Crypto
Mar 28, 2025
The DIFC crypto license is a key player in the Web3 Dubai narrative, attracting countless digital asset firms to the region. However, for many, the prospects of setting up a business in Dubai can quickly lose their charm once they confront the legal complexities.
Luckily, this guide will break down everything you need to know about the DIFC crypto license to help you get expert legal solutions on web3, so you can focus on growing your business instead of worrying about compliance. Ape Law is dedicated to helping crypto businesses succeed. Our web3 legal experts can help you reach your objectives, such as getting expert legal solutions on Web3, to minimize the risks of operating in a new jurisdiction.
Table of Contents
Who Uses DIFC Crypto License?
Crypto Token Issuers: Who They Are and What They Do
Entities interested in issuing and creating crypto tokens within the DIFC must adhere to regulations set by the DFSA. These regulations include strict compliance and disclosure requirements to ensure that only recognized crypto tokens are introduced into the market, maintaining transparency and investor protection.
Authorized Market Institutions: A Detailed Look
AMIs that wish to admit crypto tokens for trading, or perform clearing and settlement services, are required to obtain the appropriate licensing from the DFSA. This includes operators of Alternative Trading Systems such as Multilateral Trading Facilities (MTFs) and Organized Trading Facilities (OTFs) that facilitate the trading of crypto tokens.
Alternative Trading System Operators: What You Need to Know
Firms operating platforms like MTFs and OTFs for crypto token trading must secure DFSA authorization. This ensures that trading activities are conducted in a regulated environment, promoting market integrity and investor confidence.
Digital Wallet Providers: What Are the Rules?
Companies offering custody and storage services for crypto tokens, commonly known as digital wallets, are subject to DFSA regulations. They must implement robust security measures and comply with anti-money laundering (AML) and counter-terrorist financing (CTF) obligations.
Financial Services Firms: What Licenses Do They Require?
Licensed firms intending to advise on, arrange, or manage crypto assets are required to obtain the relevant endorsements from the DFSA. This includes ensuring that their activities align with the DFSA's regulatory framework and that they possess the necessary expertise to operate in the crypto market.
Related Reading
• Is Crypto Trading Legal in UAE
• UAE Crypto
• VARA License Cost
How to Set Up a Crypto Business in DIFC
1. Use Ape Law for Legal Solutions
Ape Law offers legal solutions for setting up a crypto business in the UAE. Setting up a crypto business in the UAE can be complex, but their team of Web3-native legal experts makes it smooth by handling crypto licensing, business structuring, and compliance so you can focus on growth. Whether you’re launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, their team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to easily navigate the legalities of creating a Web3 business in the UAE!
2. Define Your Business Model
Before applying for a DIFC crypto license, define the exact nature of your business. The licensing requirements will vary depending on your business model:
Crypto Exchange
Platforms facilitating the buying, selling, and trading of cryptocurrencies.
Crypto Wallet Services
Companies providing digital asset storage solutions.
Blockchain Consultancy
Advisory services focused on blockchain technology and crypto compliance. Identifying your business model early will help streamline the licensing process.
3. Apply for a DFSA License
A DFSA license is mandatory for all crypto businesses operating in DIFC. The licensing process involves:
Submitting a pre-application outlining your business activities.
Providing a detailed business plan, financial projections, and risk management framework.
Compliance with AML/KYC regulations to prevent financial fraud.
After submitting your application, the DFSA will conduct a review before granting final approval.
4. Register Your Company with DIFC Authority
To legally operate in DIFC, you must register your company with the DIFC Authority by following these steps:
Choose a legal entity structure (LLC, branch, or partnership).
Submit all required documentation, including the business plan, shareholder details, and financial records.
Obtain the commercial license from the DIFC Authority.
5. Open a Corporate Bank Account
Once your crypto business in DIFC is registered, you’ll need a corporate bank account to make financial transactions. While some banks hesitate to work with crypto firms, DIFC partners with crypto-friendly financial institutions.
6. Secure Office Space in DIFC
DIFC requires all businesses to have a physical presence through a dedicated office space or a coworking facility. DIFC offers modern office solutions tailored to crypto startups.
7. Ensure Compliance with AML/KYC Regulations
All crypto businesses must implement stringent AML and KYC policies to prevent financial crimes. This includes:
Verifying customer identities.
Monitoring transactions for suspicious activity.
Reporting financial risks to the DFSA.
8. Launch Your Crypto Business in DIFC
You can officially launch your business after meeting all legal and regulatory requirements. Developing a strong marketing strategy and networking with investors and partners in DIFC will help accelerate your success.
How to Obtain a DIFC Crypto License in 8 Simple Steps
1. Opening Conversations with the DIFC
The process begins with an official meeting with the DIFC. The project receives a thorough overview, including intended operations and future expansion plans. By the end of the meeting, the DIFC will expect the submission of a Letter of Intent. This document expresses a formal interest in establishing operations in the DIFC.
2. Crafting a Regulatory Business Plan
The regulatory business plan is the backbone of the application to the DFSA. It must be comprehensive, covering details like the business model, revenue streams, corporate governance and management, control mechanisms, risks associated with operations, and any other aspect relevant to the proposed business. After the first draft is completed, the DFSA reviews it quickly. They will either confirm that submissions can proceed or request a rework of the draft.
3. Submitting the Formal Application to the DFSA
Next, the applicant submits the formal application to the DFSA. This comprehensive submission includes the regulatory business plan, financial model, manuals and policies, KYC and other details on the shareholders, directors, controllers, senior management, and IRAP/ICAAP reports, if applicable. The DFSA application fee must also be paid.
4. Undergoing a Detailed Review Process
The DFSA conducts a detailed review process for all applications. An assigned case officer reviews the application and sends the applicant a list of clarifying questions. This process can take two to three months. Multiple rounds of follow-up queries and clarifications are standard. The DFSA will also interview the Senior Executive Officer, Compliance Officer, and controllers to understand the project and their roles better.
5. Receipt of In-Principle Approvals
A satisfactory review process at an internal DFSA authorisation committee meeting results in the DFSA issuing an In-Principle Approval (IPA). The IPA states that the DFSA welcomes the applicant to the centre, subject to the completion of conditions stated in the IPA. These conditions usually include setting up the legal structure, opening the bank account, and depositing the share capital.
6. Navigating the DIFC ROC Process
The DIFC Registrar of Companies is the body that processes applications for setting up legal structures in the DIFC. The applicant must secure office space within the DIFC as part of this process. The process ends with the issuance of the DIFC Commercial License.
7. Opening a Bank Account
The firm must open a bank account with a local bank. This process can take one to two weeks. The share capital must be deposited into the account once it is opened.
8. Making the Final Submission to the DFSA
Finally, the applicant submits evidence of fulfilment of the in-principle conditions to the DFSA. After a review, the DFSA issues the Financial Services Permission to the applicant firm, allowing it to conduct business from the DIFC.
Related Reading
• VARA UAE
• VASPs
• DMCC Crypto License
Benefits of DIFC Crypto License
The DIFC License: Your Golden Ticket to Crypto Business Success
The DIFC license provides a robust legal and regulatory framework. The DIFC is designed to support cross-border activities and appeals to foreign businesses looking to establish a base in the UAE. The legal framework supports international standards, and companies can benefit from the following:
Legal Framework Supports Cross-Border Activities
The DIFC’s legal structure supports cross-border activities, making it an ideal location for crypto firms engaging in international business. English law governs the DIFC, and the independent Dubai Financial Services Authority (DFSA) regulates firms in the zone. The DFSA adopts a risk-based approach to regulation, which is especially beneficial for crypto businesses that may not fit into existing financial services categories.
100% Foreign Ownership Permitted
Unlike other jurisdictions in the UAE, companies established in the DIFC are not subject to local sponsorship requirements. This means foreign investors can have 100% ownership of their businesses without paying fees or giving up control to a local partner.
No Restriction on Foreign Talent or Employees
Another attractive feature of the DIFC company license is that it allows businesses to hire foreign talent without restrictions. This is particularly important for crypto firms that often rely on technical expertise from overseas.
No Restrictions on Capital Repatriation
The DIFC also imposes no restrictions on capital repatriation, meaning that companies can transfer their profits and any other funds to their home countries without interference from the UAE government.
Tax Benefits of the DIFC License
In addition to the favorable legal framework, the DIFC provides attractive tax incentives that can lead to significant savings for crypto companies. These include:
Zero Tax for 50 Years on Profits, Capital, or Assets from 2004
The DIFC offers a 50-year guarantee for zero taxes on profits, capital, and assets. This concession has been available since 2004 and applies to all businesses operating in the free zone.
Zero Tax on Employee Income
The tax benefits of establishing a business in the DIFC also extend to employees. Crypto companies will not have to pay taxes on their staff's income, making it much cheaper to hire talented individuals.
Counterparty Confidence
Establishing a crypto business in the DIFC can enhance your reputation with partners and potential clients. This is especially important in cryptocurrency, where companies are often viewed with suspicion.
Highly Regarded, Independent Regulator
The Dubai Financial Services Authority (DFSA) is the DIFC's independent regulator. It is highly regarded and operates to international standards.
Independent, English-speaking, Common Law Judicial System
The DIFC has a judicial system distinct from the UAE legal system. This independent, English-speaking, common law judicial system is especially beneficial for foreign businesses unfamiliar with local laws and regulations.
Diverse Ecosystem
The DIFC boasts a large and diverse ecosystem that can help your crypto business thrive.
Central to Regional Deal Making
The DIFC is a central hub for business activity in the Middle East. It is particularly well-positioned to facilitate deal-making between African, Asian, and UAE firms.
High Concentration of International Firms
The free zone has a high concentration of international firms, investment funds, wealth management firms, banks, and financial institutions.
World-Class Regional and International Law and Auditing Firms
The DIFC is home to several world-class regional and international law and auditing firms and other professional services.
The Largest Fund Domicile in the Region
The DIFC is the largest fund domicile in the region, making it an attractive location for crypto firms looking to set up structured products or investment vehicles.
Geographic Epicentre
Setting up operations in the DIFC allows crypto firms to be closer to their target markets.
Management Offices, Holding Companies, and Family Offices Are Located Closer to the Assets They Own or Manage
Establishing a business in the DIFC means that management offices, holding companies, and family offices can be located closer to the assets they own or manage. This particularly benefits crypto firms looking to improve efficiency and reduce costs.
The Middle East, Africa, and South Asia (MEASA) Is Increasingly the Centre of Gravity for the Global Economy
The DIFC is strategically located at the crossroads of the Middle East, Africa, and South Asia (MEASA), which is increasingly becoming the centre of gravity for the global economy.
Dubai Plays a Central Role in the Growing South-South Trade, Principally Between Asia and Africa
As a global city, Dubai has excellent connectivity and is central to the growing South-South trade, principally between Asia and Africa.
Well-Positioned to Equip the Potential of Emerging Markets
Setting up a crypto business in the DIFC will allow you to tap into the enormous potential of emerging markets and facilitate better trade and investment between these regions and developed economies. Setting up a crypto business in the UAE can be complex, but Ape Law makes it smooth. As Web3-native legal experts, we handle crypto licensing, business structuring, and compliance so you can focus on growth. Whether you’re launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to easily navigate the legalities of creating a Web3 business in the UAE!
