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February 1, 2023

Is Dubai the best option for Crypto Founders?

Is Dubai the best option for Crypto Founders?

As crypto founders consider their strategies for taxes, regulations, and lifestyle, one common question they face is whether their home country is the best location for their projects or if they should look to relocate elsewhere.

Dubai, in the UAE, is rapidly becoming the world’s top crypto hub and a popular destination for market participants, such as investors, traders, and project founders.

Dubai offers several attractive features to crypto founders, including tax benefits, a strong crypto ecosystem, international travel connectivity and a high quality of life which when combined, make it the perfect option for founders and development teams.

Tax Advantages

Relocating to Dubai can offer crypto founders zero percent personal income and capital gains tax, making it especially beneficial for those receiving token or equity incentives.

While it’s important to take personal tax advice and consider home state requirements, the newly published UAE tax residency criteria allow for obtaining tax residency with as little as 90 days spent in the UAE.

For crypto founders who often travel to attend conferences and events, or wish to travel and live a more nomadic life, this is a great advantage.

Strong Crypto Ecosystem and Community

With a large number of crypto market participants in the UAE, there are numerous opportunities for networking and building relationships through year-round crypto and blockchain events.

A number of prominent Web 3 venture capital funds have relocated their fund structure, management companies or key personnel to the UAE and a significant number of crypto HNWIs, it’s a strong environment for fundraising.

This is all reinforced by the government’s commitment to innovation and future economies through initiatives like the Dubai Blockchain Strategy and Dubai Metaverse Strategy, as well as the launch of the world’s first crypto regulator, the Virtual Asset Regulatory Authority, it’s no wonder many crypto founders are considering Dubai.

Headquarters and Intellectual Property Holding

One common challenge for crypto founders launching decentralized projects is finding a suitable location and corporate structure for a software development or “Labs” company that will employ the core team and develop and own the intellectual property.

Economic Substance Regulations for IP holding companies can be difficult to meet in popular crypto jurisdictions like the Cayman Islands and British Virgin Islands where other elements of a corporate structure may be established, but Dubai offers a viable alternative with its social infrastructure as a leading metropolitan city, global travel routes, pro-expat immigration policies and personal and corporate tax benefits.

Once incorporated, a company can easily arrange employment and investor visas to support relocation of founders and the core team.

How can Cavenwell help?

As a Dubai Licensed Corporate Services Provider with Web 3 expertise, Cavenwell can assist with UAE company formation, freezone and license type consultancy, visa processing and relocation support.

With international coverage and an innate understanding of the blockchain & crypto industry, we can also assist with company formation and substance solutions in key crypto jurisdictions around the world.

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