The United Arab Emirates (UAE), particularly Dubai, has positioned itself as a global leader in crypto licensing and regulation. Its favorable business environment, transparent legal framework, and government commitment to fintech innovation make it a top destination for cryptocurrency and blockchain businesses. At Al Riyami Advocates & Muhyealdeen International Legal Consultants, we guide companies through each step of securing a crypto license in the UAE, ensuring compliance and a smooth setup.
Crypto Licensing Services in the UAE
Advantages of Obtaining a
Crypto License in the UAE?
Tax Efficiency
The UAE offers a 0% corporate income tax rate and no taxation on personal income derived from international activities, along with tax-free repatriation of profits..
Regulatory Support for Innovation
The UAE government actively supports fintech and blockchain projects, including ambitions for 50% of government transactions on blockchain by 2021.
Ease of International Operations
As a business hub with no currency restrictions, double-taxation treaties, and an open economy, the UAE provides a solid foundation for global crypto activities.
Step-by-Step Guide to Obtaining a Crypto License
Step 1
Establish a Legal Entity and Choose a Name
Begin by registering your business entity and selecting a name. Our team assists with the documentation and ensures compliance with local naming conventions.
Step 2
Choose a Jurisdiction
Depending on your business’s focus, we help you select the ideal economic zone, considering factors like licensing requirements, financial incentives, and regulatory specifics.
Step 3
Meet Financial and Compliance Requirements
Minimum capital requirements, KYC (Know Your Customer) protocols, and AML (Anti-Money Laundering) procedures must be established in accordance with UAE law.
Step 4
Gather Documentation
Essential documents include a business plan, founder certifications, and an AML/CFT policy. Our experts manage document preparation and verification for seamless submission.
Step 5
Apply for Your License
We facilitate communication with regulatory bodies, including the FSRA (Financial Services Regulatory Authority) and SCA (Securities and Commodities Authority), ensuring full compliance for a positive outcome.
Requirements associated with a
crypto trading business in the UAE
To start a crypto business in the UAE, certain requirements must be met. Here are some of them:
- Companies must ensure a high level of security and protection of virtual assets and customers’ data. This includes the use of modern encryption technology, multifactor authentication, and measures to prevent unauthorized access.
- To obtain a crypto exchange license in Dubai, you must provide copies of the passports of all founders.
- Companies are required to conduct customer registration and identification procedures by AML/CFT. This includes verifying the identity of customers, collecting relevant documents, and conducting criminal background check procedures.
- Accurate and timely reporting, including financial reports, operational data, and other information required by the regulator, must be maintained. This helps ensure transparency and control over cryptocurrency transactions.
- Companies may be subject to regular audits and compliance reviews by VARA or other regulatory agencies. The purpose of these audits is to ensure that companies comply with all requirements and regulations imposed. If violations or deficiencies are found, appropriate action may be taken, including fines, activity restrictions, or license revocation.
- You must make financial resources and other operating expenses available for six to twelve months.
- You must actively cooperate with regulators and provide them with necessary information and reporting when requested. This includes cooperation if suspicious transactions are investigated or misconduct occurs.
- Companies must develop and implement clear internal policies and procedures that cover all aspects of their cryptocurrency activities. This includes establishing rules for transaction processing, risk management, compliance controls, and staff training.
Regulations and Compliance
Key Compliance Requirements
Every crypto company in the UAE must meet specific regulatory standards:
- AML and KYC: Companies are mandated to conduct due diligence on all clients, adhere to AML/CFT protocols, and retain accurate records.
- Transparency and Reporting: Regular audits, financial disclosures, and transaction logs are required for transparency and regulatory adherence.
- Security Protocols: High-level data encryption, customer data security, and multifactor authentication systems are compulsory.
The Role of VARA
The Virtual Asset Regulatory Authority (VARA) supervises all crypto-related activities in Dubai. For companies looking to operate in Dubai, VARA enforces compliance with the Virtual Assets and Related Activities Regulations (effective since February 7, 2023). This includes ongoing monitoring of business practices, customer protection, and adherence to international AML guidelines.
Benefits of Working with Al Riyami Advocates & Muhyealdeen
Experienced Legal Team
With in-depth knowledge of UAE crypto regulations, we handle each step from registration to compliance, ensuring a straightforward licensing process.
End-to-End Support
Our legal services cover entity formation, jurisdiction selection, documentation, and compliance guidance.
Dedicated Compliance Assistance
We assist clients in implementing effective AML, KYC, and CFT procedures, helping to safeguard their business and build regulatory trust.
Types of crypto licenses in the UAE
The current government provides for regulated and unregulated activities of crypto companies
The license requirements, conditions, and possibilities depend on the chosen economic zone. After registering a license, you will be able to issue digital currencies, make exchanges, manage your assets, register a cryptocurrency exchange, and conduct brokerage activities
You can get a crypto license in UAE in the following zones: DMCC, DAFZA, ADGM, DWTC, IFZA
Let’s take a closer look at opening each type of crypto company in the UAE
Crypto license at DMCC
DMCC (Dubai Multi Commodities Center) is a free economic zone and one of the most popular cryptocurrency businesses in the UAE. Getting a cryptocurrency license in Dubai is available at DMCC and guarantees the legality of your business. The first company to open this license and provide cold storage services for cryptocurrencies is Regal Assets
To register a crypto-exchange, it is necessary to register a company with the Dubai Multi Commodities Center. With this license, it is possible to carry out various cryptocurrency services for customers: management, storage, trading, software applications, crypto exchange, and other services. In the long run, this license will become the main category for businesses
Two types of licenses are available to entrepreneurs at DMCC:
- Cryptocurrency trading. You will be able to trade (buy and sell) digital assets that were created based on distributed registry technology. Note that this license does not include providing services as a cryptocurrency exchange, brokerage, financial and banking operations, payment processing, or holding currencies from third parties
- Distributed registry license. You will have access to database management, and additional services based on distributed registry technologies, such as a meta-universe service provider or e-commerce provider
IFZA crypto license
In 2018, the International Free Zone Authority (IFZA) was added to the Emirates’ free zones list. It is located in the center of the emirate of Fujairah, in the eastern part of the UAE, the most distant emirate from Dubai. In this zone, entrepreneurs can register enterprises, branches, and subsidiaries. At first, licenses were issued only for trade, services, and industry, but after the conclusion of an agreement with the Dubai Silicon Oasis Authority, the possibilities expanded.
The IFZA, similar to Dubai’s DMCC, now supports entrepreneurs doing business in the cryptocurrency space. They agreed with the SCA to issue cryptocurrency licenses in Dubai.
Companies holding an IFZA crypto license can conduct commercial activities using their crypto assets and cryptocurrency transactions, such as exchange and storage. To obtain a crypto license, you must meet specific requirements and complete the registration procedure by the rules and regulations of the IFZA zone.
IFZA also actively cooperates with other free zones in Dubai and worldwide, creating a favorable ecosystem for developing cryptocurrency businesses. It helps entrepreneurs move quickly between zones and take advantage of the opportunities available in each zone to maximize their business potential.
Cryptocurrency license at DAFZA
DAFZA is the Dubai Airport Free Zone Authority. To support trading related to the commercial activities of cryptocurrency assets, DAFZA and SCA (Dubai Securities Authority) have signed an agreement. According to this, businesses are allowed to trade cryptocurrencies and provide services to customers
DAFZA intends to integrate the issuance of cryptocurrency licenses with the rest of the global services for investors. Flexible legislative support and regulatory framework from DAFZA are provided for the smooth functioning of business operations. The development of cryptocurrency companies in the UAE is aimed at stimulating the growth of trade and the entire sector in the region
There is currently 1 type of cryptologic license available for own cryptocurrency trading. This license is regulated by the SCA, and under its control are offerings, issuance, asset trading, and related financial activities
Crypto license in ADGM
ADGM (Abu Dhabi Global Markets) is an Abu Dhabi financial-free zone that is supervised by regulators. They established rules for cryptocurrency activities back in 2018. ADGM aims to connect the Emirates to the cross-national markets of the Middle East, South and East Asia, and Africa to diversify the UAE economy
It is the first jurisdiction in the world that has created a comprehensive regulatory framework for cryptocurrency transactions. The comprehensive framework makes it easier for the leading players in this industry to operate in a business-friendly environment. It covers the full range of different risks associated with financial crime, financial laundering, customer protection, cryptocurrency exchange, and storage operations, and technology management
Obtaining a license in the ADGM zone allows you to cover the full range of activities that are associated with crypto assets: a license for a cryptocurrency exchange in the UAE; storage of cryptocurrency; buying and selling; management of crypto assets of third parties; marketing of cryptocurrency
Cryptologic license at DWTC
DWTC (Dubai World Trade Center) is a free zone established in 2015, which is designed to operate and serve innovative industries in the field of virtual assets, cryptocurrency, blockchain, etc
This zone is closely cooperating and also coordinating with VARA (Virtual Asset Regulatory Authority) to approve the status of the newly designated zone for regulated crypto companies. All actions and approval processes for cryptocurrencies are coordinated with VARA
In addition, one of the largest cryptocurrency exchanges, Binance signed an exclusive memorandum of cooperation with DWTC, which will help make the zone a cryptocurrency hub for the region
DWTC reports that it will be one of the first zones to allow crypto licensing in the UAE under the supervision of the Securities and Commodities Authority
Options for legal activities in this area:
- A distributed registry license will allow the creation and management of databases to provide a service to customers
- A license for cryptocurrency trading allows for transactions of buying and selling assets that have been created based on blockchain technology
In addition:
- the ability to provide financial advice
- manage crypto assets
- brokerage activities
Cryptocurrency rules in the UAE and the risks of crypto assets
Risks of crypto-assets
The UAE government recognizes all the risks that are associated with crypto-assets:
- financial laundering
- sponsorship of terrorism
Every crypto business is required to develop corporate and customer-oriented rules based on:
- UAE anti-financial laundering and sponsorship of terrorism laws
- Rules and guidelines from the ADGM on anti-financial laundering and countering the sponsorship of terrorism
- FATF international best practices
- Compliance with global risk mitigation and transparency standards
Principles that should be framed in the management of every enterprise:
- Business risk analysis
- Implementation of QAS, AML, and system controls
- Control of management and enterprise systems
- Mandatory reporting
- Record keeping
If you want to stay within the right field, you have to follow these standards.
Taxation
The UAE is a very attractive country for cryptocurrency businesses on the tax side: the federal income and corporate tax rates are 0%. This applies to companies that use cryptocurrency solely for trading or receive it as a salary.
But we should pay attention to the value-added tax. Since the beginning of 2018, the government introduced new rules but put a low tax rate of 5%. Your company can be set up on a zero-tax basis, but ordinary transactions will be subject to VAT at 5%
If you want to find out if your activity is tax-exempt, Al Riyami Advocates & Muhyealdeen can consult you on this issue
The UAE is a very attractive country for cryptocurrency businesses on the tax side: the federal income and corporate tax rates are 0%. This applies to companies that use cryptocurrency solely for trading or receive it as a salary.
But we should pay attention to the value-added tax. Since the beginning of 2018, the government introduced new rules but put a low tax rate of 5%. Your company can be set up on a zero-tax basis, but ordinary transactions will be subject to VAT at 5%
If you want to find out if your activity is tax-exempt, can consult you on this issue
Cryptocurrency license in UAE Dubai is gaining popularity
Cryptocurrency exchange registration in the UAE is becoming an affordable and popular option due to the large number of free zones that allow businesses to trade and store cryptocurrency, process crypto assets, and engage in related activities. Any type of cryptocurrency is available for trading on crypto exchanges in Dubai.
The UAE’s 2021 blockchain strategy calls for 50 percent of all government transactions to be hosted on blockchain platforms. This confirms the government’s intention to emphasize adaptation to future technologies and cement the UAE’s status as the most advanced economy among the world’s developed nations
The world’s largest exchanges like Binance will soon establish a presence in Dubai. Eventually, it will be the first global cryptocurrency exchange in the UAE. It is becoming clear that the Emirates will become one of the largest cryptocurrency exchanges serving the entire region
Frequently asked questions
How can I get a cryptocurrency license in the UAE?
You can get a cryptocurrency license in the UAE from the regulatory authorities of the country where you plan to set up a company. It is also possible to get your crypto license in Dubai. To do this, contact Al Riyami Advocates & Muhyealdeen for assistance, our team will provide advice and help in setting up the company.
Do you need a license to trade cryptocurrency in the UAE?
If you want to conduct legal and transparent activities related to cryptocurrency, you need to get a license.
Is there any tax on cryptocurrency in the UAE?
If you use cryptocurrency for trading or receive it as a salary, the federal income, and the corporate tax rate is 0%. Value Added Tax (VAT) is 5%.
How much does a crypto license in Dubai (UAE) cost?
The cost of a crypto license in Dubai depends on the applicable law and the chosen zone and can vary from €6,000 to €25,150 and above, depending on the nature of the activity. It is advisable to consult with Gofaizen & Sherle for exact cost information.
How much time does it take to obtain a Crypto License in Dubai?
Establishing a new cryptocurrency company in the UAE with a license usually takes 4 to 12 weeks. During this time, Gofaizen & Sherle experts will work on the necessary paperwork, regulatory compliance, and support at every stage of the process to ensure a guaranteed result.
Can a Dubai crypto license be acquired online?
The registration process for a crypto license can be done online. You will need to fill out the necessary license documents and submit them through the electronic platform. This reduces the need for physical presence and simplifies the registration process, saving your time and resources.