Dubai is the premier financial province in the UAE and is now emerging as one of the best jurisdictions for cryptocurrency trading in the world. UAE citizens can own cryptocurrencies and deposit them in e-Wallets and trade on digital exchange platforms both inside the UAE and abroad.
Feel free to contact a Apexum professional representative for your Crypto regulation in AUE
How to open a crypto company in the UAE
You must have a registered company in a free zone such as International Free Zone Authority (IFZA) in Dubai, with a physical location that acts as your registered office, either in owned or leased premises or in a virtual office. As well, you must have a corporate bank account in a recognised trading bank inside the UAE. A proof of residence, together with the corporate licence, will be required by the bank in which you must open a company account.
With the company set up and registered with its trade licence, and a bank account opened, you can then apply for a cryptocurrency trading licence in Dubai from the free zone authority where your company is registered.
Changes in the rules for cryptocurrency exchanges in Dubai
The Virtual Assets Regulation Law (VAL) was passed at the end of February, 2022. It sets up a regulatory body – the Virtual Assets Regulatory Authority (VARA) that governs trading in the cryptocurrency and digital assets market in the region.
VARA is responsible for regulating the sale of virtual assets and tokens and regulating and authorising virtual currency exchanges.
Getting a cryptocurrency trading licence in the UAE
The UAE presents particular advantages for investors in crypto exchanges because it levies zero tax on company profits and allows full repatriation of profits without withholding tax.
There are no minimum fees that cryptocurrency exchanges must charge. Companies that have set up in a free zone such as the Dubai International Financial Centre or the International Free Zone Authority (IFZA) in Dubai will be able to open a crypto company in the UAE and offer services in a wide range of cryptocurrencies. Bitcoin, Litecoin, Ethereum and many others can be bought, customers ae allowed to store these assets in e-wallets and trade between themselves as well as swap for fiat currencies and vice-versa.
BaaS (Banking as a Service) is now a fundamental part of banking in the UAE, and is part of the attraction of Dubai.
When you have registered a company in a Dubai free zone and succeeded in opening a bank account with a local commercial bank, you can expect a licence to be given within two to three weeks. With that licence, you will be able to start providing your services as a cryptocurrency exchange.
What is the purpose of a cryptocurrency licence in the UAE?
Citizens and residents of the UAE are allowed to hold and trade cryptocurrencies on their own behalf. However, they are not allowed to act as agents or brokers, exchanging crypto assets on behalf of third parties, or to swap crypto to crypto, crypto to fiat or fiat to crypto. As well, a private individual cannot transfer the proceeds of crypto transactions to third parties through their bank account.
The only way a company can act as an agent or broker in the crypto exchange market is by obtaining an authorised cryptocurrency licence in the UAE.
Is crypto tax free in the UAE?
There are no taxes or levies on cryptocurrency transactions. As well, profits made on transactions by corporations registered in a free zone in UAE Emirates like Dubai or others are also entirely free of tax.
How much does a crypto licence in the UAE cost?
Each step in the process of setting up a company that is allowed to trade cryptocurrencies has its own cost. The individual costs will depend on the choices that you make. The most important options are:
Mainland or free zone operation: Mainland company registration is more expensive than all free zones. The advantage of a mainland company licence is that the company can conduct business with both UAE businesses and government, can bid for government contracts, and can trade with foreign businesses. Free zone companies can only conduct business with companies registered in a free zone or that are outside of the UAE and cannot perform services or sell goods to the UAE government..
Location: A free zone sets its own charge for applications for its version of the cryptocurrency licence in the UAE. Many free zones have restrictions and limitations of the kinds of business that can be conducted with their licence.
Each free zone will charge a set fee to issue a crypto licence. This can be somewhere between €9,000 and €15,000 according to the type of service your company will be providing.