The landscape of company formation in the UAE is not averse to new technological advancements. A few years ago, investors were wondering whether it is legal to start a cryptocurrency business in Dubai or any other emirate in the UAE. At a time when dealing in crypto assets is riddled with uncertainties in many top countries, the UAE has quickly come up with robust regulations and licensing procedures for the virtual assets sector.
You can now set up a crypto business in the UAE thanks to the regulatory support extended by the Federal Government and Governments of various emirates. However, due to the risks involved, you need to be aware of the various requirements and regulations associated with this specific activity. Since it is a relatively new industry in the UAE, foreign investors should keep track of the new updates related to cryptocurrency activity. Business setup consultants in Dubai can help you track all the important updates, requirements and deadlines related to company incorporation.
Here are some of the latest updates that crypto firms in the UAE should be aware of:
Creation of a Crypto Free Zone in RAK
The UAE established its first exclusive free zone for crypto assets in Ras Al Khaimah. The free zone named RAK Digital Assets Oasis will facilitate company formation in the UAE for investors engaged in sectors such as Virtual Assets, metaverse, blockchain, gaming, NFTs, DAOs, DApp, and other Web3-related businesses. The RAK Digital Assets Oasis will be a purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector. The free zone will start accepting applications in the second quarter of 2023.
Crypto Assets Regulation at the Federal Level
The Securities and Commodities Authority (SCA) issued the Decision No. 23 of 2020 concerning the Crypto Assets Activities Regulation (CAAR) to regulate the offering, issuing, listing and trading of crypto assets in the UAE. The scope of this regulation also covers initial coin offerings (ICOs), exchanges, marketplaces, virtual asset platforms, custodian services and related financial services based upon or leveraging crypto assets.
However, on 12th December 2022, the UAE Government issued Cabinet Resolution No.111 of 2022 on the regulation of Virtual Assets and Service Providers. The key objective of this regulation is to safeguard consumers, improve the UAE regulatory framework relevant to the virtual asset sector, regulate virtual asset activities and related service providers, and ensure that virtual asset service providers (VASPs) are within the scope of the UAE Anti-Money Laundering (AML) legislation.
Crypto Assets Regulation in Dubai
If you wish to open a crypto company in Dubai, you need to get the approval of the Virtual Assets Regulatory Authority (VARA). VARA was established in March 2022 as the sole authority regulating virtual assets across Dubai. VARA is responsible for licensing and regulating the Virtual Asset sector in the Emirate of Dubai and its free zones (except DIFC). Business setup consultants in Dubai can assist you with getting a crypto license.
AML-CFT regulations in the UAE
The UAE has implemented strict AML and CFT regulations for crypto asset companies. These regulations require companies to implement robust KYC (know-your-customer) and AML programs, monitor transactions for suspicious activity, and report any suspicious transactions to the relevant authorities.
Crypto Valley in DMCC Free Zone
The Dubai Multi Commodities Centre (DMCC) free zone has established a special zone for setting up crypto firms. DMCC Crypto Valley is dubbed as the world’s largest ecosystem for cryptographic, blockchain and distributed ledger technologies. Business setup consultants in Dubai can help you get a license from DMCC crypto valley.
Digital currency launch
In 2021, the UAE Central Bank launched a digital currency called “Aber”. Aber is designed to facilitate secure and instant domestic and cross-border transactions between individuals and institutions in the UAE. It is currently being used in a trial phase with select banks and financial institutions.
Best Business Setup Advisers in Dubai
Investing in crypto assets is no longer a taboo as the landscape of business setup in the UAE is ideal for the sector. However, you need to be aware of the various rules and requirements governing the setting up of crypto businesses in the UAE. Business setup consultants in the UAE such as Jitendra Business Consultants (JBC) can help you navigate these regulations and requirements.
Our highly qualified consultants can impart the legal know-how and expertise to expedite the process of company incorporation in Dubai. JBC can help foreign investors to navigate complex procedures such as document drafting, visa processing, bank account opening etc. We also help the companies avoid hefty penalties by providing compliance services related to ESR, UBO & AML-CFT. Company registration becomes easier with JBC’s guidance and assistance.
