UAE Web3 & Crypto Laws Workshop by Irina Heaver

Transcript

Who's building in the UAE? Who's looking to move to the UAE, base their project here, and build here? Anybody? No. Oh, there's one gentleman there. That's fantastic. And everybody else, where you guys building at? Internationally. Not building yet. Internationally. Awesome. Which countries? No. US. US Who's offshore? Who's in the Cayman in the BBIS? No one. Fantastic. We'll all move you here to Dubai. Um, I have no idea. just uh it's okay. We'll find the presentation

eventually. Um in the meantime, let me tell you about why UAE is the best place in the world despite the traffic that we've all been seeing coming over here. I'm sure Most of this room is stuck still in in traffic. So UAE was one of the first jurisdictions to implement virtual asset laws in 2018. So while the US still even last year were trying to imprison founders were sanctioning the code. Who remembers what they did with the um uh with the tornado uh protocol, right? They

sanctioned the entire code. I mean it's been overturned by the courts which is fantastic because as a lawyer um reading that uh it was just absolutely shocking how can you sanction a code but you know US managed to do that. So while the US was uh prosecuting the founders, while the US was um uh sanctioning the code, the UAE government was actually welcoming the builders, welcoming the founders, passing the laws and the regulations to um anybody's trying to find the presentation.

No. Um okay, it's there. and through passing the roles rules and the regulations welcoming the founders especially during the pandemic while the world shut down Dubai said no we will stay open we will continue doing business and we will continue um welcoming everyone and we found the presentation which is fantastic uh with the Wi-Fi that we're having now will probably take another few minutes and oh that's is so fabulous. Thank you so much. What a service presentation and a coffee. Um while we're bringing the um this up, I'll introduce myself. My name

is Arena Hever. I'm the first crypto lawyer to start uh practicing in the Middle East. Since then, so that was um in 2016 when my law firm was established to only service web three and crypto founders. And since then, we've advised over 250 projects. We wrote the actual laws and regulations on the Bitcoin cryptocurrency defy. We're advising multiple regulators in the in the region and also in central Asia in Eastern Europe and um absolutely uh delighted working with founders. This is our sweet spot. I love working with founders. As a former founder myself, I know how difficult it is to to build. So, we're doing our best to support you guys.

Okay. What else can we talk about while the presentation is being downloaded? Is it your first time in Dubai? Oh, you guys live here? First time. That's incredible. And yourself? You live here? Third time. Wow. That's like so many new people. What about you, young man? You live here. That is fantastic. Who traveled all the way across the world uh furthest away to come here? Where did you come from, sir? Colorado. That is a really long way away. That's for sure. Colorado is very far away. How was the skiing season this year? Was it good? Fantastic. Oh, that's

fantastic. Oh, that's brilliant. I mean, we can ski we can ski and ski Dubai here, so not the same. But you know almost um where did you travel from? Israel. Whereabouts? Whereabouts in Israel? Tel Aviv. Fantastic. Um several years ago um UAE concluded um Abraham Accords with Israel and they stopped the boycott which is fantastic. We're all for peace. We're all for cooperation. We're all for doing business. We're all for you know running a a coherent society that want to do business. So this is actually a very good development and a lot of

Amiratis were very happy about this because nobody wants disputes. Everybody wants to run business. So today I want to talk about the web 3 and crypto laws and what what does it take to run a business in the UAE if you're a crypto founder? No. How do I use it? Okay, which one?

Okay, a quick disclaimer. This is for educational purposes only. If you have any questions, if you want to talk about your business, come and find me. I'll be very very happy to to um let you know how you can do that here. So, why Dubai? I've been in Dubai for 18 years. This is my home. I came here straight from Melbourne, Australia. I absolutely fell in love with this place and I'm not going anywhere. So 18 years and this is this is my home. And Dubai is named first of all top global destination for business, for travel.

It's the second safest country globally. The UAE is the safest country globally. I mean all with all the mess happening in Europe um Dubai and the whole UAE is a really standout and it's a prime hub for startups Dubai has also been named the best city for expats and what is really cool and gentlemen in the US would probably agree we have zero personal income tax but not for you sorry Uncle Sam would want your taxes and we have 9% corporate tax which is the lowest in the world with a a lot of exemptions. So you of course you can reduce your tax

base but setting up in the UAE and doing business in the UEE sounds really easy but there's a lot of mistakes that I see people doing here. So I've been here a lawyer for 18 years and in the crypto space for nine years and we see the same mistakes like nobody has surprised me yet. It's always the same mistakes operating without a proper legal structure. You cannot run business in the UAE without a legal structure. You actually need to receive a trade license or a business license as it is called to run a business. Did you know that UAE has 45 economic free zones? Who heard about that? 45 economic free zones. Like in

US, if you want to get your company registered, you go to one place, a company registration house or like a company house as for example it's called in the UK. only one place in the UAE we have 45 plus seven more plus three offshore so we'll talk about all that um excitement um regulatory compliance some people think still now in 2025 some people tell me oh but I only run a crypto business I don't touch fiat everything is on chain well it doesn't matter you still have to comply with the rules and regulations oh but I don't uh touch fiat no the laws still apply to you whether you touch fiat or does don't

touch fiat. The laws apply to everyone. Skipping legal documentation contracts. You hire a developer, you don't sign a contract, he runs away with your code, doesn't pass the IP. And we see this all the time. Or you hire a contractor without the terms signed. Bad, bad idea. It's very easy. Agree on the terms, sign it. Doesn't have to be a fancy 60-page contract prepared by a lawyer. Just agree who's doing what and how much will be paid and when. just sign it. Very easy. Um, wrong investment strategy. We see a lot of projects um, selecting wrong investors and then they suffer heavily down the road. And the same with partners. You pick the wrong partner here in the Middle East, you're

not going to move far. You need a partner who knows what's happening and happy to move you forward. So, how would you do things properly in the UAE? First one is the business model. First of all, you have to decide what is it that they you're doing and if it is a regulated activity. For example, virtual assets regulatory activity, if it's a financial services or if it's unregulated because if you start performing regulated activities without the necessary licenses from the regulators, their fines and even criminal liability for the founders and directors. So you have to be very very

careful. What do I mean by regulated activity? For example, if you're looking to run a centralized exchange, I think we all know that it's a regulated activity everywhere in the world. So why would it not be the same here, right? Or and some founders come to us and say, "Oh, we want to start a neo bank." Well, fantastic. Banking is a regulated activity. So let's see how we can help you. So you have to be very very certain what is regulated and what is not regulated. And that is being defined in the business model. I think that's pretty obvious but of course when you're running a business there can be some uh ambiguity. Are we doing this today or you know how will we scale? So there's a

road map also that can be built a regulatory road map. These are the UAE regulators. It's not like any other jurisdiction. We have five regulators. Two years ago we were six. Now we are five. So things are getting better. We have federal regulators, central bank and security and commodity authority. So security and commodity authority that's our esco sorry that's our SEC. I'm sure you all heard of SEC Gary Gendler. So that's our version of SEC. But again they don't prosecute founders. On contrary they're trying to help them. Federal regulator, central bank, they regulate stable coins. So if

you're looking to launch a stable coin, central bank is your regulator. Everything else is security and commodity authority. Then we have two financial free zones, Abu Dhabi global markets in Abu Dhabi obviously and the Dubai International Financial Center DIC and they have their own regulators. Then we have in Dubai a purpose-built virtual assets regulatory authority. The very first in the world, the very first virtual asset regulator in the world was built here in Dubai two years ago. And as of today, they uh licensed 27 companies. So 27

exchanges, custody providers, broker dealers, uh what else is there? um mainly uh some advisory and couple of funds maybe one fund. So they license 27 of them for example OKX, Binance, [Music] Bitco. And you might think why is VR license so interesting? Dubai population is only three million people, right? Why bother? With this license you can actually target Africa, Asia, India. So basically this license from Vara gives you access to three billion people. You cannot target Europe, you cannot target North

America but everywhere else it actually gives you the access to those markets. So it's a very interesting uh proposition. So when you thinking who to go with, so you see we have five, right? We have five regulators. You need to consider uh what is the best regulator for you depending on your business model. You need to map out your uh activities. You need to think about the timelines and the costs because there's always a cost involved. You need to think which regulator is the uh best suited for your activity and go there. And the regulators are actually very easy. You can talk to them. You can meet with them. Next step will be setting up a legal structure. And the legal structure

is basically forming a company. I'm sure you've all formed a Wyoming entity for $100 online. Unfortunately, we're not this cheap and not this quick. Things are taking a bit longer to establish your entity here. And also, if you're regulated, planning to run regulated activities, it will take a little bit longer as well. So, plan ahead of time. Where will you set up this company? Right. Uh we have 45 commercial free zones. We have two offshore free zones, actually three offshore free zones and two financial free zones. And each has specific rules regarding running a business and incorporation. If you're a crypto company, this economic

free zones are the best for you. So you don't need to go through all the 45. Just have a look at some of these. If you're running a financial business, then of course financial free zones of of good for you. But if you're looking to set up a holding company, then the offshore jurisdictions are good for you. And we worked with uh all of these free zones. For some of these free zones, we drafted their regulations. Some most of these free zones we advised on what a bitcoin is, what a cryptocurrency is. Starting back from 2016, receiving a regulatory license will take up to 12 months. So, plan ahead. So, don't think, you know, you'll

submit your application and tomorrow you'll get something. It plan ahead of time. The question is which activities will require a regulatory license? If you're planning to issue your own token or your own virtual asset, you will need to get licensed if you're planning to do it out of here. Also, stable coin issuance will require regulatory approval. Broker dealer, custody, exchange, lending and borrowing, management and investment as well as transfer and remittances. So, all sorts of financial services in relation to virtual assets will require a regulatory

license. Then the next step would be to receive residency permits because if you're planning to live here, if you're planning to reside here, you will need to receive your um visa to work and live here as well as the Emirates ID. And once you receive your Emirates ID, you can go and start opening a bank account because opening a bank account is always required whether even if you're only a crypto company, even paying salaries for your employees, paying rent, um fiat is still the way to go whether we like it or not. People still have a misconception that UAE is a tax haven. We're not. You

need to register for corporate tax. Even if you're in a free zone, you need to register for corporate tax. You need to do your filings and you need to comply with the tax laws. As the American colleagues know here, you know, breaking the tax law, that's how you end up in really serious waters. And of course, there is ongoing compliance. There are audits, there's tax filings, license renewals. You have to follow the data protection laws. You have to follow the crypto marketing laws. So for example, who has a token in the audience? Anybody has their own token? Nobody has a token. But let's say you launch a token tomorrow. You can't

just go and um shill your token in the UIE promising 300% returns and all of that. That is actually contrary to the marketing laws, virtual assets marketing laws. And here are the marketing regulations. Who's a K in the in the audience? Any KS? So if you're a K, you're running your large YouTube channel and you want to tell anybody to and you're trying to shelter your audience, you actually can't do that either because the local regulators are trying to protect general population and you know your grandmother from aping into a token that just got launched tomorrow.

There's some serious penalties like 10 million dirhams as well as um in the emirate of Dubai there's additional penalty of 50 million dirhams 15% of the annual revenue or 300% of the profits gained. So it's really not worth breaking the marketing laws because the penalties can be quite severe. We have a pro tip. If you're looking to run a compliance business, have a calendar. write down all the things you need to comply with because honestly there's quite a few things it's easy to forget. There's one of the things that we've done uh we f we written the founders guide to a UI crypto laws uh in partnership with the local regulator in partnership with DMCC

crypto center and a couple of other big players in the area. So it's absolutely free for everyone if you want to um have a read how to run business and how to um set up your uh business in the UAE. Welcome to the UI. We'll be very happy to have you all here and have you build your startup and run your business here. If anybody has any questions, let me know. If anybody's interested to talk about your uh your business in the in the Middle East, let me know. Thank you very much.

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