UAE is growing as a popular cryptocurrency hub of the world. There is a rise of the cryptocurrency business in Dubai and more companies are looking at the new technology for adoption. It is expected that the cryptocurrency business in Dubai will witness a boom in the coming years in the Middle East region.
The market capitalization for Crypto Currency in UAE for 2020 was Approx. USD 265 Billion. The Cryptocurrency market is in a growth phase with the rise in Bitcoin transactions worldwide and new Cryptocurrencies entering the market.
Cryptocurrencies like Bitcoin, Dogecoin, Etherum, Tether, Polkadot, etc, are becoming actively popular in UAE. Also, online Cryptocurrency trading exchanges enable Bitcoin trading for individuals.
What is a Cryptocurrency License?
To legalize the cryptocurrency business in the UAE, the investor must obtain a commercial license. All the Crypto trading, monitoring, buying, etc., will be regulated by the Crypto license in UAE.
Currently, the cryptocurrency license in UAE is issued by the Following Free Trade Zones:
- DMCC – Dubai Multi-Commodities Centre
- DAFZA – Dubai Airport Free Zone Authority
- ADGM – Abu Dhabi Global Market
- Sharjah Research Technology & Innovation
Operation of Crypto exchanges in UAE
To operate a crypto exchange in UAE there is a set of regulation and compliance requirements. Also in most cases, the application for a crypto exchange goes through strict scrutiny from the Securities & Commodities Authority, ADGM, and the respective Free Zone authorities.
Opening and operating a Crypto exchange in Dubai is a new thing. It is expected to be a game-changer for the crypto license companies and investors in the UAE.
Taxation of Cryptocurrency Trading Companies
There is no income tax or corporate tax in UAE. Hence there is no tax for crypto trading Companies in Dubai. UAE has Value Added Tax at a very low rate (5%.)
Entrepreneurs can easily set up a crypto trading company in UAE that is not taxable. However, the regular transactions using cryptocurrency in UAE will be subject to the 5 % VAT.
Procedures to Follow for Obtaining a Crypto Currency License in Dubai
The following steps are to be followed to obtain the Cryptocurrency license in Dubai:
- Submit the cryptocurrency license application form to the respective Free Zones
- Submit the required documents of the shareholders – passport copy, photographs
- A brief business plan and share capital to successfully run the company
- Choose the suitable office space based on the requirement and prepare the tenancy agreement
- Make the required payment for the Crypto License and Office Rent
Post the approval by the respective Free Zone authorities, the Crypto trading license will be issued for the company. The investor can then apply for a UAE residence visa and proceed to the opening of the corporate bank account in the UAE.
Crypto License Governing Bodies in UAE
UAE aims to provide an integrated ecosystem for the cryptocurrency trading and blockchain sector and adapt to the latest technology trend driving economic growth.
The Securities and Commodities Authority (SCA) along with DMCC has worked out a regulatory framework for businesses in the line of cryptocurrency trading, listing, management, etc.
The Dubai Airport Free Zone also will follow similar guidelines and register cryptocurrency trading licenses for the investors.
Crypto License Guidelines from Abu Dhabi Global Market Free Zone
Similarly, the FSRA (Financial Services Regulatory Authority) and ADGM (Abu Dhabi Global Market Free Zone) publish certain guidelines on cryptocurrency trading and business licenses.
The regulations of Crypto Assets Activities in ADGM is the most extensive regulatory framework available in UAE and there is no other law governing cryptocurrency in UAE currently.
However, with the prominence of cryptocurrency trading, the UAE Government is all set to introduce a detailed regulatory framework for cryptocurrency license issuance and Crypto trading.
DMCC Launches New Crypto Centre in Dubai
DMCC has launched a Crypto Centre, a comprehensive ecosystem for businesses operating in the crypto trading and blockchain sectors.
It is aimed to be a hub for the development and application of crypto and blockchain technologies. The center will provide support to all types of companies to develop solutions related to blockchain and crypto technology.
DMCC Crypto Center – The Crypto and Blockchain Hub of UAE
The new center will provide co-working spaces to crypto entrepreneurs and SMEs to test and develop their blockchain and crypto solutions.
The Centre also has a crypto advisory practice led by CV labs, the entity behind the Switzerland Government-backed Crypto Valley. Also, a series of incubators and accelerator programs are lined up for the start-ups who intend to receive funding for their crypto projects.
The DMCC’s new Crypto Centre will be center stage for Dubai’s future blockchain initiatives. Dubai has emerged as a global hotspot and technology leader in the blockchain and related applications. With the addition of the DMCC Crypto Center, the blockchain and crypto ecosystem in the UAE is expanding to new heights.
To know more about Crypto License in UAE & Cryptocurrency business in Dubai. Talk to our expert Business Consultants right away!
Contact Us: Aurion Business Consultants