Cryptolicense in Abu Dhabi (ADGM): A Comprehensive Guide

DISCLAIMER: The term “cryptolicense” in this text refers to a license to operate companies that provide services related to virtual assets or a permit to provide financial services. The use of the term “cryptocurrency license” is intended solely to simplify the perception of the text by clients and visitors of the website.

Abu Dhabi Global Market (ADGM) has established itself as a leading trendsetter and the world's leading market for the regulation of virtual assets. This impressive success has been driven by a number of progressive financial technology initiatives and the introduction of the region's first regulatory framework for cryptocurrency assets. Located in the heart of the UAE's capital city, the free zone is strategically positioned on the picturesque Al Maryah Island.

Operating in line with international best practices through a transparent and innovative regulatory framework, a business-friendly operating environment, the application of English common law and independent legal jurisdiction, and well-established local and international strategic partnerships, ADGM provides unique services and creates opportunities for its business community to thrive.

A number of attractive benefits are available to companies incorporated with ADGM. Among them are the absence of any foreign ownership restrictions, unimpeded repatriation of profits, exemption from withholding taxes, and access to a wide network of favorable tax treaties. This favorable business climate, along with progressive regulation of virtual assets, creates an ideal environment for innovative businesses to thrive in this dynamic financial technology hub.

The Financial Services Regulatory Authority (FSRA) oversees the virtual asset sector in the ADGM.

The Financial Services Regulatory Authority (FSRA) oversees the virtual asset sector in the ADGM

Key Numbers about Cryptolicense in ADGM

minimum 1

director in a company must be natural person

minimum 1

shareholder in a company

$20,000

application fee

0%

corporate income tax (CIT) rate up to 2026 year if income less than €758,000

0%

personal income tax (PIT) rate

5%

value added tax (VAT) rate

Legal Opinion about Cryptolicense in ADGM

Ganna Voievodina

Manimama, CEO

”At this time when blockchain and cryptocurrencies are rapidly evolving, obtaining a cryptolicense in the global ADGM marketplace is not just a strategic decision; it is a testament to our commitment to maintaining the highest standards of performance. As CEO of Manimama OU, I can confirm the unparalleled benefits that come with being part of the ADGM ecosystem. In a market where trust and reliability are paramount, the prestige associated with ADGM lends unprecedented credibility to cryptolicenses.”

Types of Activities with License in ADGM

Managing of virtual assets: it means managing someone else's virtual assets with discretion.

Operating as virtual assets custodian: it means storing virtual assets for another entity and only taking action based on verified instructions from that entity or on its behalf.

Exchange services operating a Multilateral Trading Facility (MTF): it means running a multilateral trading facility where virtual assets are traded. It looks like crypto exchange.

Arranging in virtual assets: it means arranging deals for someone else to buy or sell a virtual asset, either as the main party or as an agent.

Dealing in virtual assets: it means engaging in buying or selling virtual assets, or subscribing for or underwriting financial instruments as the principal.

Advising in virtual assets: it means offering advice as for buying or selling a specific virtual asset whether acting for themselves or on behalf of someone else.

Benefits of Obtaining a Cryptolicense in ADGM

Tax environment:
  • No restrictions on repatriation of profits.
  • The UAE's extensive network of double tax treaties helps minimize tax liabilities internationally.
  • Comfortable business environment and infrastructure:
  • ADGM is at the center of a financial ecosystem that includes major banks, financial institutions and a variety of service providers.
  • ADGM attracts highly skilled talent from around the world in finance and technology.
  • Innovative regulatory environment and sandbox:
  • ADGM is known for its flexible and progressive regulatory environment that adapts quickly to changes in the sector and market requirements.
  • The regulatory sandbox allows companies to test innovative products and services in a controlled environment, encouraging the development of new technologies.
  • Reputation and investor confidence:
  • A cryptolicense from a respected and well-regulated jurisdiction such as ADGM significantly enhances the company's reputation.
  • Builds trust among investors and partners, making it easier to raise funding and establish business relationships.
  • Choose the Package of Services

    Step 2

    Setting up a company

    Starts from: €25,000

    • Recommendations for choosing a legal structure of a company
    • Preparing application form and additional documentation as required (such documentation includes e.g. information about the beneficial owners and senior management of the company)
    • Paying the initial fees required to start the application process
    • Сompleting operational preparations (including renting office space, hiring employees, etc.)
    • Obtaining a visas, work permits
    • Opening a bank account
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    Step 3

    Applying for a cryptolicense

    Starts from: €25,000

    • A call with FSRA to discuss the project's business plan, documentation and compliance
    • Submit the draft / final application form, and any documentation required, along with the application fee
    • Obtaining initial approval
    • Obtaining a cryptolicense (Financial Services Permission)
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    Step by Step Description

    Step 1. Preparation stage

    Preliminary project analysis and preparation of power of attorney for client attestation, consultations as for ADGM`s law, gathering documents from the client to start the process of company incorporation and obtaining the license

    Step 2. Due diligence and negotiations with FSRA Group

    Preparing the business model to FSRA with its explanation and further demonstrating adherence to all relevant FSRA rules and requirements

    Step 3. Submission of a formal application

    After negotiations with FSRA and upon FSRA's satisfaction that the applicant's business processes, technologies, and capabilities have reached an sufficiently advanced stage, the applicant must submit a completed Application Form along with supporting documents to FSRA

    Step 4. Providing In Principle Approval (IPA)

    FSRA will review the application and supporting documents submitted by the applicant. An IPA will be granted to applicants who can fully comply with all relevant rules and requirements. Additionally, when granting an IPA, FSRA may impose extra conditions and requirements for final approval, which the applicant must meet

    Step 5. Granting of final approval (Financial Services Permission)

    Once satisfied that the applicant has met all the conditions set in the previous stage, FSRA will grant the applicant cryptolicense for the relevant regulated activity

    Step 6. Testing "operational startup"(only for MTV)

    MTVs must complete the "operational launch" testing phase to be agreed by FSRA, including completion of third party verification of the applicant's systems

    Understanding the ADGM Requirements

    The ADGM's regulation of virtual assets is integrated into the broader financial framework outlined in the Financial Services and Markets Regulation

    The ADGM's regulatory framework for virtual assets is based on international regulatory standards that cover the full range of associated risks, including those related to money laundering and financial crime, consumer protection, technology management, custody and exchange operations. The framework is also supported by ADGM's strong rule of law through the direct application of English common law, which provides legal certainty and convenience for transactions conducted on its market.

      The ADGM's regulation of virtual assets is integrated into the broader financial framework outlined in the Financial Services and Markets Regulation. This regulatory strategy has successfully contributed to the development of a dynamic and competitive cryptocurrency market.

      Requirements for Obtaining a Cryptolicense in ADGM

      To obtain a cryptolicense from FSRA, an applicant must have a physical presence in ADGM

      To obtain a cryptolicense from the FSRA, an applicant must meet the following requirements:

      • have at least 1 director (at least 1 must be natural person) and at least 1 shareholder
      • Approved and Recognized Person Statuses (APS-1 and RPS-1) must be obtained with application procedure
      • have a physical presence in ADGM to conduct virtual asset activities from ADGM
      • comply with AML/CTF requirements (taking appropriate steps to identify and assess the money laundering risks to which they are exposed; having customer risk assessment systems in place and customer due diligence; establishing robust governance structures, particularly in the area of information technology management; appointing a senior and independent Money Laundering Reporting Officer (MLRO); record keeping)
      • comply with anti-bribery and corruption requirements
      • have a share capital, which varies depending on the type of activity, must be in fiat form (the following requirements apply to the size of the share capital: exchanges of virtual assets (multilateral trading platforms are required to have a share capital equivalent to 12 months' operating expenses; other persons engaged in activities that involve virtual assets are required to have a share capital equivalent to 6 months' operating expenses)
      • undertake regulated activities only with respect to accepted virtual assets (FSRA has the right to identify each accepted virtual asset that will be permitted to be used by an Authorized Person under the ADGM to prevent potentially risky activities involving illiquid or “immature” virtual assets); the applicant will be required to provide details of each accepted virtual asset it proposes to use

      Taxes in ADGM

      There is no personal income tax and no capital gains tax in ADGM

      There is no personal income tax and no capital tax in ADGM.

        ADGM currently has 2 main taxes:

        • Corporate income tax (CIT) - the standard CIT rate is 9%. But CIT is 0% for the following qualifying activities: in particular, ownership of shares and other securities; ownership, management and operation of ships; fund management services subject to regulatory supervision by the competent authority in the state; capital and investment management services subject to regulatory supervision by the competent authority in the state, etc. Until December 31, 2026, a taxable person whose income for the relevant tax period and previous tax periods does not exceed the threshold of AED 3,000,000 (approximately €758,000) is not subject to corporate tax
        • Value added tax (VAT) - the standard VAT rate is 5%

        Frequently Asked Questions

        • What is a cryptolicense in ADGM?
          A cryptolicense in ADGM allows companies to legally conduct activities related to cryptocurrencies.
        • What are the basic requirements to obtain a cryptolicense in ADGM?
          The basic requirements include providing company documents, meeting AML/CTF requirements, physical presence in ADGM, obtaining Approved and Recognized Person statuses, etc.
        • What types of activities can be carried out with a cryptolicense with ADGM?
          With a cryptolicense, one can engage in virtual asset management, activities as a custodian of virtual assets, exchange services, entering into transactions using virtual assets, buying or selling virtual assets, and advising on matters relating to virtual assets.
        • What advantages does the ADGM jurisdiction offer to cryptocurrency companies?
          ADGM offers clear regulation, tax benefits, access to global markets and a high degree of legal protection.
        • Which companies can apply for a cryptolicense with the ADGM?
          Any company that meets the requirements of the ADGM and has submitted the necessary documents can apply for a cryptolicense.
        • How long does it take to obtain a cryptolicense from the ADGM?
          The process of obtaining a license can take up to several months depending on the completeness of the submitted documents and fulfillment of all requirements.
        • How does ADGM's policy contribute to the development of cryptocurrency business?
          The ADGM policy aims to create an enabling environment for innovation, transparent regulation and support for crypto business.
        • What kind of protections does ADGM offer for cryptocurrency companies?
          ADGM offers legal defense, world-class arbitration services and fully digital litigation through ADGM eCourts.

        Client Feedbacks

        "The level of service from Manimama OU was exceptional, I greatly appreciate their proficiency in navigating cryptocurrency regulations in ADGM & Dubai."

        "I commend Manimama OU for their thorough grasp of cryptocurrency regulations, enhancing the quality of their legal assistance."

        "Navigating ADGM's cryptocurrency regulations was made effortless with Manimama OU's exceptional legal support."

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