📊 VAT Exemption on Cryptocurrency Transactions
Starting November 15, 2024, all cryptocurrency transactions in the UAE will be exempt from VAT, thanks to Cabinet Decision No. 100 of 2024. This change allows both individuals and companies working with cryptocurrencies to save 5% on each transaction, enhancing investment incentives. Additionally, there is consideration for retroactive VAT reimbursement on crypto transactions dating back to 2018, making the UAE an even more attractive jurisdiction for virtual assets.
📊 Cryptocurrency Regulations and Licensing
In 2024, the UAE introduced important advancements in crypto regulation. In May, the country’s Central Bank established a new licensing framework for stablecoins, and in April, Binance obtained a virtual asset service provider (VASP) license in Dubai. These developments underscore the UAE’s commitment to creating a supportive environment for the growth of the cryptocurrency market.
📊 Tax Benefits for Crypto Investors
UAE tax residents enjoy a major advantage: no income tax on cryptocurrency gains. This benefit applies to both active traders and those who passively hold digital assets. Moreover, by establishing a company in Dubai's free zone, investors can access tax benefits and obtain residence visas.
📊 Rapid Growth of the Web3 Ecosystem
The UAE is now home to 1,500 Web3 companies, employing nearly 7,000 professionals. The crypto and decentralized finance (DeFi) sectors are experiencing rapid growth, with the total value of DeFi services increasing by 74% compared to the previous year.
📊 Major Crypto Events in the UAE
Dubai has become a prime destination for leading international crypto events like the Wiki Finance Expo Dubai 2024 and the Crypto Expo Dubai. The Blockchain Life 2024 forum, held in October, attracted over 10,000 participants, featuring speakers like Paolo Ardoino (Tether) and Yat Siu (Animoca Brands), highlighting Dubai's prominence in the crypto world.
📊 UAE: A Global Hub for Crypto Innovation?
The tax incentives and supportive regulatory policies make the UAE an appealing hub for blockchain companies. However, according to Henley & Partners, the UAE still trails behind Singapore, which ranks first with a score of 45.7 out of 60, due to strong government support and extensive access to digital infrastructure. Hong Kong follows with 42.1 points, noted for its advanced infrastructure and favorable tax policies. The UAE ranks third at 41.8 points, but its position continues to strengthen thanks to strategic policies and expanding infrastructure.
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