Moving a crypto or virtual asset business to the UAE

Crypto exchanges, brokers, custodians and token projects from Europe, North America and the CIS increasingly look at the UAE as a base. The first question is which regulator applies, because that depends on where the business is set up. The second is how UAE tax applies once it is operating. This guide covers both.

Which regulator applies

• Dubai, mainland and free zones: the Virtual Assets Regulatory Authority (VARA) describes itself as the sole authority regulating virtual assets across Dubai's free zones and mainland, except within the jurisdiction of the Dubai International Financial Centre (DIFC). Its framework is based on Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai, and its Virtual Assets and Related Activities Regulations were issued on 7 February 2023.
• Abu Dhabi Global Market (ADGM): businesses carrying on virtual asset activities must apply for a Financial Services Permission from the Financial Services Regulatory Authority (FSRA). The framework covers trading platforms, brokers, custodians, asset managers and other intermediaries. Tokens with the characteristics of a security are regulated as securities.

Activities VARA licenses

VARA lists eight licensed activities:

• Advisory Services
• Broker-Dealer Services
• Custody Services
• Exchange Services
• Lending and Borrowing Services
• Management and Investment Services
• Transfer and Settlement Services
• VA Issuance Category 1

As described by Clyde & Co, there are no category licences: a business applies for each activity it wishes to carry on, with fees payable per activity. All licensed firms follow the compulsory Company, Compliance and Risk Management, Technology and Information, and Market Conduct Rulebooks, plus the rulebook for each activity they carry on.

How VARA licensing works for a new firm

VARA sets out two stages:

1. Approval to Incorporate. The firm submits an Initial Disclosure Questionnaire to Dubai Economy and Tourism (for the mainland) or to the relevant free zone, with a business plan and details of beneficial owners and senior management, and pays the initial fees. With this approval the firm can complete incorporation and its operational setup, but it may not yet carry on virtual asset activities.
2. VASP Licence. The firm submits the further documents VARA requires, pays the remaining licence fees and the first year's supervision fees, and receives its licence, which may carry operational conditions.

The ADGM process is similar in principle: the FSRA assesses track record, the fitness and propriety of management, and governance and controls, grants approval in principle with conditions, and issues the permission once those conditions are met.

VAT on virtual assets

Cabinet Decision No. (100) of 2024 amended the VAT Executive Regulation from 15 November 2024. As summarised by PwC:

• The transfer of ownership of virtual assets, including cryptocurrencies, and the conversion of virtual assets are exempt from VAT.
• The virtual asset exemptions are treated as effective from 1 January 2018.
• Virtual assets are defined as a digital representation of value that can be digitally traded or converted, excluding digital representations of fiat currencies or financial securities.
• Management services provided to investment funds licensed by a competent authority in the UAE are also exempt.

Exempt supplies can restrict how much input VAT a business can recover, so the VAT position of each revenue stream should be mapped. See our VAT service.

Corporate tax

A UAE virtual asset business is subject to corporate tax in the same way as any other company: 0% on taxable income up to AED 375,000 and 9% above that amount. A free zone company can pay 0% on Qualifying Income only if it meets the conditions to be a Qualifying Free Zone Person, including the list of Qualifying Activities in Ministerial Decision No. 229 of 2025, so this should be checked activity by activity rather than assumed. Transfer pricing rules apply to dealings with group companies and founders. See our corporate tax and transfer pricing services, and our guide to free zone or mainland.

What to do

• Map each activity the business carries on against VARA's list or the FSRA's framework before choosing a location.
• Prepare the business plan, ownership and management information needed for the first licensing stage.
• Review the VAT treatment of trading, conversion and fee income, and the effect on input VAT recovery.
• Model corporate tax, free zone status and transfer pricing for the group, and check the exit position in the home country.

Our company setup and PRO and accounting and virtual CFO services cover incorporation, tax registration and ongoing reporting. Imperial Group does not provide regulatory licensing services; licensing applications are made by the business to the relevant regulator.

Sources

• VARA: Licensed Activities
• VARA: Licence Applications
• VARA: Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai
• Clyde & Co: Dubai's VARA issues Regulations for Dubai Virtual Asset Regime
• ADGM: Digital Assets
• PwC: UAE VAT Executive Regulation amendments
• Ministry of Finance: Federal Decree-Law No. 47 of 2022 and its amendments
• Ministry of Finance: Cabinet Decision No. 116 of 2022 on the annual taxable income subject to corporate tax
• Ministry of Finance: Ministerial Decision No. 229 of 2025 on Qualifying Activities and Excluded Activities

This page gives general information as at the date shown and is not advice for your specific situation. Rules in other countries are summarised for orientation; your home-country position should be confirmed before you act.