After firmly establishing itself as a business hub, the United Arab Emirates (UAE) is becoming one of the best cryptocurrency platforms across the globe. Since the introduction of cryptocurrency, it has revolutionized the business industry and has prompted entrepreneurs to launch their businesses in Dubai, UAE.
The UAE has already made huge strides when it comes to catering to the needs of emerging technologies such as blockchain and cryptocurrency. A number of examples exist to back the claims that the UAE is making tremendous progress in terms of innovation in emerging technologies; the Dubai Multi Commodities Centre (DMCC) free zone recently launched a Crypto Centre to support the crypto sector and cater to the unique needs of the crypto-based companies.
The exponential growth of the famous cryptocurrency, Bitcoin, is a representation of how lucrative investments in crypto can prove to be. The increase in customers led the market to further expand, thousands of new cryptocurrencies have launched since then and this field has taken over the world.
If you are relatively new to the concept of cryptocurrency or blockchain business then worry not because Riz & Mona Consultancy has compiled this guide to help you with it. In order to understand, let us start by discussing the basics such as what a blockchain is.
What is a Blockchain?
Blockchain is the basic level introduction to the complex concept of cryptocurrency. A blockchain is simply a distributed database that is shared among the nodes of a computer network. Similar to a database, the blockchain also stores information in a digital format.
Although blockchains are used in various other things they are renowned for their role in cryptocurrency systems. The blockchain essentially helps in maintaining a secure and decentralized record of the transactions.
- Blockchain, although similar to a database, differs from a traditional database by the way it stores the information. The information in a blockchain is stored in blocks which are then linked via cryptography.
- The arrival of new data is stored in a fresh block. Once a block runs out of space to store data, a new block is created while the previous block is linked to the newly created block. This is how the entire data is chained together in chronological order.
- Various types of data can be stored in a blockchain but the most common utilization of it has been the maintaining of ledgers for transactions.
- In terms of famous cryptocurrencies like Bitcoin, the blockchains in their case are used in a decentralized way. This means that no one person or an entity holds control but everyone holds collective control.
- In the case of cryptocurrency, the decentralized blockchains are irreversible; meaning that the transactions are going to have a permanent record and will be viewable to anyone.
It is worth adding that the blockchain data, although it maintains the records and allows them to be recorded and distributed, the data cannot be altered, deleted, or destroyed.
What is Cryptocurrency?
The cryptocurrency is a decentralized digital currency, which means that there is no physical existence of money. The issuance of the currency is not done by a central but it is generated through a process called mining.
In layman’s terms, the process of mining involves a computer solving complex puzzles. Once a puzzle is successfully completed, a new block is added to the blockchain to reward the miner.
The storage of cryptocurrency is done in online exchanges, digital wallets, or physical hardware. Digital money can be sent between addresses, either between individuals or between organizations.
Although there are thousands of cryptocurrencies that are available to purchase, trade, and mine, the most famous ones based on the market cap are called Bitcoin, Ethereum, US Tether, and Stellar.
Cryptocurrency Business Plan in UAE
The Department of Economic Development (DED) will issue the cryptocurrency license in Dubai. However, the issuance of the license is dependent on the business plan from your end which needs to be provided beforehand.
The business plan for a cryptocurrency license comprises the following things:
The business goals, both short and long-term, need to be mentioned. The business idea also includes the basic details of the project and its general operations. You will also need to pen down the details of how the business activities will be managed in your business.
This will add the details as to how you will be financing your project, how the capital will be raised, and where the funds will be managed for the business activities. If your funding strategy includes your business investors then information regarding their investment needs to be provided. However, if you are self-financing then all the documents need to be filled and provided.
The concept essentially depicts the kinds of cryptocurrencies you will be trading and/or mining. In addition to that, what the final product will be, and what will be the criteria on which you will be selecting it.
In this, you will need to provide a strategy through which you will be implementing your business plan. Moreover, this should also include the methods and techniques you plan on using to compete with the existing rivals in Dubai.
Understanding the Cryptocurrency License in UAE
In order to conduct legitimate business in Dubai or any other state of the UAE, a trade license is required by the corporation. Companies looking to open a crypto-based company in the UAE will require a commercial license because the cryptocurrency business falls under that category. In order to understand this further, commercial licenses are required for commercial processes which involved trading processes. Since the cryptocurrency business is directly related to the trading of Bitcoin along with other currencies, a commercial license has to be obtained. With the use of this crypto permit, the companies can begin the operations of the business.
Obtaining Commercial License for Crypto Business in Dubai
There are two ways through which you can obtain a commercial license for the purpose of conducting crypto-related business.
- Online: The registration process can be conducted online as it requires you to complete license paperwork and submit it online.
- Offline: There are several business agencies that have been set up in Dubai which help you to complete the paperwork. The licensing paperwork can be submitted there and your application process can begin from there.
How to Obtain Cryptocurrency License in Dubai?
Some rules and regulations are required to be followed if you plan on attaining a cryptocurrency license in Dubai. Here are some things to keep an eye out for:
- Complete the application and submit it to the registered corporates of the UAE.
- Documentation linked to the company’s registration and the shareholders need to be provided.
- Company’s official document to DMCC free-zone local landowners needs to be shared.
- Ensure that all documents mentioned in the application process are provided.
- Submit the application form fee and attach the receipt to complete the process.
Once you have completed the procedure and paid the dues, you will get a confirmation email on the registered email address. Following that, you will receive the cryptocurrency license within weeks after the approval.
Requirements for Obtaining Cryptocurrency License in Dubai?
Although what has been mentioned in the previous heading can also be considered to be requirements but there are some additional things that need to be taken into account.
Here are some things that will be required to complete the process for getting a cryptocurrency license in Dubai:
- You need to ensure that the Crypto Assets must be incorporated with the UAE financial free zone departments.
- Your capital resources and operational assets need to be disclosed and visible for more than 6 months, at the bare minimum. Sometimes you will be required to provide information for the past 12 months as well.
- In order to ensure a seamless process, clean records are an absolute necessity.
- The information of yours needs to be secured in a crypto wallet.
- Valid passport copies need to be provided for all the business members participating in your business activities.
- A DED-approved commercial license has to be provided alongside.
How Riz & Mona Consultancy Can Help?
Riz & Mona Consultancy has deployed a team of highly trained sales professionals who specialize in the field of innovative technologies and cryptocurrency. We provide affordable services and also help the entrepreneurs along the way and create a lasting business relationship with them.
Advantages of Hiring a Business Consultancy Firm
Someone who is not well versed in the licensing culture in Dubai, they are bound to face problems and delays. This is one of the main reasons why a majority of companies hire consultancy firms to assist them with the process of attaining various licenses to get their business up and running.
Here are some of the main reasons why hiring a business consultancy firm can prove to be a great business decision:
- We will guide you through the process of completing the documentation procedure.
- Since the consultant companies such as ourselves are well versed with rules and regulations, they can save ample time when it comes to the license application process.
- We will ensure that you remain under the umbrella of governmental policies and that you are not unintentionally doing something that is against the law.
- We will ensure that no confusion is created between you, the business owner, and the economic departments.
Why Choose Riz & Mona Consultancy?
Riz & Mona Consultancy has proven itself as a reliable partner to help businesses get up and running. We can create ease for the entrepreneurs who are planning on getting a cryptocurrency license in Dubai, UAE. Our sales representatives have complete knowledge about license-providing companies which include BRL, DED, and DMCC.
In addition to this, We also provide real-time details and updates to our clients to keep them in the loop of everything that is happening. Feel free to contact us for further information regarding obtaining a cryptocurrency license in Dubai, UAE.