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How to start a blockchain company in Dubai?

How to start a blockchain company in Dubai?
January 24, 2024

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Blockchain and cryptocurrencies may feel exceptionally new concepts to some entrepreneurs globally. However, they already have a huge potential in the UAE market in 2024. 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.

Defining the blockchain

What is 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

How does blockchain work?

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

What are the types of blockchain?

Here are the kinds of blockchain.

  1. Private blockchain
  2. Public blockchain
  3. Hybrid blockchain
  4. Consortium 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.

Importance of blockchain for cryptocurrency business

Why is blockchain important 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.

Why is blockchain important for cryptocurrency business?
Why is blockchain important for cryptocurrency business?

Advantages of blockchain for cryptocurrency businesses

Which are the advantages of blockchain for cryptocurrency businesses?

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

Considerations to launch a blockchain company in Dubai

What are the things to consider to launch a blockchain company in Dubai?

These are the things you must consider before you start a blockchain company.

Now, 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.

Steps to start a blockchain company in the UAE

Which are the steps to start a blockchain company in the UAE?

These are the steps to start a blockchain company in Dubai.

Next, we take a look at the step-by-step process to start a blockchain company.

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 crypto 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 license 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

Overview of blockchain business growth in Dubai

Can you share stats that showcase blockchain business growth 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 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.

Conclusion

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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