The UAE’s push to become a leader in blockchain technology has not gone unnoticed as crypto firms are racing to set up shop in the country. Consequently, according to recent reports, Indian crypto firms are also considering the move.
A mass Exodus?
A recent report from UAE news agency, Khaleej Times, reveals that several Indian blockchain startups are planning a move to the Middle East country. As policies around the nascent market in India become increasingly restrictive, the firms are looking to set up shop in more conducive climes, with the UAE at the top of their list.
Indian crypto analyst Jitendra Kale reportedly told the Khaleej Times that the “Indian crypto community plans to expand its footprint in the Middle East as Dubai is at [the] forefront of crypto-related activities.” At least three crypto firms were confirmed by the report to be moving operations to Dubai, including trading and exchange platforms like DigitX, CGCX, and PCEX.
With the UAE extending its philosophy of creating policies to boost the ease of doing business in the crypto space, it has quickly grown to become a go-to destination for crypto lovers. Presently, Abu Dhabi and Dubai are leading the push to make the UAE the crypto capital of the world; both cities have wasted little time offering licenses to crypto firms, including Binance, FTX, and Bybit.
Moreover, aside from clear regulations, Dubai also has a zero tax policy on personal income. Kale speaking on Dubai’s appeal said:
“… Dubai has been encouraging the growth of the crypto sector by creating a regulatory environment to attract crypto businesses and talent to the city. Additionally, Dubai has no personal income tax. There is zero tax on any gains, including gains on Cryptocurrency. It also means there is no need for extensive record keeping and filing. Entrepreneurs say it has advantages such as networking opportunities, no restrictions on innovation, access to global opportunities, and resources that outweigh the cost of living in Dubai.”
According to Kale, the relaxed tax rules in Dubai make investment and expansion easier. Notably, Indian crypto firms are not the only ones seeking to move to the Middle East. Singapore-based crypto venture capital firm Three Arrows Capital is also preparing to move to Dubai even as Binance, the world’s leading exchange, is rumored to be setting up its headquarters in the city.
Indian firms express willingness to build again in India if regulations become better
Despite the present state of crypto-related policies in India, the country’s crypto entrepreneurs launching operations in Dubai have expressed a willingness to build their businesses around the Indian market if regulations become less restrictive. DigitX co-founder Ashish Mehta said:
“what cryptoprenuers are trying at this point in time is to make good use of the greener pastures which lie in outside markets today but very soon those exercises will turn out to be capacity development and capacity utilization experiments and the bedrock of this crypto revolution will be laid back in India eventually as the government comes up with much more comprehensive and supportive regulations for our industry.”
Presently, the crypto market in India is faced with an unreasonable capital gains tax policy and KYC requirements. As a result, the market has seen a considerable decline in trading activity.