In the world of financial markets, the forex market is one of the most profitable and sought-after sectors due to its potential and money-making capacity. Dubai, known for its business-friendly environment, liberal tax regime, and advanced technologies and facilities, provides fertile ground for establishing a forex trading company. The forex trading license in Dubai remains one of the most popular choices.
In this blog, we will explore how to start forex trading in Dubai, the legal requirements, and other essential details.
Forex trading market in Dubai
The forex trading market of Dubai is under significant transformations and growth. In the city, stock market stands out due to its potential to earn money on daily basis. As per recent report issued by the Department of Economic Development (DED), there has been a growth of 6.2%, more than any other Middle East region.
With the extensive support of the UAE government and a thriving financial market, starting forex trading company in Dubai presents numerous opportunities for those interested.
What is forex trading company
Forex trading is a short term used for foreign exchange trading and it refers to the buying, selling and trading of currencies to make profit. A financial service firm that helps people or institutions trade currencies in the foreign exchange market is a forex trading company.
In Dubai, Dubai Financial Services Authority (DFSA) is the primary body that governs forex trading in the city.
Forex trading license in Dubai
Dubai is a lucrative destination to start forex trading business. To establish and run such a business you would need a legal permit from the government which is called the forex trading license in Dubai. This license is issued by the DFSA and is a mandatory requirement for legal operations.
Types of forex trading licenses in Dubai
Here are the major types of forex trading license in Dubai:
DIFC license, also called Category 3A:
DIFC issues brokerage licenses to forex trading companies. With this license, businesses can manage other people’s funds in forex transactions and trade in foreign currency, derivatives and commodities.
DMCC license, also called Category 3:
DMCC issues forex trading license to businesses who wish to trade their own funds in forex markets, over the counter and derivative on regulated exchanges.
Mainland license:
The mainland area of Dubai also offers forex trading licenses. Mainland jurisdiction brings many benefits such as wide opportunities for investment and high potential for growth.
Benefits of forex trading registration in Dubai
Forex trading is quite a profitable business idea in Dubai. There are many forex trading companies in Dubai that are thriving today. Here are the advantages of getting forex trading license in Dubai, UAE:
Strong economy:
Dubai’s economy is one of the fastest growing and most stable economies in the world.
Tax benefits:
Dubai’s tax environment is very liberal. Forex trading companies can save money because of low tax policies.
Well secured market:
DFSA keeps a close look over the forex market of Dubai, making sure it is safe and secure for traders.
Easy business setup:
Starting a forex trading company, like other businesses, is straightforward.
Flexibility:
Forex trading can be done anytime, anywhere. All you need is a device and stable internet connection.
Security:
High liquidity and low transaction costs make the risks manageable in forex markets.
Steps to obtain forex trading company in Dubai
The process to obtain forex trading license in Dubai includes these steps:
1. Do market research:
Try to understand the forex market of Dubai, the risks and benefits associated. This will help you determine the type of license you must choose as per your needs. Research also helps you devise your business plan which includes your goals, how to achieve them, etc.
If you are a novice, you can consider partnering with local brokers for guidance and it is best to start with a small amount invested.
2. Decide the business location:
You must decide if you would operate on mainland or freezone, each jurisdiction has its own advantages, process and legal requirements. DIFC and DMCC freezone are often preferred choices for many.
3. Partner with broker:
While establishing a forex trading company in Dubai, you must also choose and partner with a reliable and expert forex trade broker. The broker you choose must be affiliated with a government agency and must be licensed and regulated by a reputable authority in UAE such as Securities and Commodities Authority (SCA).
4. Forex trading license:
Next apply for the forex trading license with the appropriate authority. The authority will review your application and once they are satisfied that you meet all the requirements, your license will be granted to you.
Please note that license application calls for submission of essential documents and payment of fees. Being meticulous with paperwork is important to avoid delays and rejections. Consider partnering with experts such as Dubiz Business Setup for guaranteed license application.
5. Start trading:
After getting your forex trading license in Dubai, you can start trading legally. Whether high capital stocks or crypto, your license gives you the right to operate in preferred markets.
Legal requirements for forex trading license in Dubai
Here are certain legal requirements that must be met for obtaining a forex trading license in Dubai successfully. Here is the list:
- Valid passport copy
- Visa copy
- Trade name reservation certificate
- Detailed business plan
- Capital adequacy proof
- Resume of all key people showing their knowledge about forex trading
- Financial predictions for next three years
- Operation plan for risk management
- Operation plan for client management
- Initial approval certificate
- External approvals if needed
Please note that there may be additional documents and legal requirements that you may need to fulfil based on your specific business condition. You can partner with business setup experts who can assist you with it.
Cost of forex trading license in Dubai
The cost of Dubai forex trading license is around AED 70,000*. However, to best understand the cost of any type of business setup in Dubai, it is recommended to get in touch with associated experts.
Costs are subject to changes and depend highly on specific business conditions. Experts can offer you better estimation that can help you with budgeting.
Wrapping up!
Are you ready to start your forex trading business in Dubai? Dubiz Business Setup can help you every step of the way. Dubai is the perfect launchpad for forex trading business and Dubiz is the perfect partner for your business setup across UAE.
Your licenses, visas, business bank accounts, tax and accounting, can all be handled by their experts. By shifting your company formation tasks to them, you can focus more on your business goals and strategies.
Book your free consultation with them today!
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