Cryptocurrency License in Dubai

How to get Cryptocurrency License in Dubai?

• If you are thinking of applying for a cryptocurrency license in Dubai, Tetra Consultants advises you to read through this guide to understand the regulatory requirements and necessary steps to be taken for the smooth onboarding of your cryptocurrency business and for obtaining the cryptocurrency license in Dubai.
• Tetra Consultants specializes in providing professional advice to entrepreneurs who are interested to form a company licensed for a cryptocurrency exchange or cryptocurrency wallet in Dubai. We will advise you on all the aspects starting from the setting up of an offshore entity to the preparation of documents and many other aspects related to obtaining a cryptocurrency license in Dubai.
• As Dubai has become one of the best markets for cryptocurrency platforms in the world. The dramatic rise of cryptocurrency companies has completely altered the business all around the world and encouraged more investors and entrepreneurs to set up their cryptocurrency businesses in Dubai.
• By the end of 2020, the world’s cryptocurrency investment and market capitalization were $265 Billion, and $6 billion in online bitcoin business transactions were recorded which made Dubai the prime hub of the world’s cryptocurrency business center.
• Tetra Consultants’ team of professionals offers services to new entrepreneurs and start-ups so that they can easily do their business in Dubai and the rest of the emirates. Besides providing licensing facilities, we also provide other services that ensure the day-to-day operation of your cryptocurrency business is impeccable. Our one true purpose is to fulfill our client’s needs and achieve customer satisfaction.

Our service package for obtaining a Dubai cryptocurrency license includes:

• Set up your company in Dubai and the UAE.
• Get a business trade license for your company.
• Get a cryptocurrency license in Dubai for you.
• Open your corporate bank account.
• Advise you on any legal issues with your business.
• Assist you with the day-to-day operation of your business like tax and accounting.

What is Cryptocurrency?

• Cryptocurrency is a decentralized digital currency that is not issued by any central authority or government. It does not have any physical form and it does not exist in any physical space. Cryptocurrencies can be mined or traded, just like stocks and shares are traded on the stock market. The value of cryptocurrencies fluctuates with the supply and demand for them on various exchanges.

Benefits of Obtaining a Cryptocurrency License in Dubai 

Regulatory clarity and trust 

• Acquiring the license for doing a cryptocurrency business in Dubai creates legal certainty and greatly boosts trust with customers, investors, and business partners. This is further supported by the Dubai cryptocurrency regulations from the government, who are keen on creating a safe environment within which cryptocurrencies are operated. There is a great need for a business to be very clear on regulations in order to successfully sustain operations in such a dynamic industry. 

Access to growing markets 

• Dubai is strategically positioning itself as a global base for cryptocurrency to attract businesses and investors from around the world. With a crypto trade license Dubai, companies can tap into this vibrant market, facilitating participation in various crypto-related activities, including trading, exchange, and consultancy services. The thriving UAE cryptocurrency market presents numerous opportunities for growth and innovation. 

Tax advantages 

• The UAE, especially Dubai, is known for an extremely competitive tax environment where most firms do not have to pay corporate or personal income taxes. This is highly attractive in the fiscal landscape for most businesses wanting to cash in on the highest returns and profit margins especially in the case of a DMCC crypto license Dubai. Such tax arrangements can significantly enhance the bottom lines of cryptocurrency companies. 

Enhanced credibility 

• Licensed operation may mean compliance with local regulations, which will significantly enhance the reputation of a business. A legal cryptocurrency trading Dubai framework is crucial for attracting investors and customers who regard security and legitimacy in financial transactions. This can be the basis of differentiation in a very competitive market. 

Global recognition 

• The Dubai cryptocurrency license holds much worth internationally, giving companies that operate within its jurisdiction much more credibility and access to global markets and partners, making a Dubai crypto exchange setup quite attractive for adventurous companies. 

 Access to traditional financial services 

• The licensed crypto firms have a relatively smooth relationship with banks and other financial organizations, which is a very stringently essential requirement for successful operations and the development of business within traditional finance segments, and they can be really helpful for companies interested in integrating their products with mainstream financial services, which further enables the setting up a cryptocurrency business in Dubai. 

Diverse business opportunities 

• A business license for a cryptocurrency company would enable the business to execute a wide range of activities. They could be just traders but may also have asset management, custody services, software development, or even advisory services on cryptocurrency. Therefore, the potential space for diversification within such an environment is enormous. 

Supportive business environment 

• The government of Dubai has thus put very crypto-friendly policies in place with regards to innovation and support for the blockchain technology sector. The supporting environment fosters new ideas and business models in the cryptocurrency sector, where entrepreneurs will feel at ease navigating their way around the landscape to lead them to success in their ventures. 

Why do you need a Cryptocurrency license in Dubai?

• To start your cryptocurrency company in Dubai, a crypto trade license is required. The cryptocurrency license is considered in the category of “commercial license”. This “commercial license” is important for all the commercial procedures that involve the trading process in Dubai.
• The cryptocurrency business and trade in Dubai is linked with the trading of Bitcoins and all other crypto coins. This crypto license grants you permission to do all other major cryptocurrency trading in Dubai.

Who Should Apply for a Cryptocurrency License in Dubai? 

• To embrace the challenges and opportunities that open access to the cryptocurrencies market in Dubai entails, individuals and businesses who have definite objectives and meet certain criteria should apply for a crypto license in Dubai. Here is a closer look at the key groups that should seek this essential licensing: 

Cryptocurrency exchanges 

• Businesses intending to operate as cryptocurrency exchanges or trading platforms must obtain a license to legally facilitate the buying, selling, and trading of digital assets. In fact, it encompasses not only central exchanges but also decentralized exchanges. With a Dubai crypto license, such platforms would respect the rules and regulations of doing business, bringing in much more trust among users of the platforms. 

Crypto wallet providers 

• Crypto companies that issue or provide digital wallets to store cryptocurrencies are required to have a license. A UAE crypto license ensures one adheres to local regulations. These allow such companies to provide a secure way for clients to hold their digital assets, thus upping user confidence levels in the security of their investments. Such companies require a UAE crypto license to function efficiently. 

Cryptocurrency brokers 

• Business acting as intermediary service providers in cryptocurrency transactions, and which include making the trade between the buyer and seller, must register to receive a license that allows them to operate lawfully. Operating under this regulatory framework and obtaining a crypto trading license Dubai often gives firms an edge by providing them with legitimacy in their operations and placing them as reliable partners in the marketplace. 

Initial coin offering (ICO) operators 

• Businesses seeking to issue an ICO must be licensed so that it adheres to regulations on the raising of funds through cryptocurrencies. Its licensing is essential as it maintains trust and removes doubts among investors and further remains compliant with financial laws that protect both the business and its supporters during the fundraising process. 

Crypto payment service providers 

• Other kinds of companies, which offer solutions with the use of cryptocurrencies, are required to get licenses to operate. With this license, they become licensed and hence allowed to have dealings that are mostly associated with digital currencies. As a result, there is an increased possibility for consumers and merchants as well. The validity in the marketplace will be obtained by getting Dubai crypto company registration for these providers. 

Blockchain technology firms 

• Such business enterprises which focus on the development of blockchain technologies or providing related services will most likely file for a license. Such an act not only increases the level of trust in the business, but also ensures compliance with the local laws thus becoming more friendly to attract clients and investors who respect the existing regulations. 

Crypto asset management firms 

• Dubai authorities require a license for firms involved in investments in cryptocurrencies or advice on crypto assets. A license is fundamental in providing a sense of trust to clients to make investments while ensuring that the assets are handled according to established regulations. 

Startups and entrepreneurs 

• A license enhances the footings of new ventures interested in innovation in the area of cryptocurrency. Their businesses are legitimized, and several doors open to fantastic partnerships and funding opportunities, making them ready for success in the competitive realm of cryptocurrencies in Dubai. By gaining a crypto license in Dubai, they are better placed to cope with the stress of opening a business in a dynamic environment. 

What are the types of cryptocurrency licenses in Dubai?

The Dubai Multi Commodities Centre (DMCC) free zone provides 2 categories of crypto licenses depending on the nature of your business activity:

Crypto trading license:

• The Dubai Multi Commodities Centre (DMCC) Free Zone Authority approves this category of crypto license in Dubai free zone, which allows you to purchase and trade crypto commodities. This license, however, is subject to various regulatory constraints. Companies that engage in crypto exchange operations, crypto brokering, financial, banking, storage servicing, or payment processing, for example, are not eligible for this license. Crypto trading permits may only be obtained with the consent of the free zone’s authority. Likewise, the DMCC has granted a proprietary trading license. Your crypto firm must not participate in any other activities and have a minimum share capital of AED$50,000 to obtain the license.

Distributed ledger technology service:

• To qualify for this license your company operations should be connected to database management solutions and the distribution of ledger-based technologies such as blockchain. Under this license, these firms are not authorized to trade or set up cryptocurrency exchanges, provide any financial-related services, or process any payment. To get this license, you must also have clearance from the Dubai Multi Commodities Centre (DMCC) and a minimum capital share of AED$500,000.

What are the positive implications of getting a Dubai Cryptocurrency License?

Here are the positive implications of obtaining a cryptocurrency license in Dubai:

• With the cryptocurrency license, you can stand out from the crowd. Despite its popularity in the UAE, Bitcoin is currently used by only a few companies as a means of payment.
• It is quite affordable when compared to other commercial trade licenses in the UAE. You can get a lot more in return owing to the UAE cryptocurrency license.
• Cryptocurrency blockchain technology is extremely secure. With a bitcoin license in Dubai, you can maintain your anonymity.
• Cryptocurrencies are widely acknowledged worldwide. Cryptocurrency transactions are quick and have no downtime.

Why should you consider getting a Cryptocurrency License in Dubai?

• The UAE has aimed to become a pioneer in business and industries and also has a view on the cryptocurrency industry. With the rising curiosity in cryptocurrency investments, trade and business in this industry are also taking place in Dubai, UAE. Following are some of the major highlights of UAE’s cryptocurrency landscape:
• The UAE has unveiled its “Blockchain Strategy 2021,” which intends to assist international companies in doing trade and business in this sector. Within this, blockchain technology is expected to be used in 50% of government transactions.
• The Financial Services Regulatory Authority (FSRA), the financial regulator of Abu Dhabi Global Markets (ADGM), is the first in the UAE to give complete instructions and rules on cryptocurrency trading.
• Currently, there are more than 400 crypto businesses operating in the UAE. This figure is anticipated to rise to 1000 by the end of 2022, as the UAE ramps up its efforts to expand the digital economy.
• The framework and laws governing cryptocurrency of the Dubai and Abu Dhabi Free Zones encourage crypto entrepreneurs to set up exchanges while laying out norms for ethical trading and consumer protection.
• The DMCC Crypto Center, which opened in May of 2021, is strongly promoting cryptography and blockchain technology in Dubai. This hub is home to roughly 100 crypto-related firms, with an additional 900 having submitted applications for a license.
• The UAE has implemented favorable policies to enhance digital asset trading and increased interest. The Securities and Commodities Authority struck an agreement with the Dubai World Trade Center (DWTC) authority in September’21 to enable the trade of crypto assets.
• Dubai also hosted its first Crypto Expo, which soared the crypto assets in the region.

Legislation and regulators of cryptocurrencies in the UAE

• Regulation of cryptocurrency and blockchain projects in the UAE is performed by the FSRA (Financial Services Regulatory Authority) regarding ADGM (Abu Dhabi Global Market). This authority publishes guidance on cryptocurrencies. It also monitors blockchain businesses to ensure transparency as well as prevent money laundering and financing terrorism.
• Other authorities that might contribute to crypto regulations in the UAE are the SCA (Securities and Commodities Authority) and the DFSA (Dubai Financial Services Authority).

Where to get the Cryptocurrency License in Dubai?

Before starting a cryptocurrency business here, you need to get a cryptocurrency license in UAE. Currently, three of the free trade zones are issuing cryptocurrency licenses in the UAE. They are:

Dubai Multi-Commodities Centre (DMCC):

• The Dubai Multi Commodities Centre (DMCC) free zone is an option for dealing with cryptocurrencies in the UAE. The DMCC crypto license ensures the legitimacy of your business. Regal Assets was the first firm to get this license, and it provided its clients with cold storage of cryptocurrencies.
• The Dubai Multi-Commodities Centre welcomed the advent of cryptocurrencies. They provide cryptocurrency licenses to Dubai entrepreneurs and company owners. People from all over the world approach Dubai Multi-Commodities Centre to obtain their UAE cryptocurrency license. The Dubai Multi-Commodities Centre cryptocurrency license in Dubai allows you to do commercial operations such as offering cryptocurrency-related services, storing cryptocurrency, trading, managing cryptocurrency, developing cryptocurrency-related software, and so on. With the cryptocurrency license in Dubai, you may also give advisory services and consultancy.
• Dubai Multi-Commodities Centre has created a new crypto center and intends to be the hub for all blockchain-related activity in Dubai. Dubai is already regarded as the world’s most technologically advanced city, and the inclusion of crypto and blockchain has further strengthened its standing. The Dubai Multi-Commodities Centre cryptocurrency license is fundamental to this success.

Our team of consultants has summarized the core advantages of operating with your cryptocurrency license here:

• 100% foreign ownership of a local company – it is not necessary to search for local partners;
• zero restrictions for the transfer of the income and capital of a company;
• Favorable tax regime with 0% corporate income tax for the subsequent 50 years of operation;
• 0% rates for import and re-export taxes;
• Zero currency restrictions;
• No existing restrictions for involving foreign employees in the company’s operation.

Dubai Airport Free Zone Authority (DAFZA):

• Dubai Airport Free Zone Authority, or DAFZA for short, is another free zone in Dubai that has welcomed cryptocurrencies. They formed an agreement with the Securities Commodity Authority (SCA) to assist entrepreneurs and businesses who sought to conduct cryptocurrency-related commercial activity. With the cryptocurrency license in Dubai, they facilitated business concerning cryptocurrency in the region.
• Companies who have obtained a cryptocurrency license from the Dubai Airport Free Zone Authority can conduct business with their cryptocurrency assets. They may offer services to international investors visiting Dubai from all over the world. Companies inside the Dubai Airport Free Zone Authority may easily do business due to the solid regulatory framework in place. They are progressing with the goal of increasing the adoption and expansion of cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and others..

Abu Dhabi Global Market (ADGM):

• The Abu Dhabi Global Market (ADGM) Free Zone allows cryptocurrency assets that are regulated by the Financial Services Regulatory Authority (FSRA). It is the regulatory body that governs all crypto-related assets in the UAE.
• It is currently the only legal body that has an extensive regulatory framework for cryptocurrency licenses in the UAE. Financial Services Regulatory Authority (FSRA) in combination with Abu Dhabi Global Market (ADGM) has published a guideline about how to use the cryptocurrency license in the UAE for the betterment of businesses around the country.

What are the regulatory and documentary requirements for obtaining a Cryptocurrency License in Dubai?

• A DMCC Company is a limited liability company wherein the shares can be held either by a single or multiple shareholders. The shareholder/s can be either individual/s or corporate entities.
• The minimum share capital required for forming a Dubai multi commodities center (DMCC) company would be AED 50,000/- (AED 10,000 per shareholder) for Specific Trading or Service License and AED 1,000,000 for General Trading License. The value of each share is AED1,000 or multiples thereof. The capital contributed to the DMCC Company can be utilized in the operations of the company. In the case of a branch of a local or foreign company, no initial share capital is required. Special rules and regulations are applicable to DMCC companies.
• The DMCC Company needs to appoint a minimum of one Director, a Manager, a Secretary, and a Negotiator. The Director, Manager, Secretary, and Negotiator can be the same person.
• The manager will be required to be on the residence visa of the company under the sponsorship of the Free Zone Authority. To validate the visa, the Manager, would be required to enter the country at least once in six months. In case the Manager is already having a UAE visa, a NOC from the present sponsor has to be submitted.

Other required documents

• A commercial license issued by the Dubai Department of Economic Development (DED) must be submitted
• Copies of valid passports of all business members must be submitted
• Capital resources and operational expenses documents for the past 12 months period must be documented and submitted
• Crypto-assets should be aligned with the financial free zone departments of the UAE
• All information must be secured in a crypto wallet
• A clean record of activities must be submitted.
• NOC from Securities and Commodities Authority (SCA).
• A detailed business
• Provide copies of the passports of all the partners in the business.

Other important factors considered by the regulatory authority

• It needs to be considered in mind that you will only receive your Dubai crypto license after the authorities consider some factors. And some of them are traceability, market capitalization, price volatility, and many more.
• Besides, it is vital that your entity adheres to a strict KYC (Know Your Customer) Norm.
• Furthermore, your business must have enough capital in order to operate successfully for at least six months. On the other hand, it is essential to fulfilling some requests from government authorities regarding the disclosure of VAT, anti-money laundering, etc.
• And it is also mandatory to show compliance with the Anti-Money Laundering and Counter-Terrorism Financing Laws of the country.
• Lastly, there is one more requirement, which is related to safeguarding against cyber security and securing clients’ financial information.

What is the procedure for getting a Cryptocurrency License in Dubai?

To operate a cryptocurrency business in Dubai, you will need a trade license. But there is a little bit of admin to take care of before we get to that stage. Tetra Consultants has summarized some of the most prevalent steps to be undertaken when applying for a cryptocurrency license in Dubai:

Step: 1 Pre-requisite for a legal entity to be registered and choosing a trade name

• To apply for a cryptocurrency license in Dubai you need to have a registered legal entity in the region. Tetra Consultants is proficient in providing assistance to our clients in registering company in Dubai mainland and free-zone.
• Before moving forward with the registration of the entity, Tetra Consultants’ team of experts will first evaluate your business needs and goals on the basis of which we will recommend the best-suited business entity type for your cryptocurrency business in Dubai.
• Tetra Consultants team will help you with the pre-registration requirements to choose a trade name for your cryptocurrency business in Dubai. First, we will help you choose your company name. When making this decision, we will make sure that you must abide by a strict set of naming conventions.
• Tetra Consultants will also check that your chosen name is available before registering it for you with the respective free-zone authority like Dubai Multi Commodities Centre (DMCC) or with the Dubai Department of Economic Development (DED). Once confirmed we will register the same with the respective authority.
• Once the above step is completed, Tetra Consultants will conduct due diligence on the management and shareholders of the firm.