crypto business in the UAE.
Another free zone whose crypto license allows you to do exchange, storage, trade, and asset management can be obtained from Abu Dhabi Global Markets (ADGM). This free zone has comprehensive regulations to follow.
If you want to trade in virtual assets or blockchain, you can get a license from Dubai World Trade Center (DWTC). This free zone works alongside the Virtual Asset Regulatory Authority (VARA).
Advantages of getting a Dubai Crypto license
Here are some benefits of getting a crypto license in Dubai:
- Distinction: Many companies are accepting cryptocurrency for their payment transactions. You can distinguish yourself by offering Bitcoin to your clients.
- Cost-effectiveness: Commercial trade licenses are expensive in the UAE, but cryptocurrency licenses are comparatively more affordable. You can start a cryptocurrency business in Dubai at a low cost.
- Security: If you want to run your business with privacy and confidentiality, a Bitcoin license in Dubai can offer you a competitive edge. You can experience top-level security for your business.
- Global recognition: A cryptocurrency license can help you achieve operational efficiency in Dubai. Bitcoin is accepted internationally, so your business will experience minimal downtime and swift transactions.
- No minimum investment requirements: Another benefit of starting a cryptocurrency business in Dubai is that you don’t have to keep any minimum investment. The UAE imposes no such restriction on your business. As a result, British entrepreneurs can quickly kickstart their ventures with low investment and flourish in this booming market of Dubai.
What are the main requirements to start a cryptocurrency trading business in the UAE?
Here are some basic requirements you need to fulfill for setting up a crypto business in Dubai:
- Whenever you register a customer, it’s vital to stay compliant with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations. This means collecting relevant documents to verify customer identification and performing criminal background checks.
- Copies of the passports of all shareholders, partners, and founders are required.
- A company must employ modern encryption technologies to safeguard virtual assets and customer data. This means utilizing multi-factor authentication and other advanced security tools to avoid unauthorized access to your business.
- The UAE government requires you to stay transparent. Thereby, you need to provide them with financial and operational reports to the regulators, who can take an insight into your business and know what’s happening.
- Every cryptocurrency company must have the financial resources and means to cover six to twelve months of operational expenses.
What must you know before starting your cryptocurrency business in the UAE?
Here are some aspects of business that you need to be familiar with before you start the process of company setup in Dubai.
Regulatory Compliance
Before getting a crypto license in Dubai, you must have a complete idea about regulatory authorities and rules to set up consultancy businesses, data mining firms, and other aspects of business. As an expat, you may have little or no idea about this specific business, so Prospr comes to help you. Our business consultants can answer all your queries and concerns and help you understand regulatory compliance, especially the regulations set by VARA.
DIFC establishment requirements
If you plan to start your business in DIFC, you must have a 5-year legal presence in the industry in another country. You need to form a company through a representative office in Dubai.
Exclusive licensing from DMCC
DMCC offers a unique self-proprietary crypto license. Once you have this license, it is easy to invest in crypto assets. You can consult Prospr’s business consultant to understand how to launch a business and get involved in other cryptocurrency-related activities.
Data mining Firm
If you plan to start a data mining firm, skip the crypto license and get an IT company business license in Dubai. However, you may need to seek additional approval from the authorities.
Cryptocurrency consultancy business
Residents of Dubai are super interested in the crypto business. So, if you start a consultancy business, you may seek growth quickly.
How to get a crypto license in Dubai
Here is a step-by-step guide you need to follow to get a cryptocurrency business license in UAE:
Step 1. Registration
The first step to starting your crypto business in Dubai is to register your legal entity. You need to pick an appropriate business name and reserve your trade name.
You may find it difficult to understand the prerequisites for a business setup in Dubai, so Prospr’s consultants are here to help.
Must read; How to get trade license without office
Step 2. Select a jurisdiction
We have explained a list of different free zones in Dubai. You must pick a free zone where your trade activities are permissible. Every Free zone has specific guidelines you need to follow.
Also check: How to get food license in Dubai
Step 3. Commencement of the corporate bank account
You must deposit the minimum authorized capital required to get a crypto license in the UAE and open a bank account to continue making financial transactions.
Step 4. Collect document
Before you acquire a business license, you need to gather all the documents, such as a business plan, financial plan, AML/CFT policies, and business name certificate.
Step 5. Get a cryptocurrency license
UAE has specific regulatory bodies, such as the Financial Services Regulatory Authority (FSRA), the Dubai Financial Services Authority (DFSA), and the Securities and Commodities Authority (SCA). These regulatory bodies set rules for getting a license. Follow the regulations and acquire a license.
What is the cost of a crypto license in Dubai?
The exact cost of setting up a cryptocurrency business will depend on the jurisdiction and applicable law. However, you can spend AED 21500 to AED 35000 to get a crypto business license in Dubai.
What are tax implications on cryptocurrency businesses?
Many entrepreneurs will start a cryptocurrency business in the UAE because of its favorable taxation rates. There is zero federal income and corporate tax. If you are only involved in cryptocurrency trading, the tax rate will be 0%. Regarding Value-added tax, your company needs to pay 5 percent VAT on ordinary transactions. But there are many tax-exempt activities. If you want to know more about them, consult our business expert.
Let’s set up a cryptocurrency business with Prospr.
We understand how challenging it is to start your cryptocurrency business in Dubai. There are tons of rules and guidelines you need to follow. Familiarity with authority bodies’ prerequisites is essential; our expert consultants can help you picking the most suitable free zone in Dubai and assist you regarding a complete cryptocurrency business setup. Send us inquiries to hello@prosprplus.ae
