Tokenization sits at the junction of securities law, fund regulation, virtual-asset rules and tax. We advise on all four, in the jurisdictions where our clients issue and where their investors sit.
A summary of where tokenized instruments can be issued in our home markets. The right route depends on the instrument, the investor type and where marketing takes place. This is general information; the feasibility memo gives the advice.
| Jurisdiction | Regulator and framework | Relevant for | What to expect |
|---|---|---|---|
| DIFC, Dubai | DFSA; security tokens regulated as investments, with a specific regime for tokenized securities and crypto tokens | Fund units, real estate SPVs, debt instruments offered to professional clients | Established rulebook for security tokens; licensing for the intermediary or a recognized arrangement; strong custody expectations |
| ADGM, Abu Dhabi | FSRA; digital securities and virtual assets frameworks | Digital securities issuance and trading venues | Comparable to DIFC with its own venue and custody rules; active in commodities and carbon |
| Dubai (onshore) | VARA for virtual assets; SCA for securities | Tokens that are virtual assets rather than securities; retail-facing platforms | Boundary between VARA and SCA scope must be settled early; marketing rules apply |
| GIFT IFSC, India | IFSCA; fund management, capital markets and fintech frameworks with a sandbox for tokenization | Funds and instruments for non-resident and foreign-currency investors; India to GCC corridor structures | Regulator open to tokenization pilots; useful for offshore-style structures within India |
| India (domestic) | SEBI for securities; RBI for payments and FEMA; IBBI for valuation; tax at 30% plus TDS on virtual digital assets | Domestic investors, listed and unlisted securities, receivables, InvITs and REITs | Tokenized securities sit largely within existing depository frameworks; virtual digital asset tax treatment is a material factor |
| Carbon (India) | Bureau of Energy Efficiency and CERC under the Carbon Credit Trading Scheme | Obligated entities and offset project developers | Registry and trading rules being notified in phases; we track each notification |
For assets held in India and sold to international investors, the issuer SPV usually sits outside India. Our default recommendation and the alternatives:
| Option | When we recommend it | What it gives you | Watch |
|---|---|---|---|
| ADGM (default) | First tranche, international investors, orphan SPV required | Digital securities framework, licensed trustee holding the SPV on trust so no sponsor ownership, India-UAE treaty on distributions, QFZP tax position where the activity qualifies | Orphan structure must be genuine; substance and control tested for consolidation |
| GIFT IFSC | Second tranche, or where an Indian-regulated issuer is preferred | Foreign-currency issuance inside India, IFSCA sandbox, no treaty dependency | Tokenization licensing category still being finalized by IFSCA; we track it and time the tranche accordingly |
| DIFC | Fund structures and professional-client offers where DFSA recognition matters to the investor base | Established security token rulebook and fund regime | Cost and timeline higher than ADGM for a single-asset SPV |
| Luxembourg | European investor base or listing | Securitization vehicle regime, DLT-native issuance recognized | Fallback only; cost and distance from the asset |
Rupee revenue and foreign-currency revenue take different routes. Domestic revenue services an external commercial borrowing from the SPV to the operating company, filed through the AD bank with security registered in India. International revenue is contracted directly by the SPV as an export of services, with the operating company paid for capacity at arm's length. The AD bank's turnaround on the borrowing filing is the one step nobody can compress, so it starts first.
Distributions from India to a UAE SPV carry treaty withholding at 12.5% on interest, with the 5% financial-institution rate worth testing where the SPV qualifies. Lower-rate jurisdictions exist on paper and are difficult to defend in practice; we model the realistic rate, not the headline one. Currency is the structure's weak point: rupee revenue servicing a dollar instrument needs a hedge or a buffer, and the offer document says so.
Is the token a security, a unit in a collective investment scheme, a virtual asset, a commodity receipt or something else? The answer decides everything after it.
SPV, fund, trust or company; where it is formed; who directs it; how it holds the asset; how it is taxed.
Own authorization, a licensed intermediary, a sandbox, or an exemption. Timeline, cost and conditions for each.
Prospectus, private placement memorandum or information memorandum, with the token-specific disclosures regulators now expect: custody, key loss, smart contract risk, forced transfer powers.
Who can be approached, where, and how. Encoded in the whitelist rules so the platform cannot breach the marketing restrictions.
UAE corporate tax and VAT, qualifying free zone status, India's virtual digital asset regime, withholding on cross-border distributions, and treaty positions between India and the UAE.
Reporting calendar, AML program, valuation frequency, audit and regulatory returns, documented in a compliance manual the platform enforces.
Custody arrangement, segregation, insurance and the regulator's client asset rules. Often the hardest part of a license application.
For sukuk and Islamic fund structures, coordination with a Shariah board and structuring of profit distributions in place of interest.
Software vendors sell platforms and refer the legal work out. Law firms advise and refer the build out. Neither is accountable for whether the finished thing works as a financial product.
Kubermint is run by chartered accountants, valuers and lawyers who also write the software. The person who signs the valuation, the person who drafts the structure paper and the person who configures the token contract are on the same team. When something does not fit, we find out in week two, well before the licensing interview.
The feasibility memo covers classification, jurisdiction, licensing pathway, tax and timeline for your specific asset and investors.