This is a comprehensive guide to launching a cryptocurrency business in Dubai. Please note that the rules and regulations on the subject are constantly in flux; therefore, we recommend you speak to a consultant for the latest info before launching your business.
Understanding the Fundamentals
In the UAE, there are two ways to enter the cryptocurrency market. First, you can purchase cryptocurrencies using fiat money such as dirhams or dollars and trade with others. Alternatively, you can become a crypto miner to earn cryptocurrency. Across the MENA region, few jurisdictions have put regulations on cryptocurrency, but please check the current laws before you start your business.
Crypto mining is the process of creating new cryptocurrency coins by solving complex math problems that verify transactions in the currency. When a cryptocurrency coin or token is successfully mined, the miner receives a predetermined amount of cryptocurrency. As prices of cryptocurrencies have surged in recent years, it’s understandable that interest in setting up businesses for crypto mining has also picked up.
Develop a Business Plan
Like any conventional business, you will need a business plan for your cryptocurrency business. This involves doing your market research on which cryptocurrency to mine; a strengths, weaknesses, opportunities, and threats (SWOT) analysis; and an understanding of the costs to launch the business as well as ongoing costs to run the business.
The cost of starting a cryptocurrency mining business incorporates hardware like GPUs or ASICs, utility costs to run your computer systems, an artificially cooled location to keep the hardware functional; as well as other expenses to conduct business.
Most of the jurisdictions that issue licenses for cryptocurrency require extensive business plans that list your financial resources or capacity for 6 to 12 months of operation after incorporation.
Getting a Business License for Cryptocurrency
Free Zones in Dubai were some of the first jurisdictions to see the potential of cryptocurrency businesses. The Dubai Multi-Commodities Centre (DMCC) is one of the most popular sites for incorporation. Their business license allows you to store, trade, and develop cryptocurrency-related software and a host of evolving crypto services.
The DMCC Crypto Centre has become a regional hub for developing and applying crypto and blockchain technologies. The Centre offers facilities to companies developing blockchain-enabled trading platforms and firms issuing and trading crypto assets.
Dubai Airport Free Zone Authority (DAFZA) has an agreement with the Securities and Commodities Authority (SCA) that allows entrepreneurs to get a license for the listing and trading of crypto assets within the free zone.
Lastly, if you are looking for a license outside of Dubai, you can opt for the Abu Dhabi Global Market (ADGM) free zone. The ADGM Financial Services Regulatory Authority (FSRA) has established itself as one of the world-leading regulators in the cryptocurrency market.
What Happens If I Decide to Operate from My Home Without a Cryptocurrency License?
One of the common questions we receive is about running a cryptocurrency mining operation from home. The answer is simple, don’t do it, as the risks can be severe. Here are just a few:
- Cryptocurrency mining creates a lot of heat, and the risk of fire is high without the proper cooling or ventilation facilities.
- Mining is an energy-intensive process, and your residential electricity bill will experience a huge spike. Such spikes will be noticed by the utility companies who may choose to investigate.
- You could invalidate your home or renters’ insurance in the event of an accident as you are conducting an unlicensed business from your home.
- You could be subject to fines and sanctions.
The risks cancel out the potential rewards; therefore, a cryptocurrency business license is the right step forward.
Note: You can contact us through call or email if you want to know the ADGM company set up cost.
Let the Experts Handle your Cryptocurrency Business Setup
After working with many cryptocurrency enthusiasts, we understand that the early stages of your business are the most vital to the overall success of your venture. We can help take care of the paperwork, so you get your business license to go on your way to being a cryptocurrency success story. Our initial consultation is free, so you have nothing to lose. So don’t waste any time, call us right now!