How to Obtain a Crypto License in Dubai?

Crypto License Processes in Dubai

Do you want to get a crypto license in Dubai? 

Delve deep into the article to discover how to start a crypto exchange business in Dubai and how to obtain your Crypto license on the mainland and in free zones.

What is Cryptocurrency?

A cryptocurrency asset or tokens, such as Bitcoin, Ethereum, Litecoin, and more, are digital assets that you can use to invest, trade, and transact. These crypto assets circulate without the need for a central regulatory authority like a bank or government. Cryptocurrencies are built on a decentralized, secure, and transparent distributed ledger technology called blockchain. The blockchain technology is highly secure, allowing users to sell, buy, and trade securely.

Investors can switch to crypto businesses and eventually make higher profits. Additionally, the profit margin may increase over time depending on the type of business you launch. A few profitable crypto business ideas include NFT-based businesses, crypto payment gateways, crypto loans, crypto exchange platforms, and more.

Starting a Crypto Business in Dubai

Starting a business is never an easy feat, especially when it comes to launching a crypto business in Dubai. Given the number of options available, it becomes daunting to decide which might be the best business that can ultimately bring profits. Cryptocurrency has significant potential to change the entire business mechanism, democratize finance, and create a peer-to-peer exchange medium.

Crypto License in Dubai

With a significant increase in Bitcoin and crypto transactions worldwide and the entry of new cryptocurrencies like Tether, Polkadot, Solana, and more into the market, the industry is growing immensely. Investors looking to invest and start a crypto business will need to obtain a crypto trading license in Dubai to legalize their company. The crypto license is the way to keep all crypto trading, purchasing, monitoring, and investing in one piece.

Cost of a Crypto License in Dubai

Investors looking to establish their business in cryptocurrencies should ensure that the minimum cost of a Crypto license in Dubai is between AED 30,000 and AED 50,000.

Crypto License Cost Breakdown

There is no fixed cost for a crypto license in Dubai, but it would be better to contact one of our business setup consultants so you can get proper guidance to learn more about how much this trading license will cost you.

Requirements to Get a Crypto Trading License in Dubai

When deciding to set up a crypto business in Dubai, investors must meet certain requirements that are necessary to obtain a commercial license.

Here are a few things an investor needs to fulfill:

• Ensure all crypto assets are consolidated with the financial free zone departments in the UAE.
• Your operational and capital resources need to be disclosed and visible for approximately 6 months.
• You will need to update information and statistics regarding your financial resources and provide accurate information to the relevant authority in Dubai.
• Clean, genuine, and accurate records are a requirement for a smooth crypto business setup process in Dubai, UAE.
• You will need to acquire a crypto wallet to secure your financial crypto assets.
• Genuine passport copies will be required from all members involved in your business.
• A DED-approved license is also a must for a successful crypto business setup in Dubai.

Benefits of Setting Up Crypto Trading in Dubai

The Dubai crypto market has been thriving in recent years, attracting investors to start businesses in virtual spaces and cryptocurrencies. A few benefits of starting crypto trading in Dubai are as follows:

1. No Taxation

Dubai always ensures to implement company-friendly policies so that businesses can make more profits. Therefore, there is currently no UAE tax, so businesses will no longer have to pay additional taxes, now having the opportunity to make the most out of their business. However, if the government introduces a taxation policy, the corporate tax, which will be effective from June 2023, will be only 9%. So, compared to other countries, investors or employers running crypto businesses in Dubai can save a huge amount from their hard-earned money.

1. Global Recognition of the UAE

The United Arab Emirates is recognized worldwide for its business-centric policies and its leading economy in the world. After becoming a global economic hub, the UAE is now poised to become a leading crypto business world for promising SMEs. By having a crypto business in Dubai, you will have the opportunity to build strong corporate relationships with other countries and states in the world. Wherever you are running your business, you can also have a solid connection with other businesses, stakeholders, investors, and buyers.

1. Less Compliance in the UAE

There are no extra taxes while operating and residing in Dubai. Businesses will not have to pay excessive corporate tax, and there is no income tax. There is less taxation compliance in Dubai and the UAE compared to other countries. Therefore, Dubai is one of the most beneficial places to start your crypto exchange business within a limited period.

Steps to Start a Crypto Business in Dubai

Crypto enthusiasts around the world can start their crypto business by considering the steps mentioned below:

• Finalize Your Company Name

The first and foremost thing is to come up with a name that is simple, unique, and appealing. You might also want to allocate a name for your business that you tend to make your trademark as well. So, when choosing a name, make sure you choose the right one that not only sounds catchy but also complements your business.

• Choose the Preferred Jurisdiction

There are two main options available when it comes to setting up a business in Dubai  and the UAE in general. You can either choose to have a crypto setup on the mainland or set up crypto trading in a free zone. Both mainland and free zone come with different advantages.

• Register for a Commercial Crypto License

Once you are done with the above consideration, you can now register for a crypto license in Dubai. To get your crypto license registration, you need to submit the application to the relevant regulatory body in Dubai. 

• Comply with the Requirements

To set up a crypto trade in Dubai, every business must meet and comply with the mandatory requirements, regulations, and laws introduced by the government. Any carelessness in this regard can land you in trouble with penalties, fines, and even commercial consequences.

Documents Required to Get a Crypto License in Dubai

To set up a crypto company in Dubai, you will need to have a few documents. This includes:

1. A Functional Business Plan : If you want to start a crypto business in Dubai, you need to have a functional and comprehensive business plan that covers all aspects of your business spanning 5-10 years. The more practical and feasible it is, the higher your chances of getting a crypto license in the UAE.
2. Passport Copy of Owner and Shareholders : The business owner must submit not only their passport copy but also the passport copies of all shareholders.
3. Visa Copy of Owner and Shareholders : Similar to passports, the passport holder must also submit their Visa copies along with the visa copies of all shareholders.
4. Name for the Company : The owner will need to provide a few name options for the company to be reserved. If available, it will be reserved. This is to avoid conflict with an existing business if the name matches.
5. Tenancy Agreement : If you plan to use a virtual or physical office, you need to have a solid tenancy agreement. 
6. VARA Approval : You need to get a green light from the Virtual Asset Regulatory Authority or VARA. Basically, they are the ones who ensure that everything is in order. To get their approval, there are a few things you need to prepare. You can learn everything about VARA below):
   1. Overview of the business model.
   2. A functional and practical business model.
   3. Make sure you are on top of everything related to your virtual assets, like cryptocurrency and tokens. Define your "Virtual Asset Activities" by keeping track of things. For example, prices, distribution, and the number of tokens or coins you have.
   4. You need to define your target audience.
   5. Your financial projections need to be defined and ready.
   6. And you need to disclose all your sources for money.

Virtual Asset Regulatory Authority – VARA

Dubai tends to be the primary hub for blockchain and crypto, as well as the Metaverse, which encourages new industries emerging around virtual assets and spaces. After the UAE government issued a new law on the Regulation of Virtual Assets (VAL), it has become a leading jurisdiction for potential crypto investors who want to invest in virtual currencies like Bitcoin, NFTs, Litecoin, Ethereum, and more.

According to the recent law issued by Sheikh Mohammed bin Rashid Al Maktoum, VARA acts as the competent authority to manage, supervise, control, and regulate digital and crypto assets. The legislation provides a legal framework for companies or entities dealing with cryptocurrencies.

Where Can You Get a Crypto License in Dubai?

Dubai has some great business zones for everything crypto-related. You can apply to one of the free zones to get your crypto license. DMCC and IFZA were actually the first two free zones to allow any cryptocurrency activity.

Now more free zones have adopted this, and you can start your crypto business in any of the following free zones:

• DIFC
• RAKEZ FREEZONE,
• DWTC Free Zone,
• DAFZA Freezone

Now you can start your own crypto business on the mainland. We are experts in the field and can make the process of setting up your own crypto business much easier and smoother!

Set Up a Crypto Company in Dubai

Under the VARA legislation, investors need to obtain a crypto trading license in Dubai to start a business in cryptocurrencies. With a Crypto license in the UAE, businesses can buy and sell cryptocurrencies, tokens, and more.