The authorities of Dubai have announced that a cryptographic valley in the national Tax-Free Zone (no personal and legal income tax) will be launched. Thanks to the help of Swiss crypto-valley partners, Dubai will be offering different services, including startup incubators, blockchain trainings and coworking facilities.
Cryptographic valley in the Dubai's "free zone"
On Thursday, a Dubai government entity, DMCC (Dubai Multi Commodities Center), made an announcement at Davos 2020 in which it informed about launching a cryptographic valley in its so-called "free zone" in the heart of one of the business districts. The DMCC explained that the valley was created in order to support growth, cooperation and integrity in the global blockchain industry.
"The ‘DMCC Crypto Valley’ will offer a variety of services including incubation for early-stage startups, co-working facilities, innovation services for corporate clients, blockchain and entrepreneurship training, education, events, mentoring and funding."
Free zones are special economic zones which offer simplified procedures and financial benefits (no income tax, for instance) for companies representing specific sectors. Every zone, though, has its own administration, different registration conditions and operating rules. In the United Arab Emirates (UAE) there are at least several dozen of zones of this type, of which more than 30 is located in Dubai. The zones have proved to be an essential part of the UAE's success in encouraging regional and international companies to locate their businesses on the territory of the country.
The DMCC was founded in 2002 and its main goal is to provide a physical, market and financial infrastructure which is necessary to create a global trade center in goods. Its free zone offers its members a number of benefits, including 0% income tax from natural and legal persons. The members of the zone may also, without any restrictions, transfer all their profits back to their home countries.
The DMCC, which is located in the center of Dubai, is home to as many as 100,000 people and 17 thousand member companies (both startups and international corporations). It is worth noting that in 2019, the DMCC received, for the fifth time in a row, a "Global Free Zone of the Year" award from Global Times Fdi magazine. The competition included 85 free zones from around the world.
"The launch of the crypto valley in DMCC will enhance the city’s dynamic business environment, and support the wider strategy of the UAE government to attract the innovators, entrepreneurs and pioneers that will shape the future economy".
- says the CEO of DMCC, Ahmed Bin Bulayem.
Partners from the Swiss crypto-valley
In order to launch the cryptographic valley, DMCC partnered with the Swiss investment company, Crypto Valley Venture Capital (CV VC), and its subsidiary CV Labs. The cooperation was established as an answer to the need of developing a comprehensive DMCC Blockchain Strategy, a strategy which is in line with the Emirates Blockchain Strategy 2021. This, in turn, supports the Dubai Blockchain Strategy, initiated by Hamdan ibn Muhammad ibn Rashid Al Maktum (called Fazza), the Prince of Dubai and the Chairman of the Dubai Executive Council. The agreement between the companies was signed during the World Economic Forum in Davos.
"We are thrilled to move into the MENA [Middle East and North Africa] region with DMCC as a strong local partner."
- said Ralf Glabischnig, the founder of CV VC and CV Labs.