Getting Started With Forex Trading In The UAE ?
As far as daily trade volume is concerned, the foreign exchange market is by far the largest in the world. Individual traders are now able to access the market more easily thanks to the internet.
A trillion dollars has been poured into the GCC currency market in recent years, which is trading in the same sectors as London, New York and Tokyo, but with far greater volumes.
This article describes the different ways you can structure a Forex Trading company in the UAE because the UAE has a relatively well-developed financial system and a business-friendly environment.
Investing in forex in the United Arab Emirates: a guide
Providing a comprehensive regulation system and flexible operation choices, the UAE was the first country to establish supporting infrastructure for the financial sector in the region.
As a result of religious law and economic differences, the country has implemented a more Western-style business model that welcomes foreign investors and diversifies investment routes in spite of these differences. Tourism, real estate, aviation, and most significantly financial services have contributed significantly to the UAE’s reduction in dependence on oil and petroleum products in recent years.
The Trade Forex in the UAE
Providing both local and international investors with a comprehensive regulation system and flexibility in their choice of legal entities, the UAE established the first financial sector infrastructure in the region.
A more Western-style business model has been implemented in the country despite religious laws and economic differences, making it more welcoming to foreign investors. During recent years, the UAE has successfully reduced its dependence on oil and petroleum products. Financial services and tourism are the main sources of revenue.
Foreign investors have come to the UAE and established their forex companies and branches due to its world-class infrastructure, business-friendly environment, and mature legal and regulatory system.
In the UAE, you can trade forex with the following companies:
There are three regulated options available for establishing a forex brokerage business in the UAE. You cannot register with any free zone if you want to provide Forex trading services.
We also reveal what happens when you trade with your own money and how to establish a foreign branch in a normal free zone without a regulatory burden.
You can choose from three regulated routes: ADGM, Mainland Company, and DIFC.
The Mainland company
There is no doubt that a Mainland Company gives you access to local markets and customers in the UAE, especially given its 51% local ownership requirement.
For any mainland company that provides forex trading services, regulatory approval is required from the Central Bank of the UAE, as well as a license from the Securities and Commodities Authority (SCA).
Choices of free zones
Several options are also available to potential investors in the UAE to start a financial business, but maintain 100% ownership. There is only one restriction for Free Zone companies: they can’t trade directly with the local market. Dubai’s DIFC and Abu Dhabi’s ADGM are exclusive economic zones for financial services, such as forex trading.
Some UAE free zones even have their own regulatory bodies and courts for authorized service providers, despite the fact that each zone has its own registration regime, procedures, and practices.
ADGM (Abu Dhabi Global Market)
There is an international financial center called ADGM in Dubai, the capital of the UAE. ADGM was established by UAE Federal Decree as a world-class investment environment and infrastructure with three independent authorities – the Registration Authority (RA), the Financial Services Regulatory Authority (FSRA), and ADGM Courts.
A financial services regulatory authority (FSRA) oversees financial entities operating in the ADGM free zone.
Dubai International Financial Center (DIFC)
With its own legal and regulatory system, DIFC is a financial free zone within Dubai. As one of the world’s leading financial centres, DIFC offers financial institutions and businesses a secure and efficient platform for growth and expansion in the region as well as beyond.
Dubai Financial Services Authority (DFSA) regulates forex brokers in DIFC as an independent body and is responsible for overseeing all of DIFC’s financial services.
The Middle East market can be accessed by mainland and free zone companies, plus these companies benefit from 0% taxation and can assist shareholders and employees with residency permits.
The most appropriate location for a representative office would be any normal free zone if you are not planning to engage in forex trading in the UAE or already have a regulated foreign company.
Having a foreign representative office in the country.
The foreign investor may already have established their company elsewhere and obtained the licenses required, but they are interested in expanding their business in the UAE and Middle East. Instead of investing a lot in establishing a new UAE licensed company, investors can establish a representative office in a free zone, like DMCC.
A Dubai presence can be established without applying for a Forex license!
Through its representative office in Dubai, the investor can market its forex products and services to customers throughout the region and connect with them.
Furthermore, these representative offices are also capable of providing forex training services, as well as outsourcing services.
DMCC FZ Companies with particular memberships are also available if you are trading with your own money.
Dubai Multi Commodities Center (DMCC)
It is the global commodities trading center in the Middle East, located in the heart of Dubai.
In the DMCC, forex trading can be done in two ways.
- Incorporating FX, OTC and Exchange Traded Derivatives into its own business activities: A firm that trades Forex or OTC or Exchange Traded Derivatives with counterparties regulated by authorities deemed acceptable by DMCC for their own money is included in this category. Dubai Professional Trading Group membership is required rather than a specific license for the firm.
- Regulated exchanges for proprietary trading: A firm required to join Dubai Gold & Commodities Exchange (DGCX) is defined as one that trades its own money in FX, OTC, and Exchange Traded Derivatives on regulated exchanges.
Foreign investors can choose and decide the most suitable structure in the UAE based on their needs and needs of the country. Many famous forex companies have already set up their offices or headquarters here because of the zero percent corporate tax, the extensive network of double tax treaties, and the business-friendly environment.
Professional specialists in Dubai with knowledge of Dubai’s legal and regulatory systems are part of our Dubai team, which enables us to help you incorporate your proposed company and apply for the appropriate licenses, thus relieving you of the process of preparation and application.
Hear are Some FAQs for your Help
Q- 1 Do I have the option of trading forex in the UAE?
Yes, Traders in UAE can trade forex via local brokers regulated by SCA (Securities and Commodities Authority), central banks, and other regulatory bodies. Several best forex brokers UAE are available to select from. They all have a license.
Q- 2 Does the United Arab Emirates allow forex trading?
Yes, The United Arab Emirates allows forex trading. However, Dubai-based forex brokers must possess a legal license.