Dubai bank account for crypto business

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Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
No local UAE Bank considers onboarding any companies with Crypto License for the time being.

Bank Account opening nowadays goes much further then just making an intro to a Bank.
 

myself

New member
Did you manage to open a bank account after getting the DMCC license? There are companies that assist in account opening in Dubai, like Virtuzone. They charge 3000 AED if successful, 500 if unsuccessful. Usually the process is smoother when the client is introduced through these firms.
I didn’t try yet. I’ll share once I have any updates.
Thanks for sharing.
 

Sols

Staff member
Mentor Group Gold
No local UAE Bank considers onboarding any companies with Crypto License for the time being.

Bank Account opening nowadays goes much further then just making an intro to a Bank.
Exactly, and this gets overlooked a lot. This isn't the late 90s, 2000s, or even early 2010s anymore anymore. Bank account opening and just as importantly bank account maintenance is decided by compliance departments, not bank managers.

As long as the correspondent banks don't allow anything related to crypto, there isn't much banks in UAE can do even if they might want to. They aren't going to risk access to USD, GBP, EUR, and other major currencies just to supply banking services to a crypto company. It's the same with crypto licenses in EU. At most, licensees are able to access EUR/SEPA (the equivalent would be an AED only account in UAE). Very few have SWIFT relationships and those belong to major institutions and are heavily scrutinized.

Many fiat on/off ramps rely on back channels where the remitting bank doesn't know or has plausible deniability.

A crypto license in UAE is better than having no license. But, just like other crypto licenses, don't expect the doors to the fiat financial system to suddenly become wide open.
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
A crypto license in UAE is better than having no license. But, just like other crypto licenses, don't expect the doors to the fiat financial system to suddenly become wide open.
That's it and the truth is that you can opt for something somwhere else for maybe 10% of the cost with having the same banking possibilities -> close to none.
 

myself

New member
No local UAE Bank considers onboarding any companies with Crypto License for the time being.

Bank Account opening nowadays goes much further then just making an intro to a Bank.
I didn't apply for a bank account for the company yet but I managed to open a personal account for myself. The documents I presented to the CBD
No local UAE Bank considers onboarding any companies with Crypto License for the time being.

Bank Account opening nowadays goes much further then just making an intro to a Bank.
I was in Dubai a few weeks ago. I asked a teller at the NBD Business branch at the DMCC centre (Almas Tower) about the possibility of opening a bank account for a DMCC crypto trading company. His answer was that "we did not receive the go-ahead yet from NBD's management to provide accounts for crypto companies". He also said that he's seen many customers asking for the same.
I know somebody in a similar situation who called the DMCC crypto centre to ask for advice about opening a bank account for his crypto trading company. He was told that "we're working with an offshore bank to provide bank accounts to our crypto companies".
It is clear that opening a bank account for a crypto company is not as easy as opening an account for a restaurant. But with the current pace of institutional crypto adoption I hope things will change soon to the positive side. For now we have to keep trying.
My next trip in Dubai I will try to work on the bank account and see how it goes.
 

conxentra

New member
The problem with banks and crypto is more an issue if the firm is trying to operate as a crypto exchange and/or getting from the public (there are no licenses for that in UAE currently, though they are working on it).

One of the approved license type from DMCC is for proprietary crypto trading, which does not involve getting funds from the public or operating as an exchange. In that case, trading in crypto is not much different from trading equities. The firm would fund the broker by depositing from the bank and withdraw the trading profits back through the bank.

The main attraction for traders is that this firm is approved by DMCC to do their crypto trading, with the clarity that the profits will not be taxed, unlike in many other jurisdictions, the tax treatment is unclear.
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
The problem with banks and crypto is more an issue if the firm is trying to operate as a crypto exchange and/or getting from the public (there are no licenses for that in UAE currently, though they are working on it).

One of the approved license type from DMCC is for proprietary crypto trading, which does not involve getting funds from the public or operating as an exchange. In that case, trading in crypto is not much different from trading equities. The firm would fund the broker by depositing from the bank and withdraw the trading profits back through the bank.

The main attraction for traders is that this firm is approved by DMCC to do their crypto trading, with the clarity that the profits will not be taxed, unlike in many other jurisdictions, the tax treatment is unclear.
For management of own funds the bank availability is even more worse then for institutional OTC desks, exchanges etc.

Yes - you need to hire a compliance officer but everything else is pretty forward - all the classic Exchanges are available to work with you.

However Management of own funds only a small number of private banks consider you and then again they don't want to see much more activity beside of HODL to charge you high fees like 1.9% brokerage fees.

This private banks by the way onboard you every company if they really want to work with you so every 1k$ BVI or RAK makes it even without a Crypto License because the bank makes the due diligence anyway on you as a private person as well as on your funds - you can even have a completely other business activity on it - a Supermarket can invest his profits in Crypto as well - sounds stupid but makes no difference at the end of the day for the bank that onboards you with Crypto.

If there would be really an advantage with the DMCC license you would need to have access to banks you won't get without a DMCC license and that's simply not the case.

I mean we are talking about 10.000-20.000$ for a company without having more upside then a 1k$ RAK on the banking side.
 

conxentra

New member
This private banks by the way onboard you every company if they really want to work with you so every 1k$ BVI or RAK makes it even without a Crypto License because the bank makes the due diligence anyway on you as a private person as well as on your funds - you can even have a completely other business activity on it - a Supermarket can invest his profits in Crypto as well - sounds stupid but makes no difference at the end of the day for the bank that onboards you with Crypto.
We don’t plan to use the bank for brokerage. The bank transaction will only be when funding the brokerage account, as the funds will be sitting at the brokerage most of the time, except when taking profits back.

You are right in saying that the crypto license is really moot as the firm is trading its own money without dealing with public money. Just like retail traders do not need a license to trade their own money. It’s only the tax treatment that is the advantage here.

In many countries short term trading is taxed. Like in the US at the marginal tax bracket, tax can be ~50% of the trading profits. In such a situation, on a large trading account (> $1M) spending $20K for license to get a tax free treatment is worth it, but only if a bank can be opened. If not, it‘ll be a useless piece of paper.

The fact that DMCC states that they can’t guarntee a bank account opening with the license and recommends using your own contacts instead is a cause for concern.

Would you recommend getting a RAK company instead and try opening a bank account there? The tax treatment will be the same. The crypto license is more for vanity than of real use then :)
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
I don't recommend anything beside of what we setting up but banking wise yes a RAK costs you 1k$ while a DMCC costs you 10-20k$ and in terms of banking both have the same outlook - close to no bank will consider you and the local UAE banks are out of play from the very beginning. That's pretty stupid because you have then immediately a non-resident banking case.

The DMCC Crypto License would be worth the money if it would grant access to local UAE Banks but it doesn't.
 

Dandyline

Active Member
I'm trying to create a company in Dubai for crypto trading (license for a crypto trading business, something that is now offered by the DMCC). I need to select a bank where the business account will reside.
The DMCC explicitly mention in their documentation that "we do not guarantee the creation of a bank account". I guess it's because of the known hostility that banks have to crypto. I still need to try. What I'd like to figure out is which banks are more likely to grant a bank account for my business? I'll use this account for transfers to/from exchanges such as binance and kraken.

Just keep everything in your crypto wallets and use crypto CC for spending.
 

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