In February, Law No. 4 of 2022 was enacted, regulating the use of virtual assets in the Emirate. This law works to begin the lengthy process of establishing a legal framework for handling virtual tender, including cryptocurrency and non-fungible tokens, or NFTs. Part of a plan to concrete Dubai’s place as the foreign entrepreneurship and blockchain tech leader.
Not to be left behind in the dust, many global-scale crypto exchanges have collected commercial business licenses in Dubai. As a result, establishments in the region are eyeing the prospects of patrons using and embracing various forms of digital currency.
One such business, a café known as Bake N More in Al-Quoz, is the first to officially welcome various forms of cryptocurrency from its customers. This restaurant’s payment program is managed by a crypto platform known as the Mixin Network, a decentralized way to facilitate the transfer of digital tender.
This marks the beginning of a new era of business in the UAE. Across many different business sectors, entrepreneurs, business owners, and tech companies are positioning themselves to take advantage of cryptocurrency’s potential rewards.
Other Business Sectors Also Adopt Crypto
With cryptocurrency poised to become a mainstream form of legal tender, other businesses and institutions are taking notice. For example, Citizens School, a UK-curriculum education center, announced that it would allow parents to pay tuition fees in Bitcoin or Ethereum. As a result, nearly 10% of the enrolled students paid their tuition via this method.
In previous years, cryptocurrency was a term bandied about in business circles, yet the concept seemed to live in the shadows of the digital age. However, when the investment community adopted cryptocurrencies in 2021, some like Bitcoin rose to extreme heights in terms of value. As a result, decentralized banking rose to the forefront of many economic policymakers.
Crypto Enters the Market
In 2020, the UAE was estimated to have the third-largest cryptocurrency market in the Middle East, with a total value of $26 billion, according to Chainalysis, a blockchain data processing platform. Additionally, the UAE announced a progressive licensing program aimed at matching large national entities like Singapore and Hong Kong.
To reign in a volatile market, the UAE introduced a new authority known as the Dubai Virtual Assets Regulatory Authority to handle the expansion of cryptocurrency in the business market. Seeing a business-positive framework being built, many global crypto exchanges moved to the region to conduct affairs. Large-scale crypto exchange companies like Bybit, Binance, and FTX have announced plans to open operations in Dubai.
The Benefits of Crypto for Your Business
For new businesses and established companies alike, planning for the future takes ample foresight and planning. Companies that pay special attention to new trends and perform their due diligence can stay ahead of the game when those same trends eventually become the norm.
Investors and entrepreneurs are seeing a wide range of benefits to trading with and utilizing various forms of crypto. These benefits include:
1. Brand Visibility
At this stage, companies making the transition to using crypto as forms of payment, salary, and asset transfers are subject to broader visibility than traditional Ecommerce or brick and mortar establishments. As a result, your brand will inherently have a greater scope of exposure due to adopting these new decentralized currencies.
2. Low Cost
Unlike established banking systems, cryptocurrencies require very few processing fees, allowing business owners to keep more profit. It also allows companies to conduct transactions faster and more efficiently.
3. Reduction in Scams
Cryptocurrency transactions are famed for being irreversible, meaning that you’ll have to worry less about chargebacks or fraud. Accepting virtual currencies reduces the inherent risk businesses take conducting business. Smaller-scale companies are also subject to less overhead in terms of security than with traditional currencies.
4. Blockchain Value
Blockchains are a system that allows companies to exchange data in a fast, secure manner. Additionally, it will enable transactions to complete without one entity having to take responsibility for protecting transactional data. This ensures that a business’s private information is not compromised during business transactions.
5. Customer Privacy
Blockchains use modern cryptographic methods to ensure that transactions between users are secure. With such a system, both parties have public and private keys that significantly increase security from hackers.
The Requirements for Securing a Cryptocurrency License in Dubai
The UAE government has placed several eligibility requirements for persons or companies applying for a crypto license. Before an application can be submitted, you’ll need to:
• Secure a commercial license form from the Department of Economic Development in Dubai.
• Collect and provide copies of passports for every partner involved in the business.
• You may not have any evidence of past fraud on your records.
• Ensure that your capital investments and assets are operating well for a minimum of six months.
• Incorporate all crypto assets with one of the UAEs financial free zone departments.
• Submit a complete business plan to the necessary authorities or government agencies.
Steps to Form a Crypto Business in Dubai
Setting up a crypto business in Dubai is an easy and straightforward process that allows investors and crypto enthusiasts to establish their Dubai crypto business. Like any business formation, there is a process that must be followed. The steps to form your cryptocurrency business in Dubai requires you to:
1. Choose a trade name
What will your company be called? You’ll need to submit a trade name request to the DED for approval. This company name may not already be used and may not include any profanity.
2. Select your economic zone
Will you be forming a business in Dubai’s Free Zones? Or will you choose to operate in Dubai’s Mainland? The choice here will significantly depend on your business type and goals.
3. Gather the necessary information and submit a registration application for your cryptocurrency license.
You’ll need to get together the necessary documentation for you and your shareholders or partners and submit it to the proper authorities. These can include:
• Articles of association
• Memorandum of association
• Passport copies for all involved partners
4. Follow all necessary compliance regulations set forth by the relevant authorities.
It is incumbent on business owners to know and understand the regulations surrounding cryptocurrency and crypto business licenses. Additionally, businesses must be aware that these regulations are subject to change over time.
Now is the Time to Dip Your Toes into Crypto
If you’re an entrepreneur or established business owner, you’ve undoubtedly heard crypto mentioned in business and social circles. But, in truth, there has never been a better time to lean into the world of cryptocurrencies. The market is only beginning to heat up as the UAE continues building regulations that benefit new businesses moving into crypto.
If you’ve been thinking about forming your own crypto business, now is the time! Enjoy the benefits of quick, secure, decentralized banking that puts you in charge of your money. The future is knocking. Will you answer its call?
MSZ Consultancy is Your Answer for All Things Crypto
For new foreign investors and ecommerce business owners, crypto is quickly becoming a popular form of banking and will continue to become an increasingly normal way to conduct business. With low processing fees and unparalleled security, it makes sense that more and more companies will venture into cryptocurrency.
For many entrepreneurs, conducting business in a foreign nation can be confusing. But with the help of expert business setup consultants, handling applications, licensing, and visa information can be a breeze. Our legal and business experts have years of experience helping companies navigate the ins and outs of UAE business. From Dubai business setup to securing PRO services to handling important policies and renewals, MSZ Consultancy is your one-stop-shop for UAE business. By letting our expert consultants take on the day-to-day tasks, you’ll be free to focus on the more critical aspects of your business.
So, if you’ve been waiting to pull the trigger on your new cryptocurrency business, now is the time! With more companies switching to decentralized business payment services, there has never been a more opportune time to form a company in Dubai. Give us a call today at +971 52 544 1248 and let our team of experienced professionals help you prepare for the future and supercharge your business.