Dubai’s Licensing Model Is Reshaping How CFD Brokers Expand Globally

Dubai has rapidly become one of the most attractive destinations for global CFD brokers. Hardly a week goes by without news that another firm has secured a local licence. On the surface, it looks like a wave of full-scale expansion into the UAE. In reality, most brokers are taking a far more cautious — and cost-efficient — approach.

While Dubais Capital Markets Authority (CMA), formerly known as the Securities & Commodities Authority (SCA), offers two main licensing routes for CFD brokers, the overwhelming majority are opting for the lighter Category 5 licence rather than committing to the far more demanding Category 1 approval.

The Appeal of a Low-Commitment Presence

Category 5 has effectively become the industrys preferred gateway into the UAE market. Brokers such as XM, Exinity, Eightcap, EC Markets, Pepperstone, Taurex, and many others have chosen this route. The reason is straightforward: it allows firms to establish a regulated onshore presence without fundamentally reshaping their global operating model.

Under Category 5, brokers can legally market their services, build local client relationships, and onboard customers in a regulated framework. What they cannot do is execute trades locally or hold client funds in the UAE. Instead, execution and custody remain with another licensed entity elsewhere in the group, typically offshore.

For many international brokers, this structure strikes the right balance. It delivers regulatory credibility in one of the worlds fastest-growing trading regions while avoiding the heavy operational and capital costs of running a full local brokerage.

The High Cost of Going “All In”

The contrast with Category 1 could not be clearer. A full local brokerage licence comes with significantly higher expectations. Minimum capital requirements alone reach at least AED 30 million, compared with around AED 500,000 for Category 5. Beyond capital, Category 1 licensees must establish full operational teams, senior control functions, trading oversight, and robust client money infrastructure within Dubai.

This level of commitment makes sense only for firms that intend to base core execution, risk management, and balance-sheet exposure in the UAE. Unsurprisingly, only a limited number of brokers — including Plus500, XTB, Deriv, and RoboMarkets — have chosen this path.

For most global CFD groups, the economics are hard to justify upfront. Instead, Category 5 allows them to test the market, build brand recognition, and assess long-term potential before deciding whether deeper localisation is warranted.

Speed Matters in a Competitive Market

Another factor driving the popularity of Category 5 is timing. Approval processes tend to be faster, largely because the operating model is narrower and less complex. While regulatory scrutiny remains rigorous, firms face fewer structural hurdles than those applying for full brokerage status.

This matters in a region where growth has been exceptional. Brokers increasingly report that the Middle East — and the UAE in particular — is among their most profitable markets. Capital.com, for example, disclosed that over half of its trading volume in the first half of 2025 came from the Middle East, with UAE-based traders accounting for the majority of that activity. Other regional players have reported similarly explosive growth.

In this context, Category 5 is not a shortcut but a strategic tool: a way to establish a regulated footprint quickly in a highly competitive environment.

Clear Boundaries, Strict Oversight

That said, the Category 5 model comes with firm red lines. Because these entities cannot act as executing brokers, regulators closely monitor how they present themselves to clients. Marketing language, disclosures, and digital advertising are under particular scrutiny to ensure customers do not mistakenly believe they are trading directly with the UAE-licensed entity.

The biggest compliance risk lies in “scope creep,” where promotional activity begins to resemble brokerage services or creates confusion about where trades are executed and funds are held. As regulators sharpen their focus on conduct and online marketing standards, brokers must remain disciplined in how they operate and communicate.

A Strategic First Step, Not a Shortcut

The growing dominance of Category 5 licences highlights a broader shift in how global CFD brokers view Dubai. Rather than treating it as a place where all trading activity must be localised, many now see the UAE as a regional hub for distribution, relationships, and regulated market access.

For most international firms, Category 5 is not an alternative to Category 1 but a logical first step. It enables market entry, regulatory alignment, and commercial growth — while keeping operational complexity under control. Only once a strong and sustainable presence is established does the case for a full local brokerage begin to make sense.

In that light, Dubais licensing framework is doing exactly what it was designed to do: attract global firms, encourage compliance, and allow different business models to coexist — without forcing every broker to go “all in” from day one.

Broker Information and Regulatory Transparency

As brokerage groups expand across jurisdictions and adopt different licensing structures, having access to consolidated public information becomes increasingly useful. WikiFX serves as a global broker information platform that aggregates regulatory disclosures, licence records, operational details, and publicly available user feedback, allowing readers to better understand how different brokers are structured and authorised across markets.