Wealthy Expat: Dubai New Crypto Regulations Are Here (Important)

Dubai has introduced a formal regulatory framework for cryptocurrency activities, requiring new licenses and stricter approval processes for companies operating in the sector.

New licensing structure

• Six crypto‑specific licences are now available through free‑zone companies:

  1. Proprietary crypto trading (trading the company’s own assets)
  2. Blockchain services / ledger services
  3. NFT marketplace
  4. Metaverse services
  5. Crypto mining
  6. Crypto mining facility operations

• All licences are issued under the Avada Virtual Assets Regulatory Authority (AVARA), the newly created body that reviews and approves applications.

Approval criteria

AVARA evaluates each applicant to ensure the declared activity matches the licence granted and to prevent money‑laundering or other illicit use. Factors considered include:

• Nationality of the applicant and the source of funds.
• Nature of the activity (trading, mining, providing services, etc.).
• Geographic location of assets or facilities (e.g., mining rigs located outside the UAE are viewed more favourably than those within).
• Whether the company handles third‑party funds (licences for trading on behalf of others or operating a fund face tighter scrutiny).

If the licence is for trading crypto owned by Emirati citizens or residents, a separate, more restrictive licence is required. Trading crypto of non‑UAE clients is comparatively simpler.

Application process

• The questionnaire can be completed in a few days and asks for details on:

  • Funding sources
  • Specific business activities
  • Physical location of the company and its employees
  • Operational description and website

• AVARA’s review is now mandatory; a licence can no longer be obtained automatically upon submission.

Alternatives to a crypto licence

For individuals or businesses that only need to hold or trade personal crypto, or that accept crypto payments without managing third‑party assets, a non‑crypto licence may be more appropriate. Options include:

• Software development licence
• Marketing agency licence
• E‑commerce licence

Dubai offers roughly 700–800 different free‑zone licences, many of which do not trigger the intensive AVARA approval process. Holding a non‑crypto licence still allows the holder to obtain a residence visa and ID, and to trade personal crypto assets without the need for a dedicated crypto licence.

Banking considerations

• Currently, opening a corporate bank account for a crypto‑licensed entity is extremely difficult.
• AVARA’s stricter vetting is intended to purge fraudulent operators, after which banks are expected to extend services to compliant crypto companies.
• Companies operating under non‑crypto licences generally face fewer banking obstacles.

Practical advice for prospective entrants

• Assess the core activity: If the business does not manage external crypto funds, consider a standard free‑zone licence rather than a crypto licence.
• Prepare detailed documentation: Clear descriptions of operations, funding sources, and employee roles will streamline AVARA’s review.
• Engage specialised advisors: The new regulatory framework is still evolving; professional guidance can help navigate licence selection and compliance requirements.
• Monitor regulatory updates: AVARA’s rules and enforcement practices are expected to develop over the coming months, potentially affecting licensing conditions and banking access.

Overall, Dubai’s new crypto regulatory regime aims to create a cleaner ecosystem by separating legitimate operators from illicit actors, ultimately facilitating more reliable banking relationships and a stable environment for crypto‑related businesses.