Two years ago, the chief executive of an Asia-based crypto derivatives platform told our team that he was moving his licensing application from Hong Kong to Dubai. “The SFC process would have burned a whole fundraise before we could take a single trade,” he said. His treasury moved to Dubai but his engineering team stayed in Kowloon. That pattern, a licensing entity in one city, the brain trust in another, now defines the way crypto businesses choose hubs. The available data suggest that Dubai has pulled ahead in raw numbers of registered enterprises, but the victory is less straightforward than the headlines claim.
The ChangeNOW strategy unit examined every public regulatory filing, licensing register, banking circular, tax law, and corporate service-provider report we could source through. The picture that comes out is speed versus depth, modularity versus integration, plus this geopolitical undercurrent, honestly, it matters just as much as any tax policy does.
The Numbers Behind the Narrative
The DMCC Crypto Centre has more than 750 registered crypto and blockchain companies by 2025. For comparison, back in 2021 they had under 500. This growth markedly expanded the UAE’s visible crypto business presence. At the same time, Abu Dhabi Global Market and Dubai International Financial Centre kept pulling in virtual-asset service providers and other digital-asset firms; these companies operate under each zone’s own regulatory setup.
By contrast, Hong Kong’s Securities and Futures Commission (SFC) maintained a licensing regime focused specifically on virtual asset trading platforms (VATPs). As of the SFC list last updated on 29 May 2026, Hong Kong had 13 fully licensed VATPs, while six VATP applications remained pending. The SFC’s public list also makes clear that applicants operating under the deemed-to-be-licensed arrangement are not formally licensed by the SFC and remain subject to final regulatory approval.
These figures are not directly comparable. A DMCC registration reflects the establishment of a company within a free-zone business ecosystem and does not constitute authorisation to provide regulated financial services. An SFC VATP licence, by contrast, is a regulatory approval allowing a platform operator to conduct specified virtual-asset trading activities subject to ongoing supervision. The difference therefore reflects not only market demand, but also fundamentally different regulatory categories.
The real difference between the two places isn’t so much about how many companies they have, it’s more about how they regulate them. The UAE established a system that mixes free-zone setup with rules specifically for virtual assets. Hong Kong, on the other hand, went with a licensing model focused on investor protection, governance, custody rules, and ongoing oversight.
So if you just compare the number of registered companies in Dubai with licensed VATP firms in Hong Kong, you might end up thinking there’s been a lot more direct moving between the two than there actually has been. Instead, the figures illustrate two different approaches to building a digital-asset infrastructure.
Regulation: Speed Versus Precision
VARA came into being back in March 2022, and they compiled a pretty detailed rulebook, the kind that walks you through exactly what a business has to do, step by step, and tells you which documents you need at each stage. Founders told us that the predictability of the steps was as important as the speed.
Hong Kong’s SFC employs a principles-based approach. It requires a VATP applicant to demonstrate that it has designed systems to meet the regulator’s expectations for investor protection, anti-money laundering, and custody, but it does not hand the applicant a checklist. This approach yields strong institutional protections but it also creates uncertainty.
One venture investor active in both markets told us , “In Dubai, I know what I need to do. In Hong Kong, I know the standard is high, but I don’t know exactly what the SFC wants until I’m deep into the process.”
Neither model is obviously superior. Dubai’s prescriptive clarity draws startup founders who need to move fast. Hong Kong’s principles-based supervision attracts asset managers who need a regulatory imprimatur that pension funds and sovereign wealth funds recognise. The two models serve different segments of the market.
Banking Access as a Competitive Advantage
Back in Dec 2024, Reuters reported that UAE banks, including big local players like Emirates NBD and Mashreq, had started taking on certain crypto firms that were either licensed by VARA or had in-principle approval. The process was still very much case-by-case and heavily driven by AML concerns. Still, people in the industry pointed out that if an approved entity had solid compliance and actual operational presence, they stood a better chance of getting an account opened in a reasonable amount of time
Rather than a formal rule, banks typically required enhanced due diligence, including proof of regulatory status, source-of-funds documentation, and in some cases significant liquidity buffers or blocked deposits. However, there is no confirmed regulatory requirement mandating a fixed “six-month operating expense cash cover”; this appears to be a market practice rather than a standardized rule.
Despite increasing institutional openness, smaller seed-stage crypto firms continue to face frequent account rejections due to perceived AML and reputational risk exposure. So what you end up with is a kind of unofficial split in who actually gets bank access. Licensed firms that are already bringing in revenue tend to get moved straight to the front of the queue. But early-stage startups even after they’ve incorporated in the UAE, they still often hit a wall when trying to open a business account
In Hong Kong, the HKMA has consistently pushed banks to take a risk-based approach with virtual asset clients, basically, no blanket bans or outright exclusions. That’s been in line with FATF-style guidance that came out between 2022 and 2024, which stresses proportionality and enhanced due diligence rather than just saying no to everything.
By late 2024, a number of licensed VATPs, OSL and HashKey among them, had managed to get banking relationships going with big names like HSBC, Standard Chartered, and Bank of China (Hong Kong). It was a sign that things were gradually becoming more normal under the SFC’s licensing setup.
However, market access in Hong Kong is structurally constrained by the licensing threshold itself. The SFC regime remains one of the most stringent globally, requiring extensive governance, custody, and compliance infrastructure before a firm is permitted to operate or even approach retail banking rails. As a result, only a small number of firms progress to the stage where banking integration becomes relevant.
Once licensed, however, Hong Kong platforms benefit from deep integration into the city’s financial infrastructure. Licensed VATPs can connect to the Faster Payment System (FPS) for HKD settlement, while fiat rails for USD and other currencies operate through Hong Kong’s established correspondent banking network, enabling near-instant retail deposits and withdrawals in local currency.
The practical implication is not a simple capital-versus-regulation dichotomy, but a sequencing difference in market access.
In Dubai, banking access is typically gated by a combination of regulatory status, operational substance, and banking risk appetite. Well-capitalized firms that demonstrate compliance readiness may obtain banking relationships earlier in their lifecycle, even during or shortly after licensing stages.
In Hong Kong, by contrast, access to banking infrastructure is effectively contingent on successful completion of the SFC licensing process. While this creates a higher initial barrier to entry, it results in deeper integration into a mature financial system once authorization is achieved.
A well-funded startup may therefore secure banking services earlier in the UAE than it would obtain a full VATP licence in Hong Kong. Conversely, a Hong Kong-licensed platform operates within a more deeply embedded institutional payments ecosystem, reflecting the jurisdiction’s longstanding role as a global financial hub.
Conclusion
This is where the Dubai-versus-Hong Kong comparison gets more interesting than the usual headline numbers suggest. Dubai might offer faster setup, clearer staging, and earlier access to banking, but only for firms that can actually prove they have substance and are compliance-ready. Hong Kong, meanwhile, remains harder to enter but more deeply connected to institutional financial infrastructure once a company clears the licensing bar.
For crypto operators, the real question is therefore not simply where it is easier to incorporate. It’s the place where licensing, banking, payments, talent, tax exposure, and commercial credibility can all be pulled together into a structure that actually works.
In many cases, the answer might not be a single hub at all. A company could license one entity in Dubai, keep its engineering or product teams in Hong Kong, route institutional relationships through a more established financial center, and handle founder residency or treasury management somewhere else entirely. This is not regulatory arbitrage in the old sense. It is the reality of building a crypto business across jurisdictions that each solve a different part of the operating stack.
That is why the Dubai-versus-Hong Kong question should not end with incorporation. The more useful question is how the two jurisdictions can fit into the same corporate architecture. In the next column, I will look at the tax and residency side of that decision, and explain why the optimal setup for founders may depend less on choosing one city over the other than on knowing which function belongs where.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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