Dubai Forex License

Dubai is an international financial hub and business destination. The government goes in for a wider scope for economic development in Dubai by motivating enterprise growth and innovation within the emirate. Strategically located to connect various continents, together with a reputable regulatory framework, a tax-free environment, and an active financial ecosystem, Dubai offers a unique opportunity to foreign exchange brokers and forex-related firms to attain legitimacy and expand into the international arena.

Dubai Forex licence cost

Advantages of Obtaining a Dubai Forex License

With the best infrastructure available that can complement the business at the topmost level, Dubai boasts of being the right hub for forex trading. The presence of several multinational banks and financial houses in the city provides contact access to basic financial services, liquidity providers, and customized banking solutions that a forex business may well require. Equipped with excellent telecommunication and technology infrastructure, Dubai offers high-speed connectivity and seamless forex trading, round the clock, to enable forex brokers to execute fast and smooth trades.

Further to that, Dubai plays host to major international events and expos, such as the Forex Expo Dubai 2024, which no doubt will be a great way for forex businesses to present their services, connect with future clients, and receive international exposure.

Boasting of being rightly positioned for forex trading, Dubai has world-class infrastructure that best supports business. Many multinational banks and financial houses are domiciled in the city, offering easy access to basic financial services, liquidity providers, and customized banking solutions for forex businesses. Due to the excellent telecommunication and technological infrastructure, Dubai provides high-speed connectivity; one can carry out flawless forex trading round the clock, hence enabling forex brokers to carry out fast and smooth trades.

Forex Regulations in Dubai

Dubai has a number of free zones in which Forex companies can register their businesses and obtain licenses from various and different regulatory bodies. The Dubai Financial Services Authority or DFSA is responsible for the licensing and supervising of forex businesses operating within the Dubai International Financial Centre (DIFC) — one of the region’s most prestigious financial free zones. DIFC implements a regulatory framework based on the principles of English Common Law. Such a policy is put in place to maintain the integrity, stability, and transparency of the financial activities under the DIFC jurisdiction, inclusive of forex trading.

Transparency remains a well-defined trademark by the DFSA while considering its approach to the regulation of business and its cooperation with other respected authorities worldwide by means of sharing standards and best practices regulation.

The DFSA regulates Forex companies in accordance with the following laws and regulations amongst others:

• Regulatory Law of 2004
• Markets Law 2012
• Federal Decree-Law No. (20) of 2018on Anti-Money Laundering and Combating the Financing of Terrorism
• Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Module (AML)
• Conduct of Business (COB) Rulebook
• Financial Crime Prevention (FCP) Rulebook
• Client Money and Assets (CMA) Module

The Law Regulating Financial Services and Markets in DIFC is the Regulatory Law of 2004. It confirms independence concerning regulatory functions by DFSA. In this regard, this law provides a mandate to DFSA in licensing, inspecting, investigating violations, and sanctioning regulated entities. This law also describes what the financial institutions, such as forex businesses, must do to obtain the required authorizations.

The integrity of market practices and conduct, and provisions for maintenance against the abuse of financial markets, insider trading, and fraud activities, all fall under the ambit of Markets Law 2012, DIFC. Forex brokers have to be transparent in their trade by following high standards of conduct.

FEDERAL DECREE-LAW NO. (20) OF 2018 purports to amend certain provisions concerning the combating of money laundering and financing of terrorism in the UAE. The law articulates the due diligence requirements to be performed on customers, record-keeping, risk assessment, and reporting obligations. This has been one of the commitments of the United Arab Emirates to the set international standard in preventing financial crimes.

Besides DIFC, the other important free zones for Forex companies include:

• Dubai Multi Commodities Centre: DMCC regulates the authority behind commodities trading.
• Dubai Airport Free Zone: The authority behind the control of this zone falls to the DAFZ Authority and allows a variety of businesses.
• Jebel Ali Free Zone: It may be considered the largest and oldest free zone in Dubai. This may be the basis of support under the authorities of JAFZA Authority.
• Dubai Silicon Oasis: Its authority, specialized in technology and innovation, falls under the DSO Authority.
• Types of Forex Licenses Available in Dubai

Several types of forex licenses are available in Dubai, each tailor-made for your business model and type of forex-related activity. Their validity does vary depending on the type and the negotiations made with the regulatory authority of the free zone chosen.

The main types of Dubai forex licenses are:

• AF License: Best suited for companies offering a wide range of financial services that include forex trading. This license is usually provided for 1-3 years.
• Authorized Market Institution License: This license targets those companies that act as exchanges or trading platforms for forex instruments. This too is usually valid for 1-3 years.
• Representative Office License: This would be applicable to those companies that want some sort of physical presence for marketing or networking purposes. No financial activity can be performed, and most of them are issued on a yearly basis.
• Authorized Individual License: It targets individual professionals doing their activities within the forex business, usually valid for one year.
• Limited License or Innovation Testing License: Although not exactly a forex license, it allows creating fintech innovation and can be used for startups or businesses testing new forex technologies. Validity: Determined by each particular case upon assessment.

Forex License in Dubai

Requirements for Applicants of Dubai Forex License

Obtaining a license for forex in Dubai, especially inside DIFC or other free zones, has certain regulatory requirements. While these vary depending on the type of license you have applied for, here are the essential prerequisites you should know about:

• Legal Entity Incorporation: The applicant must be a body corporate incorporated in the DIFC or any designated free zone, such as branches or subsidiaries thereof. The time incorporation is still supposed to take a few weeks, depending on the type of proposed business entity and completeness of application. General legal entities can take the following forms, including but not limited to:
• FZCo
• Recognised Company – RC
• Special Purpose Company – SPC

For the Dubai forex license, your legal entity should satisfy the subsequent conditions:

• Minimum Capital: It ranges from half of the estimated gross operating cost for the coming 12 months or at the discretion of the licensing authority.
• Licence Application Fee: This depends on the license type and kind of activities that are to be operated; however, the fee falls between 36,000 AED to as high as 183,000 AED, from approximately 9,000 to 47,000 EUR.
• Adequate Management: The management team is considered appropriate, meaning key staff, including but not limited to directors and compliance officers, should be ‘fit and proper’ according to the requirements of the licensing authority.
• AML/CFT Policies: Implement the necessary internal AML/CFT policies.
• Risk Management Framework: Develop sound risk management framework for forex activity.
• Compliance Framework: Maintain prescribed regulatory standards.
• Technology Infrastructure: Ensure platforms for trading are steady and cybersecurity is guaranteed.
• Insurance Coverage: Take relevant insurance cover—professional indemnity insurance in this case.
• Liquidity Providers: Prove access to appropriate liquidity providers and market infrastructure.
• Regulatory Commitment: Have a commendable commitment to adhering to internationally accepted regulatory standards and best practices.

Documents to be submitted for the Forex Brokerage License application, Dubai

• Business Plan: The document must explain the activities, business model, risk management practices, and compliance policies.
• Audit Statements: Statements of the past years showing financial stability must be provided.
• Identity Proof: Passport copies of shareholders, owners of the beneficial interest, and key personnel.
• Bio-data: Curriculum vitae of all key personnel.
• Proof of Address: Proof of residential address for each shareholder, director, and key personnel.
• AML/CFT Internal Policies: Describe in detail the policies and procedures related to the prohibition of money laundering and financing terrorism.
• Compliance Book: Compliance Manual, statements regarding compliance with the regulations, clients’ complaints, and reporting.
• Operational Plan: Mention plans that show infrastructure, technology, and resources to operate forex trading.
• Ownership Structure Information: Information about shareholders and beneficial owners.
• Proof of Minimum Capital Requirement: A proof that indicates compliance with the requirements of the capital.
• Draft Client Agreements: Terms and conditions, risk disclosures, and client trading agreements.
• IT Policies: Cybersecurity and data protection policies.
• Proof of Insurance: Evidence of adequate insurance cover.

Please note that the DIFC uses English as the regulatory and rule-making language. The DFSA accepts only English language documents and correspondence pertaining to the forex license application process. If a certified translation is required, this is provided on a cost-effective basis.

How to Open a Forex Company in Dubai

The very first thing you will have to do is select the most appropriate form of doing business in Dubai for your forex company. Of all types, a Free Zone Company is very suitable for forex business because it ensures main advantages concerning tax and simplifies the regulatory regimes.

Main Advantages of FZCO

• Full Foreign Ownership: 100% foreign ownership is allowed.
• Tax holidays, including zero percent corporate tax.
• Easy setup: A company is comparatively fast and easy to set up.
• Operational flexibility: The requirement of the business can be accommodated.
• International market access for trading.

Requirements for Setting Up Forex Focused FZCO in Dubai

• Shareholders: At least one shareholder.
• Directors: At least one director; it may be the same as the shareholder.
• AML Officer: He has to appoint an Anti-Money Laundering officer.
• Office Space: Office has to be in DIFC or selected free zone.
• Corporate Bank Account: To be opened with any local or international bank.
• Visas: For the shareholders, directors, employees – accordingly it will be required.
• Registered Agent: He has to be in the selected free zone.

Incorporating a New Forex Company in Dubai

• Registered Agent: He shall assist you through the incorporation process.
• Company Name Reservation: He has to ensure that the name reserved does not conflict with any of the requirements.
• Preparation of Documents: All the documents are to be prepared.
• Key Appointments: You need to appoint shareholders and the respective directors.
• Visa Applications: If any, all key appointments must obtain visas.
• Application for Incorporation: Filing of all the documents with the concerned free zone authority. Obtain License: After approval, gets your license for forex.
• Open Bank Account: Opens a corporate bank account.
• AML and Compliance Setup: Establishment of AML and compliance functions.

Dubai Forex License Renewal Process

The forex license is issued for a period of one year and is renewable every year. To ensure the entire processing of renewal goes smoothly, the following steps are recommended:

• Initiate the process for renewal at least two months in advance from the date of expiry.
• Get all your documents ready for submission.
• Pay the renewal fees that may become applicable.
• Check any revised regulations prior to the renewal process.

Ongoing Requirements of Forex Licensees in Dubai

The ongoing requirements with respect to maintaining a forex license in Dubai refer to continued adherence to the regulatory regime. License holders need to keep themselves informed about changes in regulations; additionally, they need to revise internal processes as changes become effective. Free flow of information with the regulatory authority will avoid misalignments.

Some Key Ongoing Regulatory Requirements

• Routine Financial Reporting: Routine proper financial reporting on the status and results of one’s business in the forex periodically.
• AML/CFT Effective Procedures: Provide reasonable measures to combat anti-money laundering/combating the financing of terrorism.
• Risk Management Implementation: Enhance the procedure with regard to the safeguarding of client funds and financial viability by way of the segregation of the client funds from the firm’s operations money.
• Principles of Recordkeeping: Keep full and accurate records of all transactions, every client communication, and compliance practices in general.

Setting up a Forex company in Dubai requires serious planning and meeting regulatory standards. If you know what you need to do to provide the best, then navigating the licensing landscape in operating a very successful Forex trading operation in this bustling financial center will be absolutely easy.

If it is your intention to open a forex business and get licensure in Dubai, then our team here at Regulated United Europe will be more than happy to help with the setup of a forex company and application for a license. We can also confidently lead you through the process of finding a viable forex license for sale and buying a ready-made forex business solution in the shortest time possible. With us on your side, dedicated legal advisors, tax experts, and financial accountants will be able to guide you easily through all the processes of opening a Forex firm in Dubai in the most frictionless, smooth, and transparent way. If interested, then contact us now for a personal consultation to set the stage for long-lasting success.

Also, lawyers from Regulated United Europe provide legal services for obtaining a Lithuania crypto license.