Blockchain and cryptocurrencies may feel exceptionally new concepts to some entrepreneurs globally. However, they already have a huge potential in the UAE market. As a prime location for business, Dubai is one of the most welcoming places to start a blockchain company.
The United Arab Emirates is one of the few countries that are embracing blockchain and cryptocurrencies. Also, the UAE government has brought a new Digital Currency Regulatory Framework law. It includes provisions to protect investors and ensure transparent trading activities.
Despite a young sector in Dubai, the cryptocurrency market attracts Emirati business owners and foreign investors. Reasons for it are economic stability, security with blockchain technology, low transaction cost, 100% business ownership, etc. Setting up a business that blockchain powers is a good idea to tap into the thriving digital economy.
Insights about growth of blockchain businesses in Dubai
The UAE government encourages you to start a blockchain company in Dubai. Also, the UAE central bank and the Dubai Supreme Legislation Committee promote digital currencies as payment methods. With the rising interest in the blockchain, these highlights show Dubai is perfect to incorporate your business.
- Around $35 billion bitcoin transactions from July 2022 to June 2023 make Dubai the world’s major base for cryptocurrency business.
- UAE’s Blockchain strategy 2021 specially focuses on foreign entrepreneurs, so they can pursue trade and business lawfully in Dubai.
- This strategy forecasts blockchain technology will facilitate almost 50% of government transactions.
- The number of blockchain businesses operating in the UAE is 1800 in the year 2023.
- FSRA (The Financial Services Regulatory Authority) and ADGM (Abu Dhabi Global Markets) are the key regulators to issue clear guidelines to conduct cryptocurrency trade.
- UAE’s Digital Currency Regulatory Framework law aims to prevent money laundering and protect consumers.
- Going live in May 2021, the DMCC Crypto Center is the home of 550 crypto organizations in 2023.
- Dubai hosts various kinds of Crypto Expo which present cryptographic and blockchain technology in action.
Process to register license for blockchain firm in Dubai
This is the step-by-step procedure to start a blockchain company in Dubai.
- Step 1: Choose suitable company name
- Step 2: Select the right economic zone
- Step 3: Obtain a business license
Now, we take a look at these steps to start a blockchain company in Dubai.
Step 1: Choose suitable company name
The first step is to pick an appropriate company name. Remember, there are certain rules while choosing your trade name. Come up with a business name that is clear, memorable, and emphasizes your business activity.
Here are the rules you need to follow while selecting a crypto business name.
- Ensure your chosen business name is still available for registration.
- The name shouldn’t relate to any religious or political name.
- Choose a name that is legally relevant to the specific business activity.
- Don’t select any abusive or blasphemous name.
- The name shouldn’t have any reference to a well-known organization.
- Business name should not hurt any public moral.
- The name shouldn’t even have an abbreviation of your name.
Step 2: Select the right economic zone
The success of your crypto business totally depends on selecting the right jurisdiction in Dubai. After all, every economic zone has different pros and cons. If you choose Dubai free zone for blockchain business, you benefit from no currency restriction and total profit repatriation.
Whereas, with Dubai mainland you are able to provide your service to any part of the UAE. For opening an overseas company you may need to look for a local sponsor for funding. Also, remember that free zone and mainland companies have different use cases.
Step 3: Obtain a business license
You need to get a trade license to operate a lawful blockchain business in Dubai. Apply with the Dubai Department of Economic Development (DED) to acquire a crypto license. Cryptocurrency or blockchain business operates in the same way like other financial trading businesses.
To keep your license fulfill the corporate laws, comply with the anti-money laundering regulations, and submit your accounts for audit. With the help of proper experts, the whole business setup process becomes easy and straightforward. So, this guide will help you with proper knowledge about setting up a blockchain company in Dubai.
For this purpose, you need to fulfill the following requirements.
- Show a crypto business plan
- Collect a fill out a commercial license form, which is issued by DED
- Submit valid passport copies of shareholders
- Show a clean crypto wallet
- Capital resources and business operational activities need to be visible for 6-12 months
Considerations to launch a blockchain business in Dubai
These are the things you must consider before you start a blockchain company.
Next, we briefly look upon these important things.
Technical resources
For every blockchain company, it is a must to have a team of technical experts. Before starting any crypto business it is necessary to be tech-savvy, whether you are a developer, marketer, or broker. Especially, as a crypto founder you need to fully understand the blockchain technology system to make technical claims.
Approach investors properly
Though crypto business looks attractive and profitable, it has some certain financial risk factors for the entreprneurs and investors. Despite all the risk, you will have to approach and attract venture capital (VC) companies. If you have an interest in creating your cryptocurrency or alt-coin, you can take the initial coin offering (ICO) route.
There are hundreds of blockchain VCs who are always looking for new crypto business opportunities. So, you need to leverage your public speaking skills in the right way. Accordingly, you can entice the investors in backing your blockchain/crypto company.
Open to adaptation
Flexibility to adapt to new things in the blockchain is the most important thing. For example, Ethereum came late to the crypto market, but holds a large share as the second most popular blockchain technology. You need to always remain open to the new market trends which cause huge market shifts.
Transforming the UAE business sector with Blockchain
The digital world is forming amazing opportunities for business investors as cryptocurrency is blending with the trading UAE businesses. Blockchain is one of the cutting-edge technologies which is opening new platforms for variety of business sectors including Bitcoin trading. Some profitable business ideas can help entrepreneurs to adopt this next-generation technology into their work.
Many famous companies worldwide are using the blockchain in their new technology mix. Futuristic enterprises are infusing this advance-level technology into their business activities. The best examples of the use of blockchain technology are Ripple, Coinbase, and Bitcoin.
It helps them in performing fast transactions without any threat of hacking or data leakage. Companies that belong to other industries are also adapting Blockchain technology such as Nestle, McKesson, Westfield, and Pfizer. They are gaining maximum benefits from blockchain in many unique ways.
Blockchain is creating a safe, smart, and shielded platform for any business investor or entrepreneur who is willing to succeed in a fast-growing market. This technology is the future of the cryptocurrency and alt-coins throughout the world. Rapidly becoming a need for every sector, working with the best blockchain developers can turn positive business outcomes.
Business niches using blockchain technology in Dubai
These are a few businesses which are going mainstream after the popularity of the blockchain technology in Dubai, UAE.
- Decentralized cloud storage
- Crypto trading
- Supply chain distribution
- Virtual wallets
- Innovative education and training
Now, we briefly look upon these business sectors which blockchain is shaping in Dubai.
Decentralized cloud storage
Blockchain business has no limitations because it can be molded into different distinctive structures which offer intangible services to digital traders. Decentralized cloud storage businesses using blockchain technology can help to connect with crypto coin clients by developing huge storage space by following a peer-to-peer method. This cloud ledger can help customers to buy or sell coins with the relaxation of cryptic security and fast transferring procedure.
Crypto trading
Establishing a cryptocurrency exchange business with Blockchain is the perfect time to start because the availability of buyers and sellers is present in abundance. The crypto trading blockchain business can help to provide a transparent chain of networks. Accordingly, they help users to buy cryptocurrency by using fiat money and share useful details with the trading community.
Supply chain distribution
One of the most favorable Blockchain businesses in the world is product supplies distribution. Globally, seaports are using Blockchain technology to regulate their supply chain management system. Walmart is using a chain of digital blocks to track products and share real-time data with their customers.
Blockchain technology is most suitable to acquire to get the competitive edge in the import/export market. Transparent information can easily be observed and shared between users through a privately locked digital network. So, the foreign investors exploring new business setups can think about augmenting blockchain in the mix.
Virtual wallets
Crypto coins are a virtual currency which transfers virtually from one spot to another. Blockchain technology helps to continue the digital transactions by keeping the buyers’ and seller’s information in a safekeeping vault. The private key cryptocurrency companies offer to traders helps to regulate bitcoin trading securely and all the information is stored privately and only accessible to specific users. Starting a crypto wallet business has great potential in the digital market and using blockchain technology can increase the company’s service level which can help to get maximum clients.
Innovative education and training
Internationally, the educational sector is going online gradually and creating virtual platforms for teaching remotely and maintaining digital records. The blockchain technology use in the educational department can ensure the protection of students’ transcripts and diplomas from tampering. Potentials of blockchain can help teachers, students, and data management to share or store information freely in a private network.
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5 Ways of investing on Blockchain in Dubai
Here are the five best ways of investment in the blockchain technology in Dubai today.
- Become digital asset investor
- Support blockchain businesses
- Back organizations implementing blockchain
- Spend time on learning blockchain development
- Invest in alt coins and tokens
Going forward, we look into these means of the blockchain investment in Dubai.
Become digital asset investor
The most popular approach to invest in blockchain technology is by turning into a digital asset investor. As a digital asset investor, your job would entail you investing in assets that dwell on a blockchain. If, you are already familiar with cryptocurrencies like Bitcoin, Ethereum, and Ripple.
Then, investing in these types of cryptocurrencies is comparatively simple. You can set up an account on any of the cryptocurrency exchanges of your choice, like Coinbase or Gemini. After you have made the account, you can start your business by buying your desired crypto.
Support blockchain businesses
Investing in blockchain technology does not mean you have a restriction to only buy tokens. Also, you can make traditional investments in companies that specialize in blockchain products and services. Unfortunately, your options for public blockchain investments are rather scant at the moment.
Some blockchain-driven firms operating in the UAE are not large enough to warrant a public listing in the company registry. However, the number is gradually rising, as more startups are turning to embracing blockchain technology in Dubai. More practical means to invest in blockchain companies involve angel investing and crowdfunding.
Back organizations implementing blockchain
If you are comparatively risk-averse, investing in the organizations which specialize in Blockchain implementation, is an excellent option for you. It is surprising to know, there are already many publicly-traded businesses that have included blockchain technology to their business ecosystem. They give you the opportunity of dabbling in the Blockchain tech without exposing yourself to too much risk of failure. Because, these organizations are not wholly dependent on blockchain technology, they provide safer investment options for companies trying things out.
Spend time on learning blockchain development
The thing about the blockchain technology evolution is that it is a complete paradigm shift. It has the immense potential to revolutionize the way we transfer information, much like how the internet did change everything. Invest the time in researching and learning the technology, and then develop helpful blockchain applications.
Invest in alt coins and tokens
Cryptocurrencies are the most prominent means of investing in blockchain. Together with Bitcoin, many other alt-coins and crypto tokens are available. Always choose coins which have ethics and check in place, and are not pump-and-dump, or part of a Ponzi scheme.
Just like all financial investments, diversify your holdings while investing in blockchain. Therefore, you must not restrict yourself to blockchain investments, rather invest across several other industries. Doing so ensures that an unpredictable market downturn does not run you dry and bankrupt.
Advantages of blockchain for UAE cryptocurrency companies
Blockchain technology provides these amazing benefits for the crypto-trading market.
- Highest level of personal and private data protection
- Save time by canceling governmental procedures and fast transfer of crypto assets
- Cost-effective technology to blend in any digital or logistics sector
- Best platform for storing private or public information or financial data with minimum chances of malicious attacks
- Cryptocurrency mining via using blockchain technology reduces transaction charges but creating a safe source for bitcoin trading
Significance of blockchain for software development sector
The progression in modern technology opened many gates for developers to create an advanced system for protecting and sharing data virtually. Blockchain is one of those examples that is rapidly becoming a trend among crypto trading, banking, and investment. It helps the business industry by creating a digital secured platform for sending or receiving e-currency globally in minimum duration.
Many digital companies are trying to infuse blockchain into their transaction procedures, and they’re gaining positive feedback from their clients. Microsoft and IBM are one of those major companies that merged Blockchain into their daily business activities. Hybrid blockchain is one of those best applications of Blockchain that received optimistic reactions globally.
The majority of companies are diverting towards adopting this technology into their system. Also, many entrepreneurs are starting a new blockchain business in Dubai to assist other enterprises across the UAE and internationally. Not only cryptocurrencies, numerous information security conscious firms are opting for blockchain adoption.
Importance of blockchain for cryptocurrency business
The blockchain technology is now evolving into a far bigger network of systems that comprise large chunks of information. Cryptocurrency trading is the main driver that persuades companies to infuse blockchain into their systems. So that they can create a secure environment for all buyers and sellers.
The biggest question that the trading community asks is why blockchain is important for cryptocurrency transactions? Blockchain technology has an answer for this question. Because, it can provide some amazing features to run a cryptocurrency business or trading process.
Defining the blockchain
In a nutshell, blockchain is a technology for recording information of cryptocurrency transactions, such as a digital ledger. It is a kind of distributed ledger that stores the decentralized currency records in a digital format. Whenever a new transaction happens, a new block of data records the crypto transaction details, date, and time.
As an algorithm generates this data block, it is impossible to alter or hack this block. In blockchain technology, the process of cryptography connects the data blocks to each other. Whenever a block is run out of space, a new block connects to the previous block. In this way, blockchain stores the data in chronological order.
The blockchain can store maximum data which is hack-proof. So, you can instantly detect slight changes making this technology safe from any data tampering. Encryption of blockchain technology with public/private codes secures cryptocurrencies during any buying/selling transaction without any interference from financial organizations.
Working of blockchain
Blockchain technology works on three basic objectives which include transparency of data, decentralized platform, and security. Thus, all transactions that occur are saved and remain available on the blockchain. Every single detail is recorded in the blocks and the database is open to the public for cryptocurrency trading.
The decentralized feature is the core of the blockchain network and crypto trading. So, information is accessible to everyone who is linked with this technology. Because, decentralization removes the monopoly of any third-party entity.
No single organization owns the blockchain, making financial activities easy for buyers and sellers. blockchain works with a structured procedure by designing a perfect network that is impossible to get breached by any hacker. The cryptocurrency wallets and crypto vaults use blockchain technology to safeguard the details of buyers and sellers.
The demand for crypto-wallet companies is increasing rapidly due to the growth of digital coins internationally. Likewise, blockchain technology is the perfect platform for cryptocurrency businesses. As an emerging driver of cyber-security, blockchain shield data and prevent any sort of virtual fraud.
Types of blockchain
Here are the kinds of blockchain.
Let’s take a look on these classifications of blockchain.
Private blockchain
The controlled ledger network of private blockchain works in a closed virtual environment. Private blockchain is only available to private digital companies. Also, they just have limited access.
Public blockchain
One of the trending things in the crypto domain is public blockchain. Because all major cryptocurrency coins such as Bitcoin or Ethereum are working with this technology. Basically, they are creating a network of buyers and sellers for crypto trading in a secured virtual box.
Hybrid blockchain
The mixture of public blockchain and private blockchain is known as the hybrid blockchain. It is a flexible network for safekeeping private data and sharing ledger publicly on requirement at any time. Therefore, this blockchain system is gaining a worldwide embrace as numerous cryptocurrencies are now adapting this technology.
Consortium blockchain
The banks or governmental bureaus are slowly shifting towards consortium blockchain for exchanging information between multiple organizations. Regardless of a work in progress, this technology is gaining popularity as cryptocurrency expands globally. Because banks are slowly approving these digital coins as legal tenders these years.
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Difference between public and private blockchain
Public blockchain is used for mining or trading cryptocurrencies and the best example of this network is Bitcoin. Private blockchain is only restricted to private companies’ members which are used for digital assets details and identity recognition. Public blockchain can easily be operated by anyone after fulfilling some regulations, whereas, private blockchain is designed for the special business community who can only access the details. The private network blocks are not for the local community, and they’re mostly used to save data in cryptic vaults.
Functioning of hybrid blockchain
The hybrid blockchain is a mixture of private and public networks which have some distinct features. It is not available for everyone, but offers three key features of blockchain technology which include transparency, decentralization, and immutability. Hybrid blockchain uses the best parts of both public and private blockchain for finding the best solution to resolve any issue or delivering any service to the digital community.
Not only crypto trading companies, hybrid blockchain is beneficial for other sectors also. Industrial, manufacturing, or financial companies can integrate this system by replacing traditional data recording or saving techniques. There are some interesting details about hybrid blockchain working basics, which can help those who are fresh to this technology.
The hybrid blockchain follows a systematic approach while any transaction is made through this platform. Its customizable design enables registered members of this network to authorize specific people to enter in this blockchain. They have full authority to plan about which data can be shared publicly.
Transactions of E-currencies like Bitcoin remain private, but can be available to the public, if required by the sellers/buyers. Financial dealings of cryptocurrencies are immune from hackers, and have no chance of data tampering, thanks to the blockchain. The users who once enter into a hybrid blockchain network, can easily perform a transaction, and monitor the ledgers.
However, the identity of buyers or sellers remains secret to avoid any security breaching issues. Companies who use the hybrid blockchain network operate KYC (know your customer) procedure by identifying the registered sellers and buyers. Any unknown user in the blockchain ecosystem is prohibited from making any transactions. The public and private sectors assures that all the confidential information in the hybrid blockchain do not get leaked or they do not face any serious consequences.
Benefits of hybrid blockchain and how it works
There are some great advantages of adapting Hybrid Blockchain in any cryptocurrency exchange business for trading alt-coins.
- Hybrid Blockchain has a safe and close virtual Ecosystem that protects the information from leaking.
- The users of Hybrid Blockchain can make changes in the rules at any time with the rapid delivery of information to registered members.
- The best source to protect the privacy and assets of companies’ clients.
- According to research, more than 50% to 60% of hackers are blocked by those companies who are suing a Hybrid Blockchain platform.
- The lower cost to start a Hybrid Blockchain business or transaction made through this chain of networks demands fewer charges for any company which works with Blockchain.
Conclusion
Blockchain technology is one of the most brighter advancements that have the potential to shape and reform the finance world. It has the inherent ability to completely transform the traditional way of running business in several areas. By using Blockchain technology in day to day corporate activities, Dubai is elevating the ease of doing business factor considerably.
In case, you are a new entrepreneur in the blockchain business, then get a cryptocurrency license in Dubai. So, discuss with business advisors who have knowledge of dealing with DED, BRL, and DMCC. After all, they can help you in the licensing procedure to finalize your business deals.
They are your best bet for establishing a blockchain company in Dubai. Whether you want to begin a cryptocurrency business for introducing a new digital coin. Or you are ready to setup a crypto wallet or vault company.
Business consultants offer 360-degree services from company formation to licensing to tax filing. KWS Middle East is here to assist in realizing your dream of owning a blockchain business. Discuss with us now to go crypto soon.
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