Dubai: The Next Rising Financial Hub with Greater Potential

Cyprus is well known for its highly-developed capital development, particularly in the forex sector. It benefits not only from its geographical location between Asia and Europe, but also from its super-low corporate tax rate, only 12.5% as an EU member, compared with 19% in the UK. Although the government raised the tax rate to 15% at the end of 2021, it is still much lower than the average of the EU, which is attractive to a large number of EU investors and companies in the Eurasia continent.

However, Cyprus has its own disadvantage: As a small island of 9,000 square kilometers with approximately 1 million population, it does not have easy access towards the continent. Companies set their office in Cyprus for preferential policies, not local customers.

In this sense, Dubai, which is not so far from Cyprus, is gaining more momentum in recent years. Known as the "Pearl of the Gulf", the international city of Dubai is located in the middle of Africa, Asia, and Europe. Thought it is only a city of the UAE, its size is 4 times higher than Cyprus, with a larger population of 3.32 million. Forex brokers are more prone to find and onboard customers here.

Other than geographical advantages, Dubai's regulation mechanism also creates an enabling environment for all types of companies engaging in financial business. The Dubai International Financial Centre (DIFC) in the Emirate of Dubai is a financial free zone, and the Dubai Financial Services Authority is the established regulatory body to regulate forex brokers or companies performing non-banking financial activities incorporated in DIFC.

The prominent ways in operating FX business in the UAE includes:

Option 1: Founding a local company based in the UAE, which is under the supervision of the Department of Economic Development (DED) in Dubai and in other respective Emirates.

Nevertheless, a mainland company would require a license issued by the DED, which mandates the foreign investor to establish a partnership with a UAE national who should posses no less than 51% of the shares in the company. Though a UAE mainland company is privileged to access the UAE markets and all customers freely, its high threshold discourage many foreign investors.

Option 2: Registering a representative office. It works best for companies who engaging in forex trading business with an aim to increase presence in Dubai without applying for forex trading license.

Option 3: Establishing a company within DIFC. DIFC offers a wide range of activitie, such as credit, banking, asset management, futures, securities, commodity derivatives, to foreign investors with 100% ownership and 0% taxation allures foreign. Now there are 546 DFSA-authorized companies in the region. Advanced transport, telecommunication, Internet infrastructures are also a guarantee for business success. Similar to FCA and other reputable regulatory bodies, DFSA also handles customer compliant and protects legitimate interests and rights of retail customers.

Dubai's population strength is another reason why it is increasingly favored by fintech companies and forex brokers. Well-known forex brokers with presence in Dubai include Hantec, Accuindex, Multibank Group, Avatrade, XM, Swissquote, Pepperstone, CapitalXtend, ThinkMarkets, to name a few.

Dubai also takes the lead when it comes to cryptocurrency. Crypto.com also announced to set an office there. FTX and Binance were also granted crypto trading license to operate in the region.

Dubai's government officer, Sheikh Mohammed Bin Rashid commented that the emirate had enacted its first law governing virtual assets and had also formed an independent regulator to regulate the cryptocurrency sector.

So why not come to Dubai and see how attractive it is! Fazzaco is going to hold a grand expo at Festival Arena on October 12-13. It is a gathering place of forex brokers, crypto exchanges and fintech companies, with dozens of leading executives delivering speeches in the event!

With bigger booths and larger benefits, Fazzaco Expo aims to bring more exposure to all exhibitors. Now half of the booths have been sold out. Contact event@fazzaco.com and save your booth now!