The cryptocurrency industry is booming globally with Saudi Arabia is no exception. Saudi Arabia presents an attractive destination for entrepreneurs with a growing interest in blockchain technology. Combined with digital currencies, and decentralized finance. Best for those looking to open a cryptocurrency company.
The process involves legal steps and regulatory requirements, know them before stepping on. The guide is a perfect solution for cryptocurrency legal in Saudi Arabia. We will walk you through the:
- Procedure for opening a crypto company in Saudi Arabia, including
- How to obtain the necessary licenses
- Ensure compliance with local laws.
Keep reading and explore with us whether is cryptocurrency legal in Saudi Arabia or not.
Registering a Cryptocurrency Business in Saudi Arabia
Register your business before launching a cryptocurrency company in Saudi Arabia. You can do so with the relevant authorities. However, the process is similar to any other business registration in the Kingdom. There are additional steps to follow due to the nature of cryptocurrency services.
Step-by-Step Process for Registering a Crypto Business:
Choose Your Business Structure:
Appropriate legal structure selection for your cryptocurrency business is the first step. Most foreign investors opt for a:
- Joint stock company or
- A limited liability company
Apply for a SAGIA license in case you are a foreign investor.
Register with the Ministry of Commerce:
Now, register with the Ministry of Commerce upon choosing your company type. This involves your company’s articles of association submission, business name, and other legal documents.
Obtain a Saudi Iqama (Residence Permit):
A residence permit is needed if you plan to manage the company locally. It is also known as Iqama. Apply for the visa if you are not a Saudi national. It can be either a work visa or an investment visa. Need help in this regard? Our local experts can guide you through this immigration process.
Open a Corporate Bank Account:
Open a corporate bank account in Saudi Arabia to handle your business transactions. The bank will require various documents, including:
- Your business registration certificate and
- Company charter.
Ensure cryptocurrency is legal in Saudi Arabia by following the procedure. Your business will be legally registered after completing these basic steps. Then, get ready to apply for the cryptocurrency-specific license.
Apply for a Crypto License: Virtual Asset Service Provider License)
Obtain a Virtual Asset Service Provider license. The license is essential to operate legally in Saudi Arabia’s crypto industry. This license is issued by the Saudi Central Bank. Commonly known as SAMA. It regulates digital asset services. These entail:
—> Cryptocurrency trading
—> Wallet services, and
—> Other blockchain-based activities.
Key Services Covered by a VASP License:
Your crypto company can provide the following services in Saudi Arabia with a VASP license,:
Digital Banking:
Offering digital bank accounts, including for crypto-based assets.
Electronic Payment Processing:
Facilitating payments through blockchain technologies or cryptocurrencies.
Peer-to-Peer Lending & Investment:
Enabling users to lend or borrow funds. They do so directly through blockchain platforms.
Wealth & Asset Management:
Managing digital assets and investments.
Crypto & Blockchain Applications:
Developing applications or solutions using blockchain technology.
Buy Now Pay Later (BNPL) Services:
Offering payment solutions allowing customers to purchase goods or services now. Enabling them to pay later by using digital currencies.
Check out our article on is cryptocurrency mining legal in Saudi Arabia. We have discussed this topic and similar ones in detail on our website.
Requirements for Obtaining a Crypto License in Saudi Arabia
Want to obtain a crypto license in Saudi Arabia? Knowing that it requires meeting several requirements. The Saudi Central Bank (SAMA) has set strict guidelines. This way, they ensure the industry operates securely.
The main requirements for obtaining a VASP license in Saudi Arabia involves:
- Legal Entity Requirements:
Your business entity must be a joint stock company or another approved legal form under the Saudi Company Law. Foreign investors must first secure the SAGIA license to operate in Saudi Arabia before applying for the VASP license. - Management Experience:
The management team must have at least three years of experience in the crypto sector. This is essential as SAMA will scrutinize the backgrounds of senior executives. The process makes sure they are qualified to manage a crypto company. - Audited Financial Statements:
Provide audited financial statements for the past three years. Already prepared in compliance with SOCPA standards. These statements will be reviewed. The purpose is to assess your company’s financial stability. - Capital Requirements:
The organization must have a minimum capital of SAR 10 million. It is approximately equal to USD 2.6 million. The capital must be available to cover the operational costs. Fulfilling the costs for at least 12 months after the issuance of the prospectus. - Local Compliance:
The company adheres to Saudi Arabia’s legal and regulatory standards. This contains:
—> Anti-Money Laundering and
—> Know Your Customer regulations.
- Foreign Investors:
Foreign companies can apply for a crypto license before registering a legal entity in Saudi Arabia. However, they must incorporate their entity when the license is issued. The licensing process for foreign companies can take up to a year. It is wise to plan ahead before the time.
Crypto-Related Activities in Saudi Arabia
For general transactions, Saudi Arabia has not fully embraced cryptocurrencies. However, it is becoming supportive of blockchain and cryptocurrency technologies. Further, the Kingdom’s regulatory landscape is evolving. For this, the government is taking steps to regulate crypto-related activities. This way, it ensures their security and legitimacy.
Under the VASP license, some of the key crypto-related activities allowed in Saudi Arabia are:
Blockchain Development:
Saudi Arabia is keen on exploring and utilizing blockchain technologies. Especially for various sectors, including
- Finance
- Supply chain, and
- Healthcare.
Cryptocurrency Trading:
Saudi Arabia has an approach toward the widespread use of cryptocurrencies. Under this, virtual asset trading is allowed following strict regulatory supervision.
Tokenization:
The country is exploring the use of tokenized assets in various industries. This allows for the tokenization of real-world assets such as
- Property
- Artwork, and
- Securities.
The Crypto Landscape in Saudi Arabia
Saudi Arabia’s fintech sector has been growing rapidly. As a result, cryptocurrency and blockchain becoming significant players.
In 2023, Saudi Arabia witnessed 207 fintech startups. These stats are huge as compared to 2018. In the year 2018, only 10 setups have been reported. By the end of 2023, these startups raised a total of USD 1 billion. This highlights the increasing demand for crypto and blockchain solutions.
Basically, the kingdom aimed at diversifying the economy. These initiatives have taken place as per Saudi Arabia’s Vision 2030. Their purpose behind this is to foster innovation. Meanwhile, driving this rapid growth in the fintech and cryptocurrency industries. This way, the country is becoming an attractive hub for crypto businesses.
Final Considerations
Cryptocurrency company in Saudi Arabia isn’t an easy venture to begin. It requires navigating a complex regulatory environment. The good news is the Kingdom’s supportive policies for fintech and blockchain. They offer a strong foundation for businesses that want to operate in this space. Let’s check out a quick summary of the steps involved:
- Register a legal entity in Saudi Arabia. Choose either a Joint Stock Company or a Limited Liability Company
- Apply for the Saudi General Investment Authority license. It is specifically designed for foreign investors.
- Obtain the Virtual Asset Service Provider license from the Saudi Central Bank.
- Meet the capital and compliance requirements set by SAMA.
- Establish your crypto services within the approved regulatory framework.
Build Your Crypto Company in Saudi Arabia with Company Formation Saudia
Looking to successfully establish your crypto business in Saudi Arabia? The best choice is to hire professionals. Take advantage of the Kingdom’s growing digital economy by following the steps discussed in the guide. Still, confused about cryptocurrency legal in Saudi Arabia? Then reach out to experts.
Working with local experts will give you instant step-by-step support. You’ll not feel alone at any point in your business establishment. Contact Company Formation Saudia for more information. The team assist you with how to obtain a crypto license in Saudi Arabia. Set up your crypto company today and thank us later. Our team of specialists can guide you through the process. Meanwhile, help you comply with all legal requirements.