Our valued sponsor

License needed to trade stocks/cryptos with own funds in Dubai/UAE?

#21
Register now
You must login or register to view hidden content on this page.
gaz0001 said:
I read all the above.
I learned nothing.

I reside in the region.
I know around 50 or so traders in UAE.
Nobody pays tax. Everyone understands and is 100% certain their profits are tax free.

Most have been in Dubai for 10+ years.
A few just come i the recent crypto bull market purely to cash out tax free and settle down in Dubai.

What the exact legal rules are, I expect there will never be a clear answer.
I expect it's also by design.
Click to expand...

If you know 50+ traders living/working in UAE I'd be interested to discuss with some of them. In particular, It would be quite valuable to know if they have consulted a lawyer (not only a tax advisor) rather recently, and which decrees/rules the latter relied their position on.

Please note that this thread is not about taxation, it is about licensing and compliance. Though, if you/your friends have sources justifying an exemption (for full time traders) I'm more than interested.
 
  • Like
Reactions: RAGAV
#22
Thomas67 said:
If you know 50+ traders living/working in UAE I'd be interested to discuss with some of them. In particular, It would be quite valuable to know if they have consulted a lawyer (not only a tax advisor) rather recently, and which decrees/rules the latter relied their position on.

Please note that this thread is not about taxation, it is about licensing and compliance. Though, if you/your friends have sources justifying an exemption (for full time traders) I'm more than interested.
Click to expand...
No offence,but I doubt my Associates would be interested in talking to an Internet stranger. It's also something I don't have any desire to get involved in.

Not sure if you have ever spent any time in UAE or any of the GCC countries?
The idea is,that you don't ask any questions,you just get on with it.
I would not need to ask anyone if they have consulted a tax advisor or lawyer.
The answer is no.
If you were to consult a tax expert, they would simply not reply to you, ignore all your calls and emails.
There would be not a single word of feedback.
This is common in this part of the world - it is part of the charm I guess.

With regards to licencing.
You can do a few things.
Few guys work part time and trade part time. So no form of license to trade.
Few guys do not work,and just have a property, which gives you an investor visa.
And then a few people wanted to open companies so that they could take equity against their company and trading profits.
You can do a few things here.
Stay under the 100k usd Profit and pay 0%, and anything else ontop you earn through personal and not company, or go over the 100k and pay the corp tax. Depends what the books need to say to secure funding for property or whatever they are up to.
 
Last edited:
#26
gaz0001 said:
No offence,but I doubt my Associates would be interested in talking to an Internet stranger. It's also something I don't have any desire to get involved in.

Not sure if you have ever spent any time in UAE or any of the GCC countries?
The idea is,that you don't ask any questions,you just get on with it.
I would not need to ask anyone if they have consulted a tax advisor or lawyer.
The answer is no.
If you were to consult a tax expert, they would simply not reply to you, ignore all your calls and emails.
There would be not a single word of feedback.
This is common in this part of the world - it is part of the charm I guess.
Click to expand...

There's no offense, no worries. So your answer is that none of your associates or contacts has ever consulted regarding this matter, fair enough. And that lawyers do not provide any advice or, more formally, legal opinions as services in the country, well noted.

gaz0001 said:
With regards to licencing.
You can do a few things.
Few guys work part time and trade part time. So no form of license to trade.
Few guys do not work,and just have a property, which gives you an investor visa.
And then a few people wanted to open companies so that they could take equity against their company and trading profits.
You can do a few things here.
Stay under the 100k usd Profit and pay 0%, and anything else ontop you earn through personal and not company, or go over the 100k and pay the corp tax. Depends what the books need to say to secure funding for property or whatever they are up to.
Click to expand...

Looks like the sense of my question about the license requirement for full time traders (incl. cryptos) hasn't been well understood, but that's fine, thank you for your time and reply. I won't further comment on this.
 
#27
@Thomas67 & @daniels27 - this conversation is turning a bit weird. I really have no skin in the game, so i need not get too involved.

I would like to re-clarify my overall point though, because it seems it was lost in the sillyness.

In the GCC where a law is not 100% clearly understood, it will be interpretted differently by everyone, until there is a practical implementation of the law/ruling.

Practically, what this means on the ground - you do whatever is most logical and in line with what is already known.

So - whats happening today.

Personal money, personal trading, no cgt, no income tax, no licence.
Company money, company tax, company license.

If you ask 10 different tax lawyers in UAE about this 1million AED Turnover & 9% Corp Tax rule, you will get 8 no replys, and 2 polar opposite answers. (Go ahead and give it a shot).

What i have shared is purely practical knowledge from feet on the ground.
 
  • Like
Reactions: Redhue, manukahoney, PhantomOf ThePits and 2 others
#28
@Thomas67 I have no heat in this either. But I can tell you something. @gaz0001 is right. We discussed similar things many times. You don't need to worry. But don't look for a definite confirmation as you will not get that. And btw this is not only like this in the UAE, there are also things in the US which with like this. As a general rule, as long as there is no court case not a law requiring you to do anything if let anything, you probably are safe to go. If there was only one case, the world would be taking about.
 
  • Like
Reactions: Redhue and Thomas67
#29
Actually I believe the answer to the main question of this thread is more simple than expected.

It is provided by combining the commercial transaction law and the decrees related to the corporate tax:
- Investing, holding, swing trading over several days/weeks or more (what most people do in Dubai/UAE) => personal investment => no license, no CIT
- HFT, day trading, scalping, using sophisticated tools, (likely) trading derivatives, (likely) trading Forex (can't be seen as an investment) => a commercial business => license required (as for any business), and CIT applies (with possible exemptions - threshold on income/sales proceeds, small business tax relief)
 
Last edited:
  • Like
Reactions: RAGAV
#31
Thomas67 said:
Actually I believe the answer to the main question of this thread is more simple than expected.

It is provided by combining the commercial transaction law and the decrees related to the corporate tax:
- Investing, holding, swing trading over several days/weeks or more (what most people do in Dubai/UAE) => personal investment => no license, no CIT
- HFT, day trading, scalping, using sophisticated tools, (likely) trading derivatives, (likely) trading Forex (can't be seen as an investment) => a commercial business => license required (as for any business), and CIT applies (with possible exemptions - threshold on income/sales proceeds, small business tax relief)
Click to expand...
A source as a complement, slightly different perspective emphasizing the frequency, organized activity level, continuity, etc... https://houranipartners.com/navigating-the-uae-corporate-tax-as-a-natural-person/
 
#32
Thomas67 said:
Actually I believe the answer to the main question of this thread is more simple than expected.

It is provided by combining the commercial transaction law and the decrees related to the corporate tax:
- Investing, holding, swing trading over several days/weeks or more (what most people do in Dubai/UAE) => personal investment => no license, no CIT
- HFT, day trading, scalping, using sophisticated tools, (likely) trading derivatives, (likely) trading Forex (can't be seen as an investment) => a commercial business => license required (as for any business), and CIT applies (with possible exemptions - threshold on income/sales proceeds, small business tax relief)
Click to expand...

It makes sense to take a license to defend ourselves. But the problem is I am not sure which license is the most suitable and appropriate that covers my trading activity. Most of the freezones did not have an activity that covers stocks, equity derivatives on international regulated exchanges.
I was concerned about potential misuse of license in case it was discovered by authorities at a later point of time.

If only there was a specific license issued by any of the freezones for Freezone LLC for
"1. Trading in securities, all kinds of derivatives (equity, currency, commodities, OTC) on local and international regulated exchanges. "
it would have been far more clearer and straightforward.
 
#33
RAGAV said:
It makes sense to take a license to defend ourselves. But the problem is I am not sure which license is the most suitable and appropriate that covers my trading activity. Most of the freezones did not have an activity that covers stocks, equity derivatives on international regulated exchanges.
I was concerned about potential misuse of license in case it was discovered by authorities at a later point of time.

If only there was a specific license issued by any of the freezones for Freezone LLC for
"1. Trading in securities, all kinds of derivatives (equity, currency, commodities, OTC) on local and international regulated exchanges. "
it would have been far more clearer and straightforward.
Click to expand...
I understand your concerns but it goes beyond the scope of this thread - feel of course free to create one if useful for you. But to answer your question, I'm pretty sure DIFC and DMCC cover these activities, also depending on the instrument, just ask them; Interactive Brokers (broker for local and international regulated exchanges) has set up its branch at DIFC.
 
#34
Don said:
Its a rather complex question and depends on many factors, e.g., f you limit your trading to the platforms that are locally regulated/licensed, do you trade just stablecoins against FIAT and vice versa or trade other tokens like utility tokens.

That being said UAE Cybercrime law criminalises acts related to unlicensed cryptocurrency trading and behaviour that promote or encourage the unlicensed dealing in cryptocurrency that is not officially recognised in the UAE. The full scope of federal civil and criminal penalties is applicable to all activities related to cryptoassets, and regulated persons must comply with AML/CFT laws.
Click to expand...
Thanks again for your view. In your opinion, what do most traders/investors residing in UAE do, considering the limited number of listed tokens, their lower liquidity, the possible restrictions for margin/futures trading (quite annoying as well for traders) and, in addition to AML/CFT laws, the possible application of CIT for traders?
 
#35
RAGAV said:
It makes sense to take a license to defend ourselves. But the problem is I am not sure which license is the most suitable and appropriate that covers my trading activity. Most of the freezones did not have an activity that covers stocks, equity derivatives on international regulated exchanges.
I was concerned about potential misuse of license in case it was discovered by authorities at a later point of time.

If only there was a specific license issued by any of the freezones for Freezone LLC for
"1. Trading in securities, all kinds of derivatives (equity, currency, commodities, OTC) on local and international regulated exchanges. "
it would have been far more clearer and straightforward.
Click to expand...
The topic can actually be extended to the more practical questions, it's a good idea.

Has someone a view on the cheapest/easiest option for a licensed trading activity (e.g. crypto, stocks), in mainland or freezone, freelance or company, being Dubai or Abu Dhabi?
AFAIK, we have the following in terms of regulators:
- mainland Dubai: SCA+VARA
- freezone Dubai: the freezone regulator (DFSA for DIFC, CMA for DMCC (possibly), DWTC authority)+VARA
- mainland Abu Dhabi: SCA+?
- freezone Abu Dhabi: the freezone regulator (FSRA for ADGM)
 
Last edited:
#36
Thomas67 said:
The topic can actually be extended to the more practical questions, it's a good idea.

Has someone a view on the cheapest/easiest option for a licensed trading activity (e.g. crypto, stocks), in mainland or freezone, freelance or company, being Dubai or Abu Dhabi?
AFAIK, we have the following in terms of regulators:
- mainland Dubai: SCA+VARA
- freezone Dubai: the freezone regulator (DFSA for DIFC, CMA for DMCC (possibly), DWTC authority)+VARA
- mainland Abu Dhabi: SCA+?
- freezone Abu Dhabi: the freezone regulator (FSRA for ADGM)
Click to expand...
why would this be needed if you just use your personal funds in your personal accounts esp if it has characteristics as a hobby?
Maybe look into DIFC which is outside Vara or RAKDAO in Rak?
Vara seems more for "real" businesses which trading is not (no employees, no goods, no customers, nor suppliers).
 
#37
JackAlabama said:
why would this be needed if you just use your personal funds in your personal accounts esp if it has characteristics as a hobby?
Maybe look into DIFC which is outside Vara or RAKDAO in Rak?
Vara seems more for "real" businesses which trading is not (no employees, no goods, no customers, nor suppliers).
Click to expand...
Because active/frequent trading can be seen as a commercial business (commercial transaction law - speculation, and virtual assets works). Ofc very occasional trading, ideally close to personal investment wouldn't be an issue indeed.

DIFC is clearly feasible (FZ's AML/CTF constraints on the activity to be clarified), though perhaps not the cheapest option I assume among those listed. Curious to see if options exist in mainland (Dubai/Abu Dhabi) or if doesn't make sense when using foreign brokers/exchanges (and would actually require locally regulated ones).

Agreed on VARA: 'personal investment' is out of scope, only AML law compliance (very restrictive) is required in this case. Service providers are obviously regulated. Though, there's a grey area in between: 'personal trading', personal shows there is no service, but active trading can be seen as a commercial business depending on the trading style.
 
#38
Thomas67 said:
Because active/frequent trading can be seen as a commercial business (commercial transaction law - speculation, and virtual assets works). Ofc very occasional trading, ideally close to personal investment wouldn't be an issue indeed.

DIFC is clearly feasible (FZ's AML/CTF constraints on the activity to be clarified), though perhaps not the cheapest option I assume among those listed. Curious to see if options exist in mainland (Dubai/Abu Dhabi) or if doesn't make sense when using foreign brokers/exchanges (and would actually require locally regulated ones).

Agreed on VARA: 'personal investment' is out of scope, only AML law compliance (very restrictive) is required in this case. Service providers are obviously regulated. Though, there's a grey area in between: 'personal trading', personal shows there is no service, but active trading can be seen as a commercial business depending on the trading style.
Click to expand...

did you check RAKDAO? It doesnt get any coverage here, but it seems for real. I also met up with a person who stated its legit, but have not tried myself nor do I know personally anyone who switched to this, its a pretty new initiative: https://www.rakdao.com
Having a Rak thingy is also no big deal as you can still be wherever in the emirates with the visa besides the one or the other trip there (not far).

It could / should address a lot of these issues.

They have these activites which might are good enough, but the list is more than that:
* c15 holding company
* lots of web3 stuff
* c24 prop trading
* c03 dlt stuff
 
Last edited:
#39
JackAlabama said:
did you check RAKDAO? It doesnt get any coverage here, but it seems for real. I also met up with a person who stated its legit, but have not tried myself nor do I know personally anyone who switched to this, its a pretty new initiative: https://www.rakdao.com
Having a Rak thingy is also no big deal as you can still be wherever in the emirates with the visa besides the one or the other trip there (not far).

It could / should address a lot of these issues.

They have these activites which might are good enough, but the list is more than that:
* c15 holding company
* lots of web3 stuff
* c24 prop trading
* c03 dlt stuff
Click to expand...
Looks like a quite interesting option indeed, thanks for suggesting. I don't know if there are many other options out there allowing prop trading or blockchain related activities with such a flexibility of packages.

Will reach them out to assess business requirements and dig into the regulation. Curious to see the level of tolerance vs foreign brokers/exchanges in the context of standard prop trading activities.
 
#40
Thomas67 said:
Looks like a quite interesting option indeed, thanks for suggesting. I don't know if there are many other options out there allowing prop trading or blockchain related activities with such a flexibility of packages.

Will reach them out to assess business requirements and dig into the regulation. Curious to see the level of tolerance vs foreign brokers/exchanges in the context of standard prop trading activities.
Click to expand...
it seems pretty chill (and i have been assured it is chill). You can even use bitcoin as unit of account apparently. The difficulty is getting the bank account, but they told me theres some partnership etc, so it would be possible.

But as you know, you can only tell after you have done it yourself how it really is.
I wanted to pull the trigger on this a while ago, but life came in the way.
 
  • Like
Reactions: Thomas67
Register now
You must login or register to view hidden content on this page.
You must log in or register to reply here.
Offshore Bank Accounts

Forum Announcement

Latest Threads

The Kingdom Bank
Top Bottom
Back