Step-by-Step Guide to Obtaining a Remittance License in the UAE

Money transmitters in the United Arab Emirates (UAE) must hold a remittance license to transfer money between parties that are located in two different parts of the world across borders. The UAE’s money transfer license is necessary not just to have the legal authority to provide remittance services, but also to instill trust among their clients, as well as government bodies, that their platform isn’t involved in illegal activities.

If you are also planning to start a remittance business in the UAE, then apart from other necessities like money transfer software, partnering with banks, and investing in marketing, the absolute imperative is to have a money transfer license. No matter what your business model is, this article will guide you on the right path to secure a remittance license in the UAE.

Basic Regulatory Framework For Remittance License In The UAE

Firstly, start with understanding what you are getting into and the intricacies of the regulatory framework. Businesses in the UAE would be governed by a particular regulatory body based on their location and business structure. As a result, licensing also varies accordingly. Check out the different types of licensing, each governed by different authorities with unique regulatory requirements:
Mainland Licensing By the Central Bank of the UAE (CBUAE)

If your business operates in the UAE mainland, the license application for your remittance business would be reviewed by the Central Bank of the UAE (CBUAE). Further, the CBUAE issues remittance licenses under the three basic categories. Check out these categories, explained as follows, based on the services they are permitted to provide.

• Category A: Only foreign currency exchange is allowed.
• Category B: Both foreign currency exchange and remittance services are permitted.
• Category C: Not just remittance services and currency exchange, but wage payment services are also permitted.

However, under Category C, the license-holding company is permitted to provide wage payment services only as per the Wages Protection System (WPS).

It is quite evident that moving from A to the C category, more services are permitted, but it also means the businesses operate on a much higher level with a larger paid-up capital. Further, they are strongly governed and hold the most advanced compliance systems.

Free Zone Licensing By ADGM And DIFC

If your businesses have outside-UAE ownership, you have the option to set up in one of the UAE’s financial free zones. However, licensing is subject to not one but two distinct authorities, as per the jurisdiction you choose.

Abu Dhabi Global Market (ADGM)

ADGM is regulated by the Financial Services Regulatory Authority (FSRA). The application process for licensing is quite simple. In addition, ADGM generally requires lower capital thresholds compared to mainland licensing and offers access to regulatory sandboxes.

Dubai International Financial Centre (DIFC)

DIFC is regulated by the Dubai Financial Services Authority (DFSA). Even if your remittance business operates under the traditional remittance model or the digital one with a strong fintech ecosystem, it provides licensing for both.

Both the FSRA and the DFSA encourage remittance companies to have full foreign ownership. However, the company operating under these authorities must collaborate with the mainland-licensed entity if it wants to serve the UAE mainland.

Digital-Only Remittance License By CBUAE

Now, CBUAE also provides a digital-only remittance license from July 2025. It is for businesses with no physical location and offers remittance services remotely with just a robust online remittance platform. Moreover, 100% foreign ownership is applicable as well for this digital-only remittance license.

However, the remittance platform needs to have integrated e-KYC, automated AML/CFT monitoring, and even employ the most advanced cybersecurity frameworks to provide secure remittance services.

Process To Get A Remittance License In the UAE

If you have clarity over the regulating bodies and who to approach for your remittance licensing to provide cross-border remittance services, follow the step-by-step process to get the license:

Evaluate Your Business Model and Needs

Come up with a strong business model. Does it need to be a traditional one with a physical business with multiple employees, an online platform that operates remotely, or a mixture of both?

Sort Business Ownership, Capital, and Flexibility

• If you wish to operate in the mainland UAE, you would have to consider CBUAE, whose capital requirements are based on the spectrum of the services.
• In case your remittance business has 100% foreign ownership, you would need to have a much lower capital threshold, and it would operate under ADGM/DIFC.
• If your remittance enterprise is fully online, you would need robust remittance software and have a high capital requirement (AED 25M) to get the Digital-Only License.

Prepare Your Documentation

For filling out your application, you should gather the following documents:

• Formal application cover letter
• Proof of capital and financial statements
• Complete remittance business layout and cash flow projections
• All the shareholder and management profiles in the business
• Frameworks for governance, risk management, and compliance
• Policies regarding IT and cybersecurity (particularly for digital applicants)

Submit Application

• Mainland (CBUAE): Apply on the official CBUAE licensing portal and wait for evaluation. Make sure to respond to the follow-up request to finalize the licensing on time.
• Free Zones (ADGM/DIFC): Submit via DFSA or ADGM via their respective portal.
• Digital-Only License (CBUAE): Apply by fulfilling requirements related to paid-up capital proof, compliance architecture, remittance software, and other areas.

Decision & Post-Approval Compliance

• Mainland: The license application is normally processed by CBUAE in about two months. Plus, you have 20 days to appeal the decision if it is denied.
• Free Zones: It could take a few weeks or even some months to acquire Free Zone Licensing. The time period actually varies as per feedback rounds. Besides, once the necessary conditions are met, only then can in-principle approval be converted into a complete license.
• Digital-Only: Even after the approval, CBUAE can check if the money transfer platform is following all the mandatory safety protocols to provide secure remittance services.

Important Compliance Considerations

Keep the following conditions in consideration when obtaining a remittance license in the UAE:

• Keep all the documents prepared in advance to avoid any delays and rejections.
• Your enterprise should hold sufficient funds to support the chosen business model.
• Remittance software should be secured with AML/KYC protocols, internal audits, and cybersecurity frameworks to provide digital remittance services.
• Engage with regulating authorities to quicken the approval process and, if demanded, provide the additional documents and address issues early.

Important Compliance Considerations

Keep the following conditions in consideration when obtaining a remittance license in the UAE:

• Keep all the documents prepared in advance to avoid any delays and rejections.
• Your enterprise should hold sufficient funds to support the chosen business model.
• Remittance software should be secured with AML/KYC protocols, internal audits, and cybersecurity frameworks to provide digital remittance services.
• Engage with regulating authorities to quicken the approval process and, if demanded, provide the additional documents and address issues early.

Wrapping Up

If a remittance business has a solid framework and operates legally, it typically won’t face significant issues with the remittance license in the UAE. The process is relatively straightforward, with various authorities available to support diverse business models, ensuring quick approvals and better support. If you encounter any challenges with licensing or related concerns, Tech Remit is here to help! We not only provide a technical framework to provide remittance software services but also assist money transmitters throughout the licensing process. Contact us today for professional assistance!

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