With Bitcoin recently reaching record highs, the world of crypto investments is again making headlines. And it’s not hard to see why the subject garners such interest.
A USD 100 investment in the world’s largest cryptocurrency around a decade ago would now be worth in excess of USD 50m. Of course, a high tide raises all boats, and many other currencies have seen similar trajectories over the same period. What’s more, many investors are continuing to see enormous returns on newly launched coins.
As the UAE fast becomes one of the world’s major crypto trading hubs, regulation has been introduced to ensure fairness and transparency. So, if you’re planning to start a business in this area, here’s an overview of what you’ll need to know before you get started.
Understanding UAE’s cryptocurrency regulations
The MENA region is home to one of the fastest-growing crypto trading industries, with over 1,800 organisations employing almost 9,000 people as of 2023. Within that, the UAE is leading the way, balancing innovation with regulation to support a robust and stable market.
In 2022, Dubai introduced the Virtual Asset Regulatory Authority (VARA), focused exclusively on regulating digital assets. It is responsible for overseeing the provision and sale of virtual currency and setting out its legal characteristics and proprietary nature, along with how such assets can be controlled, managed and transferred.
To this end, VARA has issued a clear set of rules to form a comprehensive digital asset framework, covering everything from the provision of activities and services to custody, brokerage and exchange services.
This world-first independent regulator for digital assets has attracted numerous new and established crypto businesses to Dubai. As a result, the emirate now boasts one of the world’s most vibrant and active virtual currency ecosystems.
Many of the industry’s biggest names, from Binance to Laser Digital, now have a presence in the UAE and are under the regulation of VARA. Hundreds more are expected to come under its watch in the year ahead.
The trading of cryptocurrencies is also regulated more widely by the UAE’s Securities and Commodities Authority (SCA). The SCA has published several regulations in recent years. Most importantly, the SCA stipulates that anyone wishing to conduct crypto-related business activities onshore in the UAE requires the appropriate license.
Activities requiring a license include the provision of virtual asset platforms and management services, exchange and broker services, the provision of services related to virtual asset wallets, and all virtual token trading services.
How to start a crypto business in the UAE: step-by-step
The exact process for starting a crypto business in the UAE will depend on the nature of your intended activities. In most cases, however, establishing a new company involves five key steps.
As with any important business undertaking, it’s vital to understand each stage of the process. That’s why it pays to work with a local expert like Creative Zone. Our dedicated team can guide and support you at every step.
Step 1: Choose your business activity
First, you will need to decide on the type of crypto business you wish to start. This could be trading, brokerage or exchange, or running a wallet or token platform.
The team at Creative Zone can assist in deciding on the most suitable activities for your business.
Step 2: Choose your preferred location
Next, you will need to decide where you wish to start your business. There are plenty of options available. Dubai is home to numerous appropriate free zones for crypto-related businesses. You may even wish to set up in another emirate.
The right location for your operation will depend on many factors, from your business activities and company size to your required services and amenities.
Step 3: Choose a company name
With hundreds of crypto businesses trading in the UAE, it’s important to choose a name that helps you stand out. But that’s not all. The UAE also publishes set naming criteria for its businesses. In short, this means your name must not contain any offensive or blasphemous language or reference an existing company or entity.
Step 4: Prepare your documents
At this stage, your dedicated contact at Creative Zone will help you compile all required documents before submission. This will include your completed application form, passport copies, visa information and a lease agreement or business plan if required.
Step 5: Obtain your trade license
Once again, the Creative Zone team will handle the submission of your application, liaising with all relevant regulators and government bodies as required. To operate a crypto business in Dubai, you need a trade license and approval from the SCA or VARA. Once all are in hand, you are ready to start trading in the UAE.
Where to get a cryptocurrency license in Dubai?
There are several finance-focused free zones in the UAE that cater to digital asset businesses. Along with industry-related facilities, these free zones also offer benefits such as zero currency restrictions and the freedom to repatriate capital and profits.
Popular free zones for crypto businesses include:
Dubai Multi-Commodities Centre (DMCC)
DMCC welcomes a wide range of cryptocurrency-related business activities, including trading, storage and consultancy. The free zone aims to become Dubai’s premier hub for blockchain activities and issues many types of crypto trade licenses.
Dubai Airport Free Zone Authority (DAFZA)
Under the regulation of the SCA, DAFZA supports all kinds of cryptocurrency business activities in its jurisdiction. With direct links to one of Dubai’s international airports, it is ideal for entrepreneurs who regularly travel overseas to other markets.
Dubai International Finance Centre (DIFC)
DIFC operates its own regulatory framework, the Crypto Token Regime. This allows the free zone to issue licenses for all manner of related activities, including trading, digital wallets, digital asset management, consultancy and much more.
Abu Dhabi Global Market (ADGM)
Outside of Dubai, Abu Dhabi’s ADGM regulates cryptocurrency assets and activities under the emirate’s Financial Services Regulatory Authority (FRSA). As well as issuing licenses, ADGM provides a comprehensive regulatory framework and offers guidance on expanding crypto operations throughout the wider UAE.
As packages and offers regularly change, it is always a good idea to work with a registered company formation agent when setting up anywhere in the UAE. Get in touch with Creative Zone for the latest deals at these free zones and many more.
About Creative Zone
There is a world of opportunity on offer for cryptocurrency trading businesses in Dubai and the wider UAE. But before diving in, it’s crucial to fully understand the industry, its regulations and the permits and licenses required.
Creative Zone can help. Our team of company formation experts can streamline the process of starting a cryptocurrency business. Whatever your chosen activity, we’re here to help with every step of the process, from trade name registration and license applications to visa and compliance support.
So, if you’re looking to launch a cryptocurrency business in the UAE, there’s no better place to start than Creative Zone. Get in touch with the team today to find out more.
