Indian crypto enterprises are increasingly migrating to Dubai, seeking solace from India’s rigorous tax laws and uncertain digital currency regulations. The United Arab Emirates (UAE) offers a sanctuary with its open regulatory climate, contrasting sharply with the restrictive environment at home.
The Remittance and Trade Connection
This movement is fueled by a significant financial link between India and the UAE. The UAE’s sizeable Indian expatriate community plays a crucial role in India’s impressive global remittance inflow. In 2021, this accounted for 18% of the country’s $110 billion total. Additionally, the bilateral trade between these nations reached a staggering $85 billion last year, with a notable emphasis on blockchain and web3 technologies.
India’s Taxation Drives Crypto Firms Away
The Indian government’s recent imposition of a 30% tax on cryptocurrency trading profits, along with a 1% tax deducted at source on transactions over 10,000 rupees, has significantly dampened the local crypto market. This has led to a decline in crypto activity and prompted firms to look for friendlier jurisdictions.
Dubai: A Blooming Crypto Hub
Dubai, with its low taxes, ease of business setup, and dedicated digital asset framework, has emerged as a preferred destination for these firms. The DMCC, Dubai’s thriving commercial hub, is home to numerous Indian companies, underlining Dubai’s role as a global business nexus.
The Wider Crypto Trend
The shift to Dubai mirrors a broader trend in the crypto world, where the MENA region is becoming a pivotal player. The significant crypto transactions in the MENA region underline its rising importance in the digital currency space.
As Indian crypto companies adapt to regulatory challenges, Dubai’s progressive stance offers them a nurturing environment for growth and innovation in the crypto sector.
