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Over the past several years, the UAE has seen more than $25 billion in crypto transactions in the trading market. Crypto is rising significantly as a distinct asset class. These high transactions highlight the country’s strategic role as a leader in cryptocurrency, making the UAE an investment hub for foreigners. Nowadays, the DWTC Crypto License in Dubai is in high demand, with many investors in the UAE keen to learn about the crypto trading market.

Getting your DWTC Crypto License is a way to enter the world’s best market and experience a new form of trading in the UAE.  Dubai, famous for its innovation and strategic location, has set up the DWTC as a central hub for cryptocurrency businesses.

Understanding cryptocurrency can be difficult sometimes, but with the proper guidance, this concept can be cleared, too. This guide by Shuraa will help you know the steps, required documents, and benefits of making your entry into Dubai’s growing crypto industry smooth and successful.

What is Cryptocurrency?

Cryptocurrency, or “crypto,” is a digital or electronic currency that helps make secure and verified transactions. It does not have a centralised issuing or regulatory authority. Instead, it operates on a decentralised system to monitor transactions and create new units.

Cryptocurrencies help with peer-to-peer transactions, allowing individuals to send and receive payments anywhere in the world. These transactions are recorded as digital entries in an online database rather than represented by physical money exchanged in person.

Examples of cryptocurrencies

Some examples of cryptocurrencies include: 

  1. Bitcoin 
  1. Ethereum 
  1. Solana 
  1. Litecoin 
  1. Ripple 

Overview of Crypto Regulation in UAE

Project time frames4 to 6 months
State fee for application25 000 USD
Required share capitalfrom 100 000 USD
Corporate income tax9%
Annual supervision fee50 000 USD
Local staff memberAML Officer & Director
Physical officeRequired
Accounting auditRequired
Bank account optionsSome European EMIs, Midshore EMIs

Benefits of a Dubai Crypto License

Dubai is known as a global hub for cryptocurrency and blockchain industries. Getting a crypto license here brings several advantages for companies eyeing international growth in digital assets. Below are the Benefits of a Dubai Crypto License.

  1. Operating within Dubai’s regulated jurisdiction ensures adherence to international AML and KYC standards, bolstering customer trust and reducing regulatory risks.
  1. With a Dubai crypto license, companies tap into a vast international market, fostering business expansion, foreign investments, and global partnerships.
  1. Dubai’s favourable tax policy, including no income tax for companies and individual entrepreneurs, creates an enticing economic environment for crypto businesses.
  1. Dubai offers a transparent regulatory landscape, actively backing fintech and blockchain innovations. This clarity reduces legal risks and aids in business planning.
  1. A Dubai license boosts a company’s global reputation. Operating in this innovative financial hub signal’s reliability, attracting new clients and partners.

What is the DWTC Free Zone?

The Dubai World Trade Centre, or DWTC Free Zone, is a special area within Dubai that offers businesses a helpful operating environment. DWTC provides easy business setup, licensing, and operations processes. It also offers 100% foreign ownership, no currency restrictions, and tax exemptions.

The Companies benefit from state-of-the-art infrastructure, networking opportunities, and a central location in the Dubai World Trade Centre.

Requirements for Starting a Cryptocurrency Trading Business in the UAE

The Requirements for Starting a Cryptocurrency Trading Business in the UAE are mentioned below:

  1. Maintain funds to cover operating expenses for six to twelve months as regulations require.
  1. Focus on Keeping Virtual Assets Safe and customer data with encryption tech, multifactor authentication, and preventing unauthorised access.
  1. Submit proper and timely financial and operational reports to maintain transparency and regulatory compliance.
  1. The owner must provide passport copies for a crypto exchange license in Dubai.
  1. Maintain funds to cover operating expenses for six to twelve months as regulations require.
  1. The Anti-Money Laundering/Combating the Financing of Terrorism regulations, including customer registration, identity verification, and background checks.

Important Considerations Before Start Your Crypto Business in Dubai, UAE

Before you start your crypto business in DWTC crypto, here are some points you should consider.

DIFC Establishment Requirements

To start a crypto business in the Dubai International Financial Centre (DIFC), your company must have at least 5 years of legal presence in the crypto field in another country.

Alternatively, consider starting a company through a representative office in Dubai for a more practical approach.

Regulatory Compliance

Make sure that your crypto business, such as representative offices, data mining firms, and consultancies, adhere to regulations set by VARA under the Dubai World Trade Centre (DWTC).

Contact regulatory authorities to understand the legal framework for your crypto business in the Emirates.

Data Mining Firm Setup

Apply for an IT company trading license if you intend to open a data-mining firm for your crypto business in Dubai. Obtain additional consent for crypto business operations if necessary.

Exclusive Licensing from DWTC

Explore DWTC’s unique self-proprietary cryptocurrency license, which facilitates investments in crypto assets. Consult with Shuraa’s business experts to assess starting your business with a DWTC Crypto License.

Cryptocurrency Consultancy Business

Establish consultancy services for crypto businesses in Dubai and seek assistance from Shuraa’s experts to open a bank account for your crypto consultancy business in Dubai.

How to get a DWTC crypto license?

Below are the Process to get a DWTC crypto license:

1. Document Submission

The applicant must include all documents requested by the DWTC Authority. Based on the DWTC Authorities, additional documents or information may be requested.

2. Get Initial Approval

The second step is to Submit a completed Initial Approval VASP Questionnaire (VARA form) and get pre-approval from VARA. Then Pay the DWTC Authority fee.

3. Corporate Document Signing

The next step is to Sign the Memorandum and Articles of Association with the required capital set by the DWTC Authority.

4. Office Lease Submission

 Now, Provide a copy of the lease agreement for a private physical office. Demonstrating details of the premises leased for use as the Applicant’s registered office within the Free Zone.

5. Get Non-Operational Virtual Assets License

After fulfilling the mandatory requirements, the DWTC Authority will issue the applicant a Non-Operational Virtual Asset License.

6. Operational License Issuance

 You need a VASP license/exemption from VARA to conduct virtual asset activities. The DWTC Authority issues an Operational License.

Note: To avoid non-renewal, please get the VASP License within one year of receiving the Non-Operational License from the DWTC Authority. This includes visas and establishment cards, if applicable. Fees paid will be forfeited.

Cryptocurrency Regulations and Risks in the UAE

Cryptocurrency Regulations and Risks in the UAE are mentioned below:

Regulatory Framework

1. Regulatory Bodies

  • Enforces regulations for various cryptocurrency-related activities.
  • Regulates payment tokens and stored value funds.
  • Oversees ADGM operations, ensuring compliance with its regulations.

2. Licensing

  • SCA oversees crypto licenses issued by DAFZA.
  • ADGM Free Zone follows SCA regulations, with direct oversight from the FSRA.

3. Monitoring

  • Authorities closely monitor cryptocurrency and blockchain businesses to deter money laundering and illicit activities. 

Risks Associated with Crypto Assets

Risks associated with crypto assets are as follows:

  1. Recognised Risks: Financial laundering and Sponsorship of terrorism
  1. Compliance Requirements: Develop rules based on UAE laws, ADGM guidelines, and FATF best practices. Compliance with global risk mitigation and transparency standards.
  1. Management Principles: Conduct business risk analysis. Implement QAS, AML measures, and system controls. Maintain control over management and enterprise systems. Mandatory reporting and record-keeping.

What is the Cost of a Crypto License in Dubai?

The DWTC crypto license cost starts from AED 44,500* for investors who want to start their cryptocurrency business in Dubai. The final cost may depend on the rules and regulations, as well as the selected free zone. For exact pricing details, please consult with Shuraa Experts.

DWTC’s Package Offered by Shuraa

Shuraa offers a package for Dubai’s Crypto market with DWTCs. Here are as follows:

  1. Co-working space access
  1. visa quotas
  1. Establishment card included

Types of Cryptocurrency Licenses in the UAE

Once you get a license. Businesses can issue digital currencies, conduct exchanges, manage assets, and register cryptocurrency exchanges. The different types of Cryptocurrency Licenses in the UAE are as follows:

DWTC Crypto License

DWTC (Dubai World Trade Center) was established in 2015. It’s a Free zone. It is designed to serve innovative industries such as virtual assets, cryptocurrency, and blockchain.

DWTC and VARA are working together to help approve DWTC’s status as a designated zone for regulated crypto companies. Under the supervision of the Securities and Commodities

Options for legal activities in DWTC Crypto License include distributed registry licenses for database management services and cryptocurrency trading licenses. Additionally, businesses can provide financial advice, manage crypto assets, and engage in brokerage activities.

Crypto License at DMCC

DMCC (Dubai Multi Commodities Centre) is a free economic zone and a popular destination for cryptocurrency businesses in the UAE.

Getting a cryptocurrency license in Dubai through DMCC ensures the legality of your business. Regal Assets was the first company to secure this license and offer cryptocurrency cold storage services.

IFZA Crypto License

The International Free Zone Authority (IFZA) in Fujairah offers opportunities for cryptocurrency entrepreneurs. Like DMCC, IFZA supports cryptocurrency businesses and issues licenses in collaboration with Dubai’s Securities Commodity Authority (SCA).

Cryptocurrency License at DAFZA

DAFZA (Dubai Airport Free Zone Authority) collaborates with the SCA to facilitate cryptocurrency trading and related services for businesses within its jurisdiction.

This zone aims to integrate cryptocurrency licensing with global services for investors, providing flexible legislative support and regulatory framework.

Crypto License in ADGM

ADGM (Abu Dhabi Global Markets) is a financial-free zone in Abu Dhabi that established cryptocurrency regulations in 2018.

It offers a regulatory framework focusing on various activities associated with crypto assets. It includes cryptocurrency exchange, storage, buying and selling, and management of third-party crypto assets.

Tax Implications for Cryptocurrency Businesses in the UAE

Cryptocurrency businesses in the UAE enjoy significant tax advantages. Companies exclusively involved in cryptocurrency trading or receiving it as income benefit from a 0% federal income and corporate tax rate.

However, introducing a 5% Value-Added Tax (VAT) in 2018 applies to standard transactions, potentially impacting tax-exempt operations. For expert advice and clarity on tax-exempt activities, Shuraa offers consultation services, especially for cryptocurrency businesses.

Start Your Crypto Business with Shuraa

Getting a crypto license in Dubai allows you to earn profits in DWTC crypto. With Shuraa’s support, you can start your cryptocurrency business in the Emirates.

To discover how to start your business in Dubai, schedule a free consultation with one of Shuraa’s corporate advisors. Simply call us at +971 44081900 or send a WhatsApp message to +971 507775554. Alternatively, you can reach out via email at [email protected].

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Date: July 26th, 2024
Time: 11:00 AM to 2:30 PM