Dubai Crypto Company Experience

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CarteBlanche

New member
Just wanted to share my experience on here after engaging proper lawyers in the UAE. Almost all crypto activity is considered a regulated activity in Dubai. Any business consultants selling dubai corporate structures for things like ICO's (token offerings), DeFi platforms, Crypto exchanges, DAOs etc. are doing so negligently (possibly illegally?) and you will end up in trouble with regulator(s). The advice from lawyers was to establish a development company in dubai, to employ devs and staff etc. and then issue tokens using a BVI company (with legal advice from BVI lawyers) and a further BVI or Cayman company/foundation for operating the protocol. Following a referral from the lawyers, i ended up working with a specialist crypto corporate services provider based in Dubai, but who actually do most of their work offshore. Not the cheapest, but proper professionals who have done it 100 times before.

For those who are actually looking to obtain a regulatory license, Dubai is a great option, i've had multiple meetings with our lawyers (big magic circle law firm) and the new Crypto regulator in Dubai (VARA) as well as the regulators in DIFC and ADGM. It's a rigorous application process but it's possible to open channels of communication and discuss requirements and obtain your license.

If you're looking to play in the unregulated space though, doing so through dubai companies is dangerous. I understand the one exception is a NFT marketplaces for which you can actually get a license for, but token offerings and blockchain protocols are a big no.

Hope this helps others looking down a similar path, or who don't have the funding to spend big money on the lawyers to work this out like i did. Please be aware the many dubai company set up agents, i was told multiple times that i could structure my business and token offering through a dubai company (in various freezones) which was entirely false. Avoid the charlatans.
 

hlepic211

New member
Just use a Dubai or any EU company as a software development company and issue the tokens or whatever under a BVI. Then find a crypto friendly bank in Liechtenstein or Switzerland for the Dubai or EU company, dump the tokens on the normies on any exchange that you'll get listed (KYC as a BVI company), and give the proceeds as a loan (USDT) to the Dubai/EU company.
 

calnana

New member
Did you have any discussions regarding trading your own personal funds with regulators? Is that a regulated activity?
 

khinkali

Silver Member
Thank you for posting your experience!

I assume that you looked at the specific crypto business activities in DMCC before deciding to use BVI/Cayman for the token?

Avoid the charlatans.

To be fair, 9/10 people here asking about crypto and Dubai just want to "cash out" their holdings without CRS, so their home country doesn't find out. They seem happy with what they get.
 

Nicholas Van Orton

Entrepreneur
Luxembourg new directive for virtual assets (of 2020) makes it a very straightforward and cost-effective option as well. The added bonus of being a tax transparent entity. Much overlooked.

NVO
 

Nicholas Van Orton

Entrepreneur
Can you elaborate which entity you referred to?
What do you mean what entity? It's a standard holding company (the GP in a fund) that modifies its articles of incorporation toregister as a securitization/tokenization vehicle. Not to confuse with a VASP (virtual asset service provider), which is meant for exchanges basically. You can read about VASPs here:
Virtual Asset Service Providers: Luxembourg's landscape

NVO
 

overnbeyond

Mentor Group Gold
Token issuance in UAE must be accepted by DFSA - Dubai Financial Services Authority on a case basis and it is a rigorous process, there are so many factors to consider;

AML/CFT risks associated with the token
Transceperancy of the project, holders, tech and protocol, etc...

Keep in mind only entities incorporated in DIFC or ADGM can carry out such regulated activities.


Cashing out crypto in Dubai is relatively easy using the appropriate channels and one must be careful as there are lots of scams too.
 
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