Innovation has always been a driving force behind the UAE’s economic ambition – and few industries embody that spirit more powerfully than crypto. From launching the world’s first independent regulator for virtual assets, VARA, to implementing a bespoke VAT framework for digital transactions, the UAE is not merely keeping pace with change but is leading by example in shaping the future of the digital economy.
INERODUCTION TO THE UAE
The UAE offers a politically stable, tax-friendly, and innovation-driven environment, making it a top global destination for crypto and Web3 founders. With 0% personal income tax, 9% corporate tax, and no capital repatriation restrictions, the country is pro-business and future-ready. English is widely used in business, and its strategic location bridges Asia, Europe, and Africa.
The legal system supports both civil and common law structures, with clear frameworks for VASPs, stablecoins, and corporate ownership. Founders benefit from 100% foreign ownership, progressive crypto regulations, and fast-track residency options like the Golden Visa.
PROMINENT BLOCKCHAIN, WEB3, AND AIINITIATIVES IN THE UAE
The UAE is not just business-friendly, it’s actively shaping the future of blockchain, Web3, and Al.
From government-backed strategies like the Dubai Blockchain Strategy and the UAE’s Al Vision 2031, to innovation-friendly free zones like ADGM and DIFC embracing tokenization, the country is building real infrastructure to support emerging technologies. Major global players are launching here, supported by a regulatory environment designed to responsibly scale cutting-edge innovation.
ESTABLISHING YOUR CRYPTO BUSINESS
Setting up a Web3 or crypto business in the UAE requires choosing the right structure – mainland, free zone or offshore – each with its own legal, tax, and operational implications. You must obtain a business license (which is different from a regulatory license) and comply with specific requirements if you’re engaging in VASP activities.
Free zones offer benefits like 100% foreign ownership, tax incentives, and simplified setup, while mainland entities may be subject to Emiratisation quotas and Arabic-language requirements. After incorporation, businesses must meet ongoing obligations, including license renewals, UBO filings, data protection, compliance, tax registration, audited accounts, and proper wage payments via the WPS system. Failure to comply can result in fines, blacklisting, or suspension of operations.
RECENT LEGISLATIVE INITIATIVES
100 % FOREIGN OWNERSHIP
Prior to 2022, foreign businesses operating in the UAE mainland were required to partner with a UAE national, who had to hold at least 51% of the company share capital. However, with the release of the new commercial companies law, this requirement has been eliminated for most business activities.
VAT EXEMPTION ON CRYPTO TRANSACTIONS
The Federal Tax Authority (FTA) released the Cabinet Decision 100/2024, exempting exchange transactions of the virtual assets from Value Added Tax (VAT).
This exemption is retroactively applicable to transactions dating back to January 1, 2018.
The public clarification released by FTA further adds that cryptocurrency mining performed on personal account is not subject to VAT.
However, mining conducted under a contract or agreement for another party is considered a taxable supply.
STABLE COINS AND PAYMENT TOKEN REGULATION
On June 7, 2024, the Central Bank of the UAE (CBUAE) introduced the Payment Token Services Regulation (Central Bank Circular No. 2/2024) (PTSR), introducing licensing procedures and operational guidelines for stablecoin-related services in the UAE, both AED-backed and foreign-issued. The PTSR is applicable across the UAE except in the DIFC and ADGM.
https://neoslegal.co/founders-guide-to-uae-crypto-laws-2025-edition