The United Arab Emirates (UAE) operates as a federal state comprising seven emirates, each with the authority to enact its legislation in various domains within its jurisdiction. Oversight of financial activities primarily falls under the purview of the Central Bank (CB) and the Securities and Commodities Authority (SCA), the stock market regulatory body.
Moreover, every emirate hosts free economic zones (Free Zones) that operate autonomously from national laws, governed by local legislation. Within these zones, entrepreneurs can register businesses engaged in blockchain technologies and secure UAE crypto licenses.
In certain free zones within the Emirate of Dubai, regulatory oversight for cryptocurrency-related activities falls under the Dubai Financial Services Authority (DFSA). Presently, the list of zones permitting such activities includes:
- Dubai International Financial Center (DIFC)
- Dubai Silicon Oasis Authority (DSOA), in conjunction with the IFZA-DSOA ecosystem, which integrates the Dubai Free Zone with the Fujairah Free Zone. Businesses registered with IFZA can establish operations within DSOA.
- Dubai Multi Commodities Center (DMCC)
- Dubai Airport Free Zone Authority (DAFZA)
- Dubai World Trade Center (DWTC)
The Abu Dhabi Global Market (ADGM) free zone, on the other hand, is regulated by the Financial Services Regulatory Authority (FSRA).
Despite the UAE’s cautious stance on cryptocurrencies, both federal and local legislation actively encourage the growth of businesses operating in non-fiat currencies.
Features of Crypto License
In the UAE, there are two types of licenses available for conducting cryptocurrency-related businesses: Controlled licenses & Uncontrolled licenses.
Controlled licenses: These licenses are issued under regulatory supervision and permit operations such as:
- Providing services for trading and investing in digital assets (crypto funds).
- Managing cryptocurrency assets on behalf of third parties.
- Offering cryptocurrency storage services (crypto wallets).
- Facilitating cryptocurrency trading and exchanges.
- Issuing cryptocurrency assets.
Uncontrolled licenses: These licenses allow for activities in the cryptocurrency and blockchain technology sphere that are not subject to direct regulation, including:
- Providing services on distributed ledger technology (DLT), such as offering IT solutions for database management.
- Promoting goods and services using crypto tools, crypto assets, and DLT technologies.
- Conducting proprietary cryptocurrency trading by using personal funds for purchasing and selling virtual currency (exchange transactions are prohibited).
- Investing in cryptocurrency.
- Ensuring the cybersecurity of cryptocurrency assets.
- Advertising startups involved in crypto business.
- Operations related to cryptocurrency mining in Dubai.
How Spectrum Auditing can help you?
Being a pioneer in the field of auditing, accounting, taxation and advisory services, we ensure we keep track of all the changes that are taking place in the UAE with respect to the changes in laws, rules, regulations and keep our clients informed as well as sharing the same information through our blog section or social media handles regularly. Spectrum Auditing will guide you with the laws and regulations of UAE, be it the Value Added Tax (VAT), Economic Substance Regulations (ESR), Corporate Tax (CT), Transfer Pricing (TP), Ultimate Beneficiary Owner (UBO), Anti Money Laundering (AML), etc after reviewing your business.
Call us today for any kind of assistance at +971 4 2699329 or email [email protected] to get all your queries addressed. Spectrum is your partner in your success.
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