UAE offers innumerable opportunities for foreign companies to trade in forex,
CFD and binary options. Being one of the pertinent financial centers in the
Middle East, Dubai and the other Emirates of UAE serve as a base for many forex
traders or brokers and other online trading activities.
Securities Commodities Authority (SCA) of UAE is the regulatory authority for
governing all non-banking financial activities including but not limited to
forex trading, CFD and other online activities. SCA’s primary objective is to
enhance the capital market and stimulate economic growth of the UAE. They are
attracting foreign investments by offering a steady channel and environment to
invest in forex. Besides, Central Bank of UAE also regulates all forex brokers,
whereas SCA issues the licenses.
In parallel with SCA, UAE also has two financial free zones namely Dubai
International Financial Centre (DIFC) in the Emirate of Dubai and Abu Dhabi
Global Market (ADGM) in Abu Dhabi offering activities of Forex Trading, CFD and
other online non-banking financial trading. Dubai Financial Services Authority (DFSA)
in DIFC is an authority explicitly established to regulate forex brokers or
companies performing non-banking financial activities incorporated in DIFC.
It is undoubtedly legal to trade in forex through local brokers regulated by SCA,
Central Bank or other regulatory authorities. Pertinently, any natural or legal
person willing to offer such non-banking financial services within UAE must
establish an entity in the country either in the mainland or in any financial
free zone as referred above, in accordance with the laws and regulations of the
country. UAE strictly prohibits any entity dealing in forex or another online
trading without having a proper license in UAE, obtained through appropriate
This is in accordance with Article 6 of the Law number 13 of 2011 regulating
Economic Activities in the Emirate of Dubai and Article 328 of the Federal Law
Number 2 of 2015 concerning the Commercial Companies Law which confirms that any
foreign company cannot conduct activities within UAE without obtaining a proper
license. Ergo, the company to provide Forex and CFD services in UAE must
primarily obtain a permit from either SCA, DIFC, ADGM or any other regulated
free zone offering such activities.
UAE offers a variety of business registrations for foreign investors willing to
register for forex trading. Considering it is a regulated activity in UAE,
obtaining a license from any free zone would not suffice your purpose. Below are
the most prominent regulated options for establishing a forex trading company in
Option-A (UAE Mainland Company)
As afore-mentioned, a forex trading license can be obtained by setting up a
mainland company in UAE. Department of Economic Development (DED) in Dubai and
in other respective Emirates is the authority issuing licenses for all sorts of
companies in mainland.
Following are the business activities offered by Dubai mainland for forex
trading and other online trading:
- Foreign Shares and Bond Brokers;
- Foreign Securities Promotion;
- Remittance of local and foreign currencies;
- Brokerage in commodities listed in foreign markets;
- Brokerage in securities listed in foreign markets.
Nevertheless, the license for a mainland company mandates the foreign
investor to have a partnership with a UAE national who shall hold minimum 51%
shareholding in the company, however, this shareholding may vary depending upon
the type of the company. In furtherance, unlike free zones Company, UAE mainland
companies are privileged to access UAE markets and all customers freely.
Along with the license from DED, the investor is required to obtain a subsequent
approval from SCA, whereas the company and its services will be regulated by
Central Bank of UAE.
Option-B (Free-Zone Company)
Mandatory requirement of partnership with UAE local sponsor is what majorly
differentiate a mainland company from a free zone entity. Accordingly, two
significant free zones offer licenses for forex trading that is DIFC and ADGM as
they are categorized a financial free zone by the government of UAE.
Nonetheless, the trading companies established in free zones are restricted to
approach the local market for trading directly. In addition, these financial
free zones have their own rules and regulations and even regulatory authorities
governing non-banking financial services providers.
DIFC (Dubai International Financial Centre)
Operated through an independent regulatory authority and having its own legal
system is what differentiate DIFC with other free zones in UAE. Service
providers in DIFC will be governed by the DFSA (Dubai Financial Services
Authority). DIFC offers a wide range of activities to foreign investors with
100% ownership and 0% taxation allures foreign investors to establish their
presence in DIFC.
ADGM (Abu Dhabi Global Market)
In similar lines with DIFC, ADGM is the financial free zone in Abu Dhabi having
almost similar characteristics and provisions as compared to DIFC. ADGM FSRA
(Financial Services Regulatory Authority) regulates all non-banking regulated
activities for online trading.
Option-C (Representative Offices)
Lastly the company can opt for registering a representative office in any of the
free zone available, wherein the most common and affordable for such activity is
DMCC (Dubai Multi-Commodity Centre). This option is best suited for those who
would require presence in Dubai without explicitly applying for Forex Trading
License. It is further pertinent to note that the holding company shall be
undertaking similar activity in other country in order to obtain license for
Majorly, DMCC offers two types of activities in forex trading as follows:
Trading in Forex, OTC and Exchange Traded Derivatives– explicitly involving in
activities based on trading in own money in Forex or OTC with counterparties
regulated by authorities approved by DMCC.
Trading in the proprietary account on regulated exchanges: involving companies
dealing with trading in their own money in Forex or OTC on account of regulated