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How to get cryptocurrency trading license in Dubai

How to get cryptocurrency trading license in Dubai
February 19, 2024

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The Middle East is becoming a central hub of crypto companies. Dubai (the marvel of UAE) is turning into a diversified place for exploring business opportunities in the blockchain domain. So, you can get cryptocurrency trading license in Dubai to tap into this thriving market during 2024.

As Dubai is quick to adopt new technologies, entrepreneurs globally are looking to drive into its growing crypto market. For boosting this developing sector, the UAE government is issuing cryptocurrency licenses. Thus, it is enabling all kinds of crypto trading, buying, and monitoring.

Revenue in the UAE’s cryptocurrency market is forecast to reach $395.8m by 2028 from $239.9m in 2023 at 10.53% CAGR. It is a prove that Dubai is blooming as a popular destination for cryptocurrency companies. Therefore, setting up a business for cryptocurrency is a great money-making idea these days.

In this article, we’re going to assist you with some valuable information to get a cryptocurrency trading license in Dubai.

Defining the cryptocurrency license

What is a cryptocurrency license?

In essence, a cryptocurrency license is a permit to complete all major crypto activities. The cryptocurrency trading license falls in the category of the commercial license. So, it is necessary for the trading of Bitcoin or other alt-coins.

There are two ways to attain the cryptocurrency license in Dubai. You can get and submit the cryptocurrency license application form online. Otherwise, you can do it offline through business consultants to acquire and file your paperwork for a cryptocurrency license.

United Arab Emirates is becoming one of the best cryptocurrency markets in the world. The rise of cryptocurrency firms here is changing the financial landscape and encouraging entrepreneurs to start their business in Dubai. Until 2020, the cryptocurrency market capitalization was $265 billion, with $6 billion bitcoin transactions making Dubai the main business center.

UAE is one of the few countries where dealing in cryptocurrencies is legal. However, to start your cryptocurrency firm in Dubai, a commercial license is a must. Three major departments assess the credibility of your company to establish your cryptocurrency business.

They are DMCC, Business Registration and Licensing (BRL), and Dubai Department of Economic Development (DED). Getting a crypto permit after approval from these departments, companies can legally trade and manage their crypto transactions or assets. Emirati nationals and expats can establish their crypto or blockchain business by following some easy rules and regulations.

Cryptocurrency license
Cryptocurrency license

Key types of cryptocurrency licenses in Dubai

Which are main types of cryptocurrency licenses in Dubai?

If you’re considering UAE to open your first cryptocurrency business, then Dubai is the perfect move for you. Dubai government is transforming the business activities, supply chain management, payment transactions, and commodities tokenizations. These are the leading types of licenses for cryptocurrency businesses in Dubai.

Now, we briefly look upon these kinds of cryptocurrency licenses in Dubai.

Crypto trading license

A cryptocurrency trading license allows entities to perform proprietary trading in crypto communities. The crypto trading license lets you do activities like buying and selling of commodities on the digital ledger technology applications. Nevertheless, just like any other business in Dubai, you have to obtain a trading license for your crypto venture.

You are eligible to run the crypto trading business only when you get approval from the free zone management. Besides, this is a standalone license, which means you can not conduct other business activities under the same roof. Also, ensure the minimum capital is around AED 50,000.

Distributed ledger technology service license

Under this license, companies can provide distributed ledger technology as blockchain. Likewise, they can provide database management services, digital banking/finance, and supporting cloud services. This license requires a minimum capital of AED 50,000 as well.

Crypto exchange license

This license is for the companies that are into crypto exchange, crypto brokerage, and crypto marketplace. Also, they have a track record for investing and maintaining portals for exchanging cryptocurrencies like Bitcoin and alt coins. Crypto exchanges like Binance and Coinbase are the popular examples.

Scope of cryptocurrency trading in Dubai

What is the scope of cryptocurrency trading in Dubai?

UAE is popular for adapting to new technological advancements like cryptocurrency sector. Furthermore, the cryptocurrency business in Dubai is a growing industry right now. Dubai is establishing itself as a hub for blockchain technology and cryptocurrency businesses.

One of the reasons Dubai has become so famous in the business world is the tax free zones. They make Dubai the perfect place for cryptocurrency companies to set up their operations. An example of the promising crypto landscape in Dubai is the unveiling of Blockchain Strategy 2021.

It puts special focus on foreign entrepreneurs, so they can pursue trade and business in a lawful way. Additionally, it aims to convert the 50% of the government transaction to a blockchain platform capitalizing on the technology. Also, the UAE government is devising regulatory frameworks for cryptocurrency businesses to attract more foreign investments.

Importance of obtaining cryptocurrency license in Dubai

Why is acquiring cryptocurrency license in Dubai important?

For companies planning to trade cryptocurrencies in Dubai, it is necessary to get the proper licensing to operate legally. Thus, to start a crypto business in the UAE, you need to obtain a trade license from the authorities. A crypto license in Dubai is a commercial license to perform commercial business activities including the crypto trading process.

Having a crypto trade license in Dubai allows companies wishing to offer products or services related to digital currencies. For example, trading, mining, and exchanging of cryptocurrencies. Bitcoin, Dogecoin, Ethereum, Tether, and Polkadot are some of the popular cryptocurrencies in the UAE market.

Cryptocurrency trading license is leading to more business opportunities and higher revenues. Similarly, the incredible growth of the popular cryptocurrency Bitcoin in Dubai represents how lucrative this cryptocurrency business can become. Dubai is one of the most welcoming places for cryptocurrency business, and is becoming a leading global commodities trade hub.

Cryptocurrency trading license
Cryptocurrency trading license

Key requirements for obtaining crypto license in Dubai

What are requirements of cryptocurrency license in Dubai?

UAE authorities regulate crypto trading in Dubai, with the same laws as other traditional businesses are. These are requirements by the government that you should meet for obtaining a crypto license in Dubai. Not following these requirements may lead to other technical difficulties, including blacklisting from doing international trade business.

  • Collect and fill out a commercial license form through the DED in Dubai.
  • Also, having a crypto business plan is a must.
  • You have to submit valid passport copies for all the members & shareholders who are participating in your business activities.
  • Having a completely clean crypto wallet with no fraudulent activity or transaction assures you of a seamless licensing process.
  • Make your business capital resources & whole operational activities visible for a minimum of 6 to 12 months of operation.
  • Incorporate all the crypto assets you are going to trade with the UAE free zone departments.
  • A clean track record is compulsory, and no deceitful activities are permissible.
Key requirements for obtaining Crypto license in Dubai
Key requirements for obtaining Crypto license in Dubai

Free zones offering cryptocurrency licenses in UAE

Which free zones in Dubai provide cryptocurrency business license?

In terms of taxation of blockchain or cryptocurrency trading companies, you don’t require to pay any income or personal tax. Because, there is no tax for the crypto startup or trading firms in the free zones and mainland of Dubai. Here are some of the best free zones in Dubai that offer cryptocurrency trading license to entrepreneurs with tax perks.

Next, we take a look on a few of the free zones who provide cryptocurrency trading licenses.

DMCC (Dubai Multi-Commodities Center)

Dubai Multi Commodities Center (DMCC) as one of the popular free zones is leading the way in supporting crypto businesses. DMCC has won the Global Free Zone of the Year award by the FDI Magazine (from the Financial Times) for the record ninth consecutive year in 2023. After all, it is working hard to create a crypto ecosystem that caters to this specific industry.

DMCC began its journey in 2020 in the crypto industry by launching DigitalSugar to boost the sugar trade in Dubai. In 2021, DMCC authorities signed an initial agreement with Security & Commodities Authority (SCA). Accordingly, this agreement enables individuals to apply for a crypto trading license for their venture for DMCC crypto trading.

Crypto Trade Center by DMCC enables UAE investors and foreign entrepreneurs for setting up blockchain firms and cryptocurrency businesses. It supports them by providing a regulatory environment, plenty of industry talent, access to crypto resources, and capital. Thus, it is working as a central hub for the development and implementation of applications for crypto and blockchain technology.

DMCC is very open to offering a crypto trade license to business entrepreneurs with very minimal steps. Hence, they offer customized business licenses depending on the crypto assets, and activities. DMCC is home to more than 20,000 companies for offering, issuing, and trading crypto assets.

By obtaining a DMCC crypto license you can perform business activities. For instance, trading currencies, storing crypto assets, delivering crypto-related services, developing and managing new crypto software, etc. On top of that, you can provide business consulting services with this DMCC crypto license. DMCC license is now available to crypto businesses, allowing them to buy/sell digital currencies and tokenized assets.

DAFZ (Dubai Airport Free Zone)

DAFZ provides a strong framework for providing licenses to regulate crypto business. Thus, to support crypto entrepreneurs, Dubai Airport Free Zone Authority holds agreements with the Securities and Commodities Authority (SCA). Therefore, companies with a crypto license by DAFZA can offer services to the international investors around the world.

Subsequently, you can perform various activities with your crypto assets. Now, they are looking forward to paying a part in the the growth of cryptocurrencies. Such as Bitcoin, Dogecoin, Ethereum, etc.

ADGM (Abu Dhabi Global Market)

ADGM is a free zone to allow operating crypto business under regulation of Financial Services Regulatory Authority (FSRA). Presently, it is the only legal body that provides a large-scale legal regulatory framework for the crypto license in UAE. Thus, Abu Dhabi Global Market follows the Crypto Assets Activities Regulations guidelines by the FSRA. So, this comprehensive framework for crypto license issuing & trading in the UAE, is spreading the business around the country.

Procedure for seeking a crypto license in Dubai

What is the process of getting a crypto license in Dubai?

The process of getting a crypto license in Dubai is comparatively easy than any other business license. Because, the UAE government is continuously working on approving the laws and drafting the legal frameworks. These are the steps to attain cryptocurrency trading license in Dubai to improve the crypto brokerage and blockchain technology services.

  • Pick a crypto license registration form from the respective free zone authority where you wish to cater service and fill out the form.
  • Attach all the relevant documents of the shareholders including the copy of passports/photographs and submit the application.
  • The next step is to submit all the legal documents of your business to the local DMCC free zone landowners.
  • As per the business requirements, choose a suitable office space, and prepare the tenancy agreement.
  • After submitting all the necessary documents, complete the payments for the crypto license and office rent to the authority.
  • If everything is OK, then the company will get the license within a few months after approval.
  • Afterwards, apply for the UAE residence visa, and open a corporate bank account for executing the transactions.

Business plan for cryptocurrency license

How should business plan for cryptocurrency license look?

The business plan for cryptocurrency trading license can comprise these sections.

Now, we fleetingly discuss these parts of the business plan.

Business idea

Describe your business project, and the way you will manage the operational activities to achieve short-term and long-term goals.

Financial proposal

Write your financial proposal to disclose how you will raise the capital and what are the sources for your funds. Besides, the funding strategy must include the details about the investors in your cryptocurrency business. In case, you are doing self-investment then submit all the necessary personal documents.

The cryptocurrency trading business comes with several numerous risks. So, you need to provide a pre-set method to tackle risk in this business. Your financial proposal must demonstrate how you will go about managing your expanses.

Execution strategy

Note down what will be the strategy you will apply to run your business plan. What kinds of cryptocurrencies you will be trading or mining? How you will compete with your rivals in the market?

Main advantages of cryptocurrency license in Dubai

What are key benefits of cryptocurrency license in Dubai?

To begin a legitimate business venture in Dubai and the UAE, you go through some legal frameworks and licensing. Similarly, using cryptocurrency license, you can buy and sell crypto commodities on the blockchain technology applications. Here are the significant perks of gaining cryptocurrency license in Dubai.

  • Safe & quick cryptocurrency license
  • No minimum requirement for business capital
  • License cost starting from 12000 USD (45000 AED)* minimum
  • Physical office space or not (dependent on the need)
  • Provision of crypto license in 3 months*
Crypto licensing
Crypto licensing

(Terms & conditions apply)

Disadvantages of not availing a crypto license in Dubai

Which are the drawbacks of not getting a crypto license in Dubai?

To trade Bitcoins and other cryptocurrencies, you need a trading license, which is also known as a commercial license. Also, this license is applicable to companies offering products/services for digital currencies, such as trading, mining, and exchanging cryptocurrencies. These are the downsides of not getting a crypto license in Dubai, as you miss on making money big time.

  • UAE government holds a right to revoke your visa, put restrictions, and impose travel limitations.
  • You can not deal with any local sponsors, and there is a chance that your business may have to shut down.
  • Authorities can expel all the managers of your crypto firm, shareholders, and even the owners from Dubai.
  • You have to pay a heavy amount of fine to the UAE government, otherwise it can seize your company’s assets.
  • Blacklisting of your crypto company can result in the blockage of all local and foreign business activities.

Steps to acquire crypto license in DMCC

What are the steps to acquire crypto license in DMCC?

Dubai is working tirelessly to position itself as the leading global commodities trade hub. Henceforth, free trade zones like DMCC are broadening the cryptocurrency landscape. Nonetheless, here are the steps to attain crypto license in DMCC free zone in Dubai.

  • Step 1: Select a preferable crypto activity in Dubai that resonates with your business goal.
  • Step 2: Choose your perfect legal structure from sole proprietorship, LLC, one person company, corporation, etc. under the DED legal jurisdiction.
  • Step 3: Pick a fitting trade name that is still available for registration, and is relevant to your business activity. However, it must not relate to politics, doesn’t hurt any religious value, doesn’t have any reference to any well-known organization.
  • Step 4: The next step is to submit the crypto registration form to the DMCC authority.
  • Step 5: Submit the relevant documents of the shareholders, copies of passports/photographs, business plan, with the minimum capital.
  • Step 6: As per the business requirements, get the appropriate office at the DMCC Crypto center.
  • Step 7: Pay the crypto license fees and the office rent to the DMCC.
  • Step 8: If the DMCC authority doesn’t find anything objectionable, then it will issue the license.
Crypto license in DMCC
Crypto license in DMCC

Conclusion

Just in case, you are new in the crypto vertical, and are hunting the best place to invest in. Then, it is high time to set up a cryptocurrency trading business in Dubai. So, to obtain a cryptocurrency trading license without any problem, seek help from the professional business consultants in Dubai.

Thus, they can assist you to gather vital documents for a cryptocurrency license. Besides, they support you in submitting your paperwork to the authorities. Rather, they can complete the whole process on behalf of your company.

Business consultants can assist
Business consultants can assist

They have the complete knowledge about license-providing companies like DED, BRL, and DMCC. Therefore, avail the business consulting service that provides all kinds of company registration services like offshore company formation in Dubai. Also, get assistance in business support (trade license, visa service, legal correspondence, trademark registration, company liquidation, finding local sponsors) etc.

Do you want to become a new entrepreneur in the crypto space? KWS Middle East is here to work as your guide in all stages to get cryptocurrency trading license in Dubai. So, hop on a call or email us to begin your smooth journey now.

KWS Middle East can help
KWS Middle East can help

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