Blockchain and cryptocurrency may be relatively new concepts in the public consciousness, but they’ve already made a huge impact.
The most famous cryptocurrency, Bitcoin, was worth just USD 0.08 back in 2008. Today is it worth around USD 33,000. Naturally, this rapid growth has led to a wave of crypto- and blockchain-related businesses launching around the world.
So much so that the global blockchain market is estimated to be worth USD 3bn in 2020. And predicted to increase to almost USD 40bn by 2025.
If you’d like to follow suit and start a cryptocurrency or blockchain business here in the UAE, here is everything you need to know to get started.
What is the blockchain?
Let’s start with the basics – what is the blockchain? In very simple terms it is a system of recording information. Like a digital ledger.
Whenever a new event or transaction takes place a new block of data – usually containing transaction details and a date and time stamp – is added to the chain. Due to its public and algorithmic nature, it is incredibly difficult to alter, hack, or cheat.
What is cryptocurrency
Cryptocurrency is a form of decentralised digital currency, with no physical money in existence. It is not issued by a central body. Instead, it is generated by a process called mining.
Mining involves computer processors solving complex puzzles. Whenever a puzzle is successfully completed, a new block is added to the blockchain, and currency is generated to reward the miner.
Cryptocurrency is then stored either in online exchanges, digital wallets, or physical hardware. It can be sent between address either among individuals or organisation in the form of payment.
There are thousands of cryptocurrencies available to mine, buy, and trade. The most popular include Bitcoin, Ethereum, and Stellar.
What are the benefits of starting a cryptocurrency business in Dubai, UAE?
There are many great benefits to starting any business in Dubai. The country’s 0% tax rate on corporate and personal income, low barriers to entry, and excellent infrastructure make it a particularly attractive proposition.
As for trading in cryptocurrency, the industry is still in its infancy. While the experts may disagree on the price that certain currencies will reach, there is no debate about the longevity of the blockchain. In other words, whether Bitcoin settles at USD 10,000, USD 100,000 or USD 1,000,000, cryptocurrencies are here to stay.
Steps to start a cryptocurrency business in Dubai, UAE
To operate a cryptocurrency or blockchain business in Dubai, you’ll need a trade license. But there is a little bit of admin to take care of before we get to that stage. That’s why it’s a good idea to get in touch with a local company formation expert such as Business Incorporation Zone (BIZ) before starting the process.
First, we’ll help you choose your company name. When making this decision, be aware that you must abide by a strict set of naming conventions.
You should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e., Dave Mann Consulting, rather than D Mann Consulting. We can also check that your chosen name is available before registering it for you.
Next, we’ll help you decide whether to set up in a free zone or in the mainland. If you opt for a free zone, you will benefit from zero currency restrictions, plus capital and profit repatriation. However, you will need to work with a local agent to trade directly with the UAE market.
If you set up in the mainland, you are free to trade throughout the UAE without the assistance of a service agent.
With these decisions made, you can apply for your cryptocurrency license. You can make this application yourself directly to the Department of Economic Development (DED) or equivalent Municipality if you wish to set up elsewhere in the emirates. Or to the managing authority of your chosen free zone.
The process is much more straightforward, however, if you work with BIZ. We can make and manage the application to ensure an easy incorporation process.
While the process of starting a business out here is relatively straightforward with the help of an expert, there are a few things to keep in mind. Cryptocurrency trading is regulated in much the same way as other financial trading. So, as well as ensuring you are correctly licensed, you’ll also need to comply with anti-money laundering regulation and submit regular accounts for audit.
What are the cryptocurrency license costs in Dubai, UAE?
It is difficult to offer an accurate estimate of the cost of a cryptocurrency license in Dubai. The total capital required will depend on the exact nature of your business activities, where you choose to set up, and the size of your operation.
The best way to get an accurate estimate of the costs involved is to talk to the experts at BIZ. Once we understand your requirements, we will send you a personalised quote.
Are you ready to start your cryptocurrency or blockchain business in Dubai, UAE?
Hopefully, this guide has made clear that if you’re armed with the right knowledge, setting up a crypto company in Dubai doesn’t have to be overly complex.
That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the process is only straightforward if your license application is complete at the time of submission and free from errors.
To help you to ensure that this is the case, it’s a good idea to work with a Dubai company formation specialist such as Business Incorporation Zone when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits, and visa applications required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.