How to get a Crypto License in Dubai (5 STEPS / $17,000)
Hi, I'm Manabu.
I've got a crypto license in Dubai.
Here are the things you can get:
- Income Tax: 0%
- Unnecessary Bank Account
- Unnecessary End of the Fiscal Year
The price of the crypto license is around $17,000.
In this article, I will explain it from my experiences.
Table of Contents
- 1. Pros and Cons of Crypto License in Dubai
- 2. Total Price of a Crypto License in Dubai
- 3. How to get a Crypto License (Five Steps)
If you have any questions, please feel free to ask me on Twitter. I don't have a contact form, so please reply to me.
1. Pros and Cons of Crypto License in Dubai
Here is the answer in my opinion:
- Income Tax: 0%
- Unnecessary Employment
- Unnecessary Bank Account
- Unnecessary End of the Fiscal Year
- Dubai Welcomes Crypto Companies
- Must Go to Dubai Once Every Six Months
Let me explain them one by one.
Pros: Income Tax: 0%
Needless to say, this is the best benefit. That said, there is a chance that Dubai ( ≒ UAE) will implement the corporate tax in 2023. But in the "UAE Freezones," where I have established a corporation, there is no tax.
However, here is my concern:
The number of countries that have Pay-Zero-Income Tax is increasing these days. For example, Portugal, Bali, and Georgia are getting many immigrants. But this is obviously a war of attrition. We don't know what happens as tax revenues are reduced.
We don't know the future after five years, but this trend will continue for three to four years, I guess. We live in an era where we can move the corporation easily depending on the benefits granted by the government. So it's better to choose current-best-way to maximize the profit.
Pros: Unnecessary Employment
You don't need to hire employees. I have two companies in Dubai (Business License & Crypto License), but I never hire anyone.
Employment < Freelancers
Nowadays, it's more productive to outsource your task to competent freelancers than hire employees. That's why efficient people tend to be freelancers, and this trend will continue. Here is the data from Forbes.
As you know, some countries have a law that you must hire locals if you want to do business there. For example, Thailand is a country that has a law like that. However, UAE doesn't have it, which is great.
Pros: Unnecessary Bank Account
This is also a huge benefit for the entrepreneur. A very time-consuming process when you start your own business is opening a corporate bank account, right?
But you don't need it anymore, so there is no need for paper things and phone calls from the bankers.
All you have to do is create a crypto wallet. That's it! Also, the earnings go directly into your crypto wallet, which means you can do whatever you want after receiving it. For example, you can utilize the asset within minutes after receiving the earnings.
No Bank = No Constraint
If you feel that there is a problem with the UAE government, you can easily move to another country with your crypto company because you don't need a corporate bank account anymore, which means there is no regional constraint.
You can get your earnings everywhere around the world. The powers are shifting from countries to people. This is a great trend that we can see these days. Countries will battle each other more aggressively to welcome companies with huge profits.
Pros: Unnecessary End of the Fiscal Year
To be exact, you need an end-of-the-fiscal year. But you can finish it within minutes because the crypto company can't have a bank account, so all you have to do is say, "I don't have a corporate bank account, so there are no transactions" to the auditor.
That said, the report must be submitted in a specific format which takes time. However, you can outsource the task to the local agency. The price is around $700~$800, which is pretty cheap, right? For your information, I use Virtuzone as my agency.
Pros: Dubai Welcomes Crypto Companies
Here are the famous companies operating in Dubai:
You know all the companies, right? The UAE government is aggressively attracting crypto companies. This is one of the reasons why I choose to get a crypto license here.
This is a bit off-topic, but there is a license for influencers in Dubai, and I've got one. The word "influencer" spread around the world around 2016, I guess. But the UAE government already has a license for influencers which is cutting-edge and great.
Cons: Must Go to Dubai Once Every Six Months
Here is the demerit: You must go there once every six months.
In my case, I basically live in Bangkok and sometimes go to Dubai for leisure because the price level in Bangkok is much lower than in Dubai, and I really like Thai food (I eat it three to four times a week).
Of course, Dubai is a great country not only for business but also leisure. There are modern-beautiful buildings and delicious Arab food.
However, It was originally a desert, and sometimes more than 50℃. I'm a kind of weak body guy, so I basically live in Bangkok with ease, and occasionally going to Dubai is a great fit for my lifestyle.
This sounds like life-cheating. But for me, my life is like a game. I want to optimize it as much as I can. By the way, you can get a residence visa in UAE after getting your license, which means you can open a brokerage account with no tax.
2. Total Price of a Crypto License in Dubai
Below is the summary of the price:
- Initial cost: $17,000
- Maintenance cost: $13,000/year
The maintenance cost will start from the next year of incorporation. So let me explain in more depth.
The Price will Differ Depending on the Agency
If you want, you can contact many agencies to compare the price. But in my case, I cooperate with Virtuzone as my agency, which is a good company with a quick response, cheap commission, and friendly people.
And I don't have any plan to switch to the other agency because many agencies in Dubai have really bad customer support (e.g: they don't even reply to my message). I'm satisfied with my situation right now.
You must Pay the Fee for your Stock
You need to issue the stock when incorporated. The minimum amount of money is 50,000AED ( ≒ $13,000). In my case, I issued my stocks at a minimal price, and I had to deposit the money ($13,000) into the corporate bank account.
However, we don't have a corporate bank account because we are a crypto company, right? So you don't even deposit your money into the bank. Instead, you have to send a bank statement that shows you have enough amount of money in your personal bank account. It's highly productive. Great.
You need Insurance for your Visa
To get a residence visa in the UAE, you must sign up for insurance. In my case, I paid around $120,000 for cash-value life insurance. I use MEDLIFE insurance.
Is $120,000 too expensive for the insurance?
Actually, I don't recommend you buy this kind of insurance from the perspective of the commission of buying stocks, which is expensive, meaning that you are losing your money.
But why did I sign up for that? Because I want to have a good relationship with the bank manager. I don't know if it will pay off or not. Anyway, if you want to save your money, there is cheap insurance, which is around $250. I got this information from the agency that I use: Virtuzone.
3. How to get a Crypto License (Five Steps)
Below is the five steps to obtain the crypto license:
- STEP1. Choose the Region of Incorporation
- STEP2. Decide the Name of your Company
- STEP3. Submit the Documents to the Gov
- STEP4. The Gov issues your Crypto License
- STEP5. Get the Residency Visa in the UAE
That's it. The difficult part is STEP3, which includes the submission of your business plan. The other steps are easy. Let me explain.
STEP1. Choose the Region of Incorporation
You need to decide your region of incorporation. In short, you should better to choose DMCC, which is the most common choice for the crypto company.
Before writing this article, I asked two agencies that I trust about the region. And both of them said, "DMCC is the best choice." If you want, you can contact some agencies and ask about it. But I guess the answer is the same.
How to Choose your License?
After deciding on the region, you need to choose your corporate license. You can select the license from the below:
- Metaverse Service Provider
- NFTs E-Marketplace Provider
- Distributed Ledger Technology Services
- Proprietary Trading in Crypto-commodities
For more detail, I've created a Excel data. That said, most of people have no clue about how to choose from them. It's the same with me. That's why we ask the agency about that, right?
In my case, I chose "Proprietary Trading in Crypto-commodities," which my agency recommended. Your choice depends on your business plan, so it's better to discuss the agency.
*FYI: People who have a deep knowledge of crypto will realize that there is some inconsistency in the sentence of a crypto license, which is because crypto is emerging technology. That will fix in the near future, I guess.
STEP2. Decide the Name of your Company
This is an easy step: submit three company names you wish.
In my case, I submitted like below:
- MANABU Crypto DMCC
- MANABU Company DMCC
- MANABU Crypto Company DMCC
In the end, the name became "MANABU Crypto DMCC." I know it's not cool, but I don't care. I decided within minutes. By the way, you must include "DMCC" at the end of your corporation name.
STEP3. Submit the Documents to the Gov
There are several documents that you must submit, but the things that need to explain are below:
- Submit your Resume
- Submit your Business Plan
As for the resume, here is an example that I submit. It's not difficult, right? If you need some help, you can ask your support to your agency.
How to Submit your Business Plan
I was struggling with this step because, at that time, I thought I would decide on the details of my business plan after establishing my crypto company.
Which caused the business plan to be vague. So, the UAE government asked me many questions, which caused the delay. To avoid it, it's better to include the answers to the following questions in your business plan:
- What kind of business will you do?
- How many people will you plan to hire?
- Which market will you target and why?
- Which blockchain network will you use?
- What kind of revenue model will you make?
In my case, the submitted business model is "influencer business," that I disseminate the information to my followers and make them my customers. The explanation is vague, so it took time to be allowed.
STEP4. The Gov issues your Crypto License
Finally, you can get a trade license, the license you must have when you do business in the UAE, after finishing the steps here. And you must update the license every year.
If you establish your company in the DMCC region, then the yearly price of a trade license is around $13,000. The price depends on the region you choose. By the way, the discount will be applied if you renew it for 2 to 5 years at once, instead of every year.
STEP5. Get the Residency Visa in the UAE
Lastly, you need a residency visa because you will be the first employee under your crypto company, which means you need a visa to work in the UAE. You will get a residency card like so:
わーい、ドバイにて「住民カード」を獲得しました。これがあると現地サービスなど全て契約できるので、便利です😌 pic.twitter.com/2Yc8u6q0wH— Manabu (@manabubannai) February 14, 2021
*Translation of my tweet: Yay! I got a residency card in the UAE. I can make a contract with local services, whatever I want here.
All you have to do to obtain the residency visa is just wait until the gov sends it to you. Sometimes it takes three to six months. In my case, a month. By the way, you can start your asset utilization in the UAE without tax.
The Obligation to keep your Visa
You must enter the UAE once every six months. It's easy.
For example, you can do it like "Enter the UAE airport → Get a stamp from immigration → Go to other countries." That said, Dubai is a great place to visit that has beautiful buildings, delicious Arab cuisine, and many exciting activities like skiing(Though it's a desert!).
It was my first experience living in an Arab country, and sometimes I was surprised by the difference in the culture. But I've learned a lot. Also, I could practice my English skills. *I'm still learning English, which is difficult for the Japanese like me.
You can Open your Personal Bank Account
After obtaining your resident visa, you can open your personal bank account. But you can't open your corporate bank account.
FYI: If you really want to open your corporate bank account, you can ask your agency. Once I asked them, they said you could open it in different countries. But I don't know the detail because I don't need it. If you want, you can ask the agency: Virtuzone.
Okay. That's all of my explanation. If you have any questions, please feel free to ask me on Twitter. I don't have a contact form, so please reply to me.