How to register a cryptocurrency business in Dubai.

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Many entrepreneurs today seek to register a cryptocurrency business in the UAE. This is facilitated by an active state policy and well-developed legal regulation in the field of virtual asset application. Cryptocurrency operations in the country are completely legal. Cryptocurrency companies in the UAE are active market participants. They create jobs, obtain various types of licenses, and prevent money laundering.

Experts from The Level Consulting provide comprehensive advisory support for registering a cryptocurrency business in the UAE. Contact us to get detailed answers to your questions.

Advantages of obtaining a cryptocurrency license in the Free Zones of the Emirates

Registering cryptocurrency companies in the Emirates is beneficial because the country offers favorable business conditions, and cryptocurrencies have a clearly defined status in the legal field. The main advantages of registering a company and obtaining a cryptocurrency license in the free zones of Dubai include:

  • a rapidly developing economy and stable political environment;
  • easy registration and conduct of business – almost everything can be done online;
  • zero tax rates for most taxes;
  • absence of currency control, restrictions on financial services (Swift transfers, IBAN accounts);
  • the possibility of obtaining a residency visa through investment.
  • Regulation of crypto activities in Dubai

The regulation of cryptocurrency business is carried out by special authorities:

  • the Dubai Virtual Assets Regulator (VARA) and the Securities and Commodities Authority (SCA) (VARA is a new authority that issued the first licenses in 2020 to FTX Exchange FZE and Binance);
  • the Central Bank of the UAE (responsible for cryptocurrency issuance in Dubai);
  • local regulators in free zones.

There is no single law defining the procedure for registering and licensing cryptocurrency companies. Rules may vary slightly in different emirates and free zones.

Obtaining a license for crypto activities in DIFC and ADGM

Cryptocurrency activities in Dubai are divided into regulated and unregulated. Unregulated licensing includes businesses that manage financial flows for crypto startups, develop IT solutions for mining and crypto transactions, provide IT security and auditing, and other services. Regulated cryptocurrency business includes funds, asset management, exchanges, and exchanges.

The Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) issue the majority of licenses for cryptocurrency businesses in the UAE. In Abu Dhabi, the Abu Dhabi Global Market (ADGM) provides a comfortable business environment for companies working in digital banking and investments, insurance, consulting, technological startups, etc. The Financial Services Regulatory Authority (FSRA) regulates cryptocurrency licensing. A feature of the zone is that English common law applies within its territory, which is familiar to many international companies.

A reliable regulatory framework for crypto business is also provided in the Dubai International Financial Centre (DIFC). The free zone is among the top 10 largest financial centers globally according to the Global Financial Centres Index. Activity within the free zone is regulated by the DIFC Authority, the Dubai Financial Services Authority (DFSA), and the Dispute Resolution Authority (English common law court). The DFSA issues licenses for crypto businesses.

How to obtain a cryptocurrency license in DIFC and ADGM

A company registered in DIFC or ADGM can obtain a license corresponding to its business direction. First, it is necessary to determine the expected type of operations, assess their volume, and choose the most suitable legal form of organization based on this. The most popular type is LLC (Limited Liability Company).

After choosing the legal form of organization, the company should:

  • compile a business plan;
  • choose a legal address;
  • collect data on founders and managers;
  • open a bank account and deposit an amount equal to the authorized capital;
  • compile founding and registration documents;
  • assemble a document package, apply for registration, and pay the relevant fees;
  • register for taxation and hiring employees;
  • obtain licenses for regulated activities.

The registration procedure described above is approximate. Experts from The Level Consulting will help develop a specific action plan.

The algorithm for obtaining a crypto license in DIFC and ADGM is as follows:

  1. Determine the direction of activity and specify it (for example, preliminarily assess the type and volume of expected cryptocurrency transactions).
  2. Compile a business plan.
  3. Prepare documents and apply for registration in the free zone.
  4. Obtain a residency visa.
  5. Check compliance with the regulator's requirements for obtaining a license.
  6. Gather documents, submit them for review, and await a decision.

Requirements for acquiring a crypto license in DIFC and ADGM

A company applying for a crypto license must provide guarantees. The main requirements include:

  • Registration in one of the free zones that issues licenses. Foreign entrepreneurs often choose DIFC and ADGM.
  • Authorized capital – from 500 thousand to 30 million AED (the exact amount depends on the direction of activity).
  • Availability of a business plan for the next 3 years. The document is reviewed by the free zone authority.
  • Confirmation of staff qualifications (may be required for certain niches, such as consulting, IT direction in crypto business, etc.).
  • Development and implementation of CDD, KYC, AML programs.

To obtain a regulated license, it is mandatory to have a legal address and a real office – you need to rent or buy commercial real estate, not a flexi-desk.

How to Start and Run a Cryptocurrency Business in the UAE

The simplest way to start a business in the UAE is to choose an activity that does not require mandatory licensing. In this case, you need to register in a free zone, obtain a residency visa, open a bank account, and provide the necessary documents to the regulator. After that, you can start your operations. For some types of businesses, obtaining a regulated license is mandatory after registration. Only companies that meet the regulator's requirements can apply for it.

Preliminary Analysis

Before registering, it is necessary to specify the company's business direction and determine what type of license will be required: regulated or unregulated. At this stage, it is also necessary to prepare a business plan and a financial model for the company's development – these documents need to be provided to the regulator.

Obtaining an Unregulated License

To obtain an unregulated license, it is not necessary to contribute to the authorized capital or provide other financial guarantees. It is enough to register the business and prepare documents confirming the legality of the company's activities.

Obtaining a Regulated License

To obtain a regulated license, financial and technological guarantees, authorized capital, and confirmation of staff qualifications are required. It is necessary to ensure the stability and security of technological systems, implement effective procedures to combat money laundering, and after launching the business, regularly monitor, etc. All this needs to be documented. The regulator reviews the documents and then makes a decision on issuing the license.

Obtaining Residency and Opening Bank Accounts

Based on an investment in an innovative company of at least 500 thousand AED, you can obtain a residency visa for 5 years. To apply for a 10-year visa, you need to meet one of the following conditions:

  • found a startup in a business incubator (requires approval from the UAE Ministry of Economy);
  • become the owner of a company with an income of 1 million AED annually;
  • invest in a new business or buy an existing business for 2 million AED.

You can apply online on the ICP website.

Usually, not only the company's founder with the family but also key employees apply for a UAE residency visa for work. To obtain a UAE resident visa for work, a contract is required. In addition, foreign workers need to undergo a medical examination, purchase insurance, and confirm their qualifications.

After obtaining the residency visa, you should open a bank account for business and personal use. The bank always asks clients for documents confirming the presence and legality of funds – this is a requirement of the KYC security system.

Hiring Staff and Tax Registration

The nationality of employees does not matter: you can hire both UAE citizens and foreigners. Some companies have qualifications requirements for hired employees. After concluding employment contracts and obtaining visas, it is necessary to register for tax and become a tax resident of the UAE. To do this, you need to confirm that the administrative center of the company is located in the UAE.

Compliance with Legal Requirements for Business

Business representatives must comply with the requirements of the current legislation of the UAE. It is necessary to implement AML (anti-money laundering) and KYC (know your customer) rules, conduct accounting. Companies are required to identify the risks of crimes within their activities, not conduct transactions under anonymous or fictitious names, keep records of all operations, and provide them to competent authorities upon request. Penalties are provided for non-compliance with legal requirements for cryptocurrency businesses.

When registering a cryptocurrency company in Dubai or Abu Dhabi, it is important to act consistently, taking into account the rules for conducting operations within the country and beyond its borders. To reduce risks and protect your business from possible mistakes, seek support for registering a cryptocurrency business – contact The Level Consulting.

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