The UAE has become one of the most favorable jurisdictions globally for blockchain and cryptocurrency trading businesses due to the UAE’s favorable legal climate, geopolitics, and infrastructure. Blockchain technology and the trading of cryptocurrencies are growing at a fast pace all over the world and local entrepreneurs and investors are showing a growing interest in creating companies in this innovative sector in the United Arab Emirates. As promised this guide will seek to take you through the necessary steps and things you need to factor in when starting a blockchain and cryptocurrency trading business in UAE.

 1. Understand the Regulatory Landscape for the cryptocurrency trading business

First of all, potential participants have to comprehend the legislation regulating blockchain and cryptocurrency trading organizations in the UAE. The country has developed specific guidelines and regulations: 

– Dubai Multi Commodities Centre (DMCC):

 The DMCC Free Zone provides licenses to firms that are in the business of blockchain and cryptocurrency trading. Under their categories, they accommodate and provide legal interpretations of crypto assets and indicate how legal they are.

– Abu Dhabi Global Market (ADGM): 

The Dubai Multi Commodities Centre otherwise known as ADGM has laws that govern cryptocurrency trading within the Financial Services Regulatory Authority (FSRA). It is much more relevant for trading, custody, and issuance businesses involving digital assets.

– Dubai Financial Services Authority (DFSA): 

In light of this, the DFSA, established in the DIFC, regulates crypto asset firms involved in the financial free zone.

These regulators provide distinctive sorts of licenses, so choice depends on your kind of business.

2. Choose the Right Jurisdiction

There is a lot of emphasis on the issue of jurisdiction selection. The UAE offers various free zones and mainland options: 

– Free Zones: 

Dubai is home to some of the world’s largest and freest free zones it provides you with 100% free ownership, tax exemptions, and simplified and shortened procedures for setting up business in areas such as DMCC, ADGM as well as DIFC. The laws that govern free zones vary from one free zone to the other regarding blockchain and cryptocurrency trading firms.

– Mainland: 

When starting your business on the mainland it may be necessary to have a mainland business partner (effective control 51% owned). However, it enables you to operate in all the UAE without having to meet any limitations.

3. Choose the Business Activity

Identify the business activities that your company will be involved in proceeding a clear understanding of all the business activities to be transacted. Common activities for blockchain and crypto businesses include:

– Crypto Trading/Exchange: Mind if engaged in running an exchange platform for cryptocurrencies or in trading of the same.

– Blockchain Development: Creation of multiple blockchain use cases across multiple sectors.

– Crypto Custody Services: Promising to be a strong protector for digital assets.

– ICO/Token Issuance: ICOs that offer investors a set of electronic tokens, STOs that offer investors securities in the form of electronic tokens.

Make sure that your chosen business activity is legal in the chosen jurisdiction and complies with the existing legislation.

4. Company Formation Process

Once you’ve selected the jurisdiction and business activity, the next steps involve company formation:

– Register the Company Name:

 Be certain that corporate name conforms to UAE naming rules and is not yet taken.

– Obtain Initial Approval: 

For the first time, start the application process and in the process make sure that the authorities get all the necessary information regarding business and other activities to be conducted hence approving the initial business license.

– Prepare Legal Documents: 

These normally encompass the Memorandum of Association (MoA), Articles of Association (AoA), and share holder’s or director’s passports.

– Choose an Office Space: 

Here depending on the specific laws of the given country, you may have to for instance lease an office or take the Flexi-desk. Costs may include using free zones for receiving facilities, including co-working and virtual offices.

– Submit the Final Application: 

When all the documents are prepared, submit the final application for business incorporation.

– Receive the Trade License:

 Once approved, this will mean the issuance of a trade license by the government, thus providing a license to practice blockchain and cryptocurrency trading.

5. Compliance and AML/KYC Requirements

That is why it can be stated that maintaining compliance is an essential part of running a crypto business in the UAE. Ensure you adhere to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations:

– Develop Compliance Procedures: Ensure that strong policies and procedures in relation to AML/KYC have been put in place as directed by the regulatory authority.

– Appoint a Compliance Officer: Most countries provide that a business entity must legally designate a Compliance Officer who is charged with the duty of making sure that the business complies with the law.

6. Open a Bank Account

It is easy for a blockchain or a crypto business to face problems with opening an account because the sector is still new. Still, to achieve this, one is well advised to use local advisors who should already know which banking entities are more open to accepting crypto businesses. Currently, banks in the UAE are starting to open to crypto businesses – especially in regulated free zones such as the DMCC and the ADGM.

7. Secure Requisite Permits and Licenses

Depending on the specific activities of your business, you may need additional permits or licenses:

– Crypto Exchange License:

 If you are running a cryptocurrency trading business, there is a special license Crypto Exchange License that you have to obtain from the concerned authority.

– Tech Development License:

 In Blockchain development, you may need a technology-related license which is a bit easier to procure.

8. Hiring and Visa Processing

After registering your company you can recruit employees for the business. The UAE offers a streamlined visa process for businesses in free zones:

– Employment Visas:

 Part and parcel of free zones is that they provide employment visas to your workforce. The number of visas that you can apply for depends on the size of an office or the package of business that you have.

– Investor Visas: 

If you are a business person, you can also be granted an investor visa which enables you to live and operate a cryptocurrency trading business in the UAE.

9. Marketing and Networking

Leverage the UAE’s robust business environment to market your blockchain or crypto business:

– Networking Events: Attend blockchain and fintech conferences in Dubai and Abu Dhabi to be in touch with the market representatives and potential customers.

– Digital Marketing: Market the business through the use of matrices and digital media to the potential customers and investors within and outside the country.

10. Be current on any changes that may occur in the regulatory environment of the industry

There is a swift shifting of territory when it comes to the blockchain and cryptocurrencies. There is always the possibility of new regulations or changes in the existing ones in the UAE. To reduce the risk of going against rules and regulations, one has to keep updating oneself about them.

Conclusion

Opening a blockchain and cryptocurrency trading business in the UAE has distinctive benefits: Available, liberalized, and favorable regulatory framework, geographic location, and expanding market. Concerning the above-outlined steps and cooperation with locals, any business can be created and developed in one of the most rapidly evolving and innovative economies in the world.

Do not hesitate to call our business consultant to set up your cryptocurrency trading business.

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