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 Unicorn Global Solutions 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 centralized issuing or regulatory authority. Instead, it operates on a decentralized 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 include:
– Bitcoin
– Ethereum
– Solana
– Litecoin
– Ripple
Overview of Crypto Regulation in UAE
– Project time frames: 4 to 6 months
– State fee for application: $25,000 USD
– Required share capital: from $100,000 USD
– Corporate income tax: 9%
– Annual supervision fee: $50,000 USD
– Local staff member: AML Officer & Director
– Physical office: Required
– Accounting audit: Required
– Sustainability: Sustainable
– Bank account options: Some 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:
- Regulated Jurisdiction: Operating within Dubai’s regulated jurisdiction ensures adherence to international AML and KYC standards, bolstering customer trust and reducing regulatory risks.
- Market Access: With a Dubai crypto license, companies tap into a vast international market, fostering business expansion, foreign investments, and global partnerships.
- Favorable Tax Policy: Dubai’s favorable tax policy, including no income tax for companies and individual entrepreneurs, creates an enticing economic environment for crypto businesses.
- Transparent Regulations: Dubai offers a transparent regulatory landscape, actively backing fintech and blockchain innovations. This clarity reduces legal risks and aids in business planning.
- Enhanced Reputation: A Dubai license boosts a company’s global reputation. Operating in this innovative financial hub signals reliability, attracting new clients and partners.
What is the DWTC Free Zone?
The Dubai World Trade Centre (DWTC) Free Zone is a special area within Dubai that offers businesses a supportive operating environment. DWTC provides easy business setup, licensing, and operations processes, along with 100% foreign ownership, no currency restrictions, and tax exemptions. 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
- Maintain Funds: Maintain funds to cover operating expenses for six to twelve months as regulations require.
- Security: Focus on keeping virtual assets safe and customer data with encryption tech, multifactor authentication, and preventing unauthorized access.
- Reporting: Submit proper and timely financial and operational reports to maintain transparency and regulatory compliance.
- Documentation: The owner must provide passport copies for a crypto exchange license in Dubai.
- Compliance: Adhere to Anti-Money Laundering/Combating the Financing of Terrorism regulations, including customer registration, identity verification, and background checks.
Important Considerations Before Starting Your Crypto Business in Dubai, UAE
- 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 or consider starting through a representative office in Dubai.
- Regulatory Compliance: Ensure that your crypto business adheres to regulations set by VARA under the Dubai World Trade Centre (DWTC).
- 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 Unicorn Global Solutions’ 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 Unicorn Global Solutions’ experts to open a bank account for your crypto consultancy business in Dubai.
How to Get a DWTC Crypto License?
- Document Submission: Include all documents requested by the DWTC Authority. Additional documents or information may be requested based on the DWTC Authorities.
- Get Initial Approval: Submit a completed Initial Approval VASP Questionnaire (VARA form) and get pre-approval from VARA. Pay the DWTC Authority fee.
- Corporate Document Signing: Sign the Memorandum and Articles of Association with the required capital set by the DWTC Authority.
- Office Lease Submission: Provide a copy of the lease agreement for a private physical office. Demonstrate details of the premises leased for use as the applicant’s registered office within the Free Zone.
- Get Non-Operational Virtual Assets License: After fulfilling the mandatory requirements, the DWTC Authority will issue the applicant a Non-Operational Virtual Asset License.
- Operational License Issuance: Obtain a VASP license/exemption from VARA to conduct virtual asset activities. The DWTC Authority issues an Operational License.
Cryptocurrency Regulations and Risks in the UAE
– Regulatory Framework:
– Regulatory Bodies: Enforce regulations for various cryptocurrency-related activities.
– Licensing: SCA oversees crypto licenses issued by DAFZA. ADGM Free Zone follows SCA regulations, with direct oversight from the FSRA.
– Monitoring: Authorities closely monitor cryptocurrency and blockchain businesses to deter money laundering and illicit activities.
– Risks Associated with Crypto Assets:
– Recognized Risks: Financial laundering and sponsorship of terrorism.
– Compliance Requirements: Develop rules based on UAE laws, ADGM guidelines, and FATF best practices. Compliance with global risk mitigation and transparency standards.
– 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.
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 Unicorn Global Solutions experts.
DWTC’s Package Offered by Unicorn Global Solutions
Unicorn Global Solutions offers a package for Dubai’s Crypto market with DWTC, including:
– Co-working space access
– Visa quotas
– 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:
– DWTC Crypto License: Established in 2015, designed to serve innovative industries such as virtual assets, cryptocurrency, and blockchain.
– Crypto License at 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: Offers opportunities for cryptocurrency entrepreneurs in collaboration with Dubai’s Securities Commodity Authority (SCA).
– Cryptocurrency License at DAFZA: Facilitates cryptocurrency trading and related services for businesses within its jurisdiction.
– Crypto License in ADGM: Offers a regulatory framework focusing on various activities associated with crypto assets.
Tax Implications for Cryptocurrency Businesses in the UAE
Crypto currency 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, Unicorn Global Solutions offers consultation services, especially for cryptocurrency businesses.
Start Your Crypto Business with Unicorn Global Solutions
Getting a crypto license in Dubai allows you to earn profits in DWTC crypto. With Unicorn Global Solutions’ 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 Unicorn Global Solutions’ corporate advisors.
By following this comprehensive guide, you can navigate the process of securing a DWTC Crypto License in Dubai and take advantage of the numerous benefits offered by this innovative financial hub. Contact Unicorn Global Solutions today to begin your journey into the world of cryptocurrency trading in Dubai. Text us on WhatsApp or call us today.
