Dubai has issued its first-ever law on virtual assets to regulate the cryptocurrency sector. The introduction of the Dubai Virtual Asset Regulation Law is expected to transform the process of business setup in Dubai dramatically. The path-breaking law is poised to make the emirate a leading hub of cryptocurrency and blockchain. The government has also established the Dubai Virtual Assets Regulatory Authority to control and regulate the operation of cryptocurrency businesses in the emirate.
Foreign investors who wish to establish a new crypto firm in Dubai or move their existing businesses into the emirate should understand the vital aspects of the law. Once the nuances of the new law are understood, you can open your firm with the help of business setup consultants in Dubai. In this article, we discuss the key takeaways from Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai.
The Objectives of Dubai Virtual Asset Authority
The Virtual Asset Authority will be the competent entity in charge of regulating the virtual assets companies. Article 6 of the Virtual Assets Law has set out the following as the key objectives and responsibilities of the Virtual Asset Authority:
- Develop the general policy and the strategic plans related to regulating Virtual Asset services
- Regulate, supervise, and oversee the issuance, offering, and relevant disclosure processes of Virtual Assets and Virtual Tokens
- Regulate, and issue Permits to, Virtual Asset Service Providers
- Classify, and determine the types of, Virtual Assets and Virtual Tokens; and prescribe the standards and rules for trading in the same
- Prescribe, in coordination with the Dubai Digital Authority, the procedures for the protection of the Personal Data of Beneficiaries
Scope of the New Virtual Assets Law in Dubai
The scope of the Virtual Assets law is limited to the emirate of Dubai, including all the non-financial free zones such as Dubai Multi Commodities Centre (DMCC) and Dubai World Trade Centre(DWTC). However, the law has no force in Dubai International Financial Centre (DIFC), which is a financial free zone. DIFC is regulated by the Dubai Financial Services Authority (DFSA), which says it may a dope its own rule for cryptocurrencies in the future.
Conducting Cryptocurrency Activity in Dubai
Anyone wishing to start a crypto business must first obtain a license from the Virtual Assets Authority. The authority will issue a permit as per the relevant legislation, requirements and procedures approved by its Director-General. Investors who wish to conduct the crypto activity must follow all the procedures of business setup in Dubai and must have an appropriate legal structure approved by the relevant commercial license issuing authority. However, the entrepreneurs must first obtain the approval of VARA before initiating the procedures for licensing by the competent commercial licensing authority.
Cryptocurrency Activities that Require Permits
As per article 16 of the Virtual Assets Law, the following Activities require Permits and are subject to oversight by VARA. Business set up consultants in Dubai can help you obtain the relevant permits.
- Provisions of virtual asset platform and management services
- Provision of services for the exchange between Virtual Assets and national or foreign currencies
- Provision of services related to the exchange between one or more forms of Virtual Assets
- Virtual Asset transfer services
- Provision of Virtual Asset safekeeping, management, or control services
- Provision of services related to Virtual Asset Wallets
- The precision of services related to the offering, and trading in, Virtual Tokens
Set up a cryptocurrency business in Dubai with Jitendra Business Consultants
Setting up a cryptocurrency business in a Dubai free zone will enable you to leverage the benefits the emirate offers such as excellent connectivity, robust infrastructure, low taxation, easy licensing procedures, ease of doing business etc. However, foreign investors may be unaware of the nuances of the procedures of business setup in Dubai. However, business setup consultants in Dubai such as Jitendra Business Consultants (JBC) can help you to start a crypto business hassle-free.
Business registration in a Dubai free zone is the ultimate opportunity for budding as well as established cryptocurrency companies. JBC is one of the best business setup companies in the UAE and can help you get your company registered fast. Our consultants are well-versed in the new virtual assets law as well as immigration & labour laws. JBC also ensures that the entire process of your company setup runs smoothly. Our company formation specialists will guide entrepreneurs through the entire process of business setup in Dubai such as business registration, meeting regulatory requirements, advice on free zone license costs, and getting approval from relevant authorities.