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Dubai’s Virtual Assets Regulatory Authority (VARA) has emerged as a pioneering regulator for cryptocurrency and virtual asset businesses. Securing a VARA licence is not only a legal requirement for operating a crypto business in Dubai, but it also lends credibility, access to banking, and integration into Dubai’s dynamic financial ecosystem.
This in-depth guide will walk you through everything you need to know about obtaining a VARA licence – from understanding VARA’s regulatory framework and compliance costs, to banking recommendations and choosing the right legal consultants.
We’ve compiled the latest information (as of 2025) and detailed insights to ensure this guide surpasses existing resources in accuracy and depth.
Understanding VARA and the legal framework in Dubai
Licensing is not optional; it’s a legal obligation with real teeth.
Dubai established the Virtual Assets Regulatory Authority (VARA) in early 2022 under Law No. 4 of 2022 as the specialist regulator for virtual asset activities in the Emirate. VARA’s jurisdiction covers all of Dubai (mainland and free zones), excluding the DIFC. In February 2023, VARA released a comprehensive set of Virtual Asset Regulations and Rulebooks that form the backbone of Dubai’s crypto regulatory framework. These rules lay out licensing requirements, prudential standards, and operational guidelines for Virtual Asset Service Providers (VASPs).
VARA’s objectives include promoting Dubai as a safe and innovative hub for virtual assets, protecting investors, and curbing illicit practice. The authority aims to foster a robust digital economy by providing clear “guardrails” for the industry. In practice, this means businesses dealing in crypto must meet strict compliance standards for consumer protection (e.g. anti-money laundering measures, cybersecurity, and operational resilience).
Who needs a VARA Licence: Virtually any individual or entity conducting virtual asset activities in or from Dubai is legally required to obtain a VARA licence before commencing operations.
This includes running a crypto exchange, providing custody or wallet services, operating a crypto broker or fund, issuing tokens, or even large proprietary crypto trading. In other words, if your business involves cryptocurrencies or other digital assets in Dubai – whether as your core service or as part of a broader offering – you must be licensed by VARA. Operating without the proper licence can lead to severe penalties under the law. Dubai’s regulations empower VARA to impose fines (ranging up to hundreds of thousands of dirhams per violation), suspend or revoke business licences, and even pursue legal action against unlicensed activities.
Dubai’s approach is unique – VARA is the world’s first dedicated regulator for virtual assets, separate from the central bank or securities authority. This specialised focus underscores Dubai’s commitment to becoming a global crypto hub under a clear, stand-alone regulatory regime.
Why obtain a VARA licence?
Benefits and legal necessity
Obtaining a VARA licence is crucial for two main reasons: legal compliance and business credibility/opportunity.
Legal compliance
As noted, any crypto-related business in Dubai must have a VARA licence by law. Operating without one risks heavy fines or shutdown. A VARA licence provides legal authorisation to operate within Dubai’s jurisdiction, ensuring your business is on the right side of the law from day one. It also means aligning with UAE’s broader AML (Anti-Money Laundering) and CFT (Countering Financing of Terrorism) laws, since VARA works in tandem with federal regulators to enforce strict compliance.
Credibility and trust
Being licensed by VARA signals to customers, investors, and partners that your business meets Dubai’s stringent regulatory standards. It legitimises your crypto business in the eyes of the public and other institutions. Clients and counterparties gain confidence knowing you are subject to regulatory oversight and best practices. This is especially important in the crypto industry, which has seen its share of bad actors – a VARA licence shows you’ve passed thorough scrutiny on governance, security, and compliance.
Access to opportunities
Dubai is positioning itself as a global crypto and fintech hub. A VARA licence opens doors to participate in this growing ecosystem. Licensed firms can legally offer services in Dubai’s thriving market, engage in partnerships, and even explore government or enterprise projects that would be off-limits without proper authorisation. Additionally, many of Dubai’s banks and financial services providers are more willing to work with VARA-licensed entities (since those entities are regulated). For example, after VARA’s establishment, local banks have started launching digital asset services in compliance with VARA – notably Zand, the UAE’s first digital bank, received VARA approval to offer crypto custody to clients. This trend indicates that having a VARA licence can make banking far smoother for a crypto business than if it were unlicensed. (We’ll discuss banking in detail later.)
Avoiding penalties
Aside from positive benefits, one cannot overstate the risk of non-compliance. Dubai authorities have made it clear that enforcement will be strict. Penalties for operating without a licence or violating regulations include fines that can reach AED 200,000 per offence (or more for repeated breaches), suspension of activities, and even permanent revocation of your business licence. In some cases, unlicensed crypto operations could also trigger criminal liability under UAE law. In short, obtaining the VARA licence is essential to avoid legal trouble and ensure business continuity.
Global recognition
Aside from positive benefits, one cannot overstate the risk of non-compliance. Dubai authorities have made it clear that enforcement will be strict. Penalties for operating without a licence or violating regulations include fines that can reach AED 200,000 per offence (or more for repeated breaches), suspension of activities, and even permanent revocation of your business licence. In some cases, unlicensed crypto operations could also trigger criminal liability under UAE law. In short, obtaining the VARA licence is essential to avoid legal trouble and ensure business continuity.
VARA licence is both a shield and a passport
A shield from legal risks and a passport to business opportunities in Dubai’s fast-growing virtual asset sector.
Types of VARA licences and activities covered
VARA offers a range of licence categories tailored to different kinds of virtual asset services.
It’s crucial to determine which category (or categories) your business falls under, as this will dictate your specific requirements and costs. According to VARA’s framework, the main Virtual Asset Service Provider (VASP) licence types include:
Providing advice and consulting on virtual asset investments or strategies (e.g. a crypto financial advisor or research firm)
Facilitating the buying and selling of virtual assets, including operating as an agent or broker for clients to trade crypto. (This can cover exchanges that match trades, OTC brokers, and platforms that deal in virtual assets on behalf of others.)
Safeguarding clients’ virtual assets by providing secure custody or wallet services. Essentially, if you hold or store crypto assets for others (with responsibility for protecting private keys), you need this licence.
Operating a virtual asset exchange platform that allows trading of cryptocurrencies or other digital tokens between users. This is for businesses running order-book exchanges or similar trading venues where buyers and sellers interact.
Facilitating the lending or borrowing of virtual assets. For instance, crypto lending platforms where users can lend their tokens for interest or take crypto loans would fall in this category.
Managing virtual asset portfolios or investment funds, and investing in virtual assets on behalf of clients. If you operate a crypto fund, asset management company, or discretionary trading on behalf of investors, this is your category.
Separate approval, not a VASP service per se. If you intend to issue a new virtual asset (e.g. launch a token or coin via ICO/ITO), VARA has an Issuance regulatory process. Issuers must get VARA’s approval and comply with specific whitepaper disclosures and capital requirements for token issuance. (Issuance is beyond the scope of general VASP licences but worth noting if your business involves creating new tokens.)
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Key point
The category of licence you choose affects your capital requirements and fees (more on that shortly) as well as the scope of business you’re allowed to conduct. It’s wise to only apply for the activities you truly need, as each additional activity will increase your compliance burden and cost. The VARA rulebook explicitly states that VASPs must hold the prescribed capital for each service they offer, and pay fees per activity. This means a larger company offering multiple services will face significantly higher requirements than a small firm focusing on one niche.
Before applying, carefully map out your planned services and ensure they align with one or more of the above categories. If in doubt, consult with a legal advisor to classify your business correctly – applying under the wrong category could delay your approval or require re-submission.
Compliance requirements and policy framework costs
One of the most challenging aspects of obtaining a VARA licence is meeting the compliance and policy framework requirements
VARA expects applicants to have robust systems in place to prevent money laundering, secure customer assets, manage risks, and ensure proper governance. In practice, this means comprehensive documentation and controls need to be readied as part of your application.
What compliance framework is required?
Every VASP applicant must develop a suite of internal policies and procedures, including but not limited to
AML/CFT policy
Detailed Anti-Money Laundering and Countering Financing of Terrorism policies, aligned with UAE federal laws and VARA’s rulebooks. This covers customer due diligence (KYC processes), transaction monitoring, suspicious activity reporting, sanctions screening, etc.
Know your customer (KYC) procedures
How you will onboard clients, verify identity, and assess risk of clients. VARA will want to see stringent KYC measures especially given the pseudonymous nature of crypto transactions.
Risk management framework
An enterprise risk management framework outlining how you identify, assess, and mitigate risks – including market risk, operational risk, cybersecurity risk, and crypto-specific risks like private key management.
Compliance manual and monitoring program
An internal compliance manual that lays out roles and responsibilities (e.g. the appointment of a Compliance Officer and Money Laundering Reporting Officer). It should also describe ongoing compliance monitoring – how you will ensure continuous adherence to regulations, conduct audits, and train staff.
Security and IT policies
Since virtual assets are digital, VARA places heavy emphasis on cybersecurity. You’ll need clear policies on information security, incident response, wallet security (for custodians), and possibly penetration testing routines. For custodial services, expect to demonstrate top-tier security practices (e.g. use of Hardware Security Modules, multi-signature wallets, etc.).
Business plan and governance documents
VARA will review your business model for viability and compliance. A thorough business plan with financial projections is required, alongside corporate governance documents (organizational structure, ownership details, fit-and-proper assessments of directors and senior management).
Internal controls and audits
Plans for independent audit of your operations (both financial audit and compliance audit) and how you’ll address any issues found.
Developing all these documents to VARA’s standards is a substantial undertaking.
Many companies engage specialised legal and compliance consultants to help craft these policies, given that VARA’s rulebooks are detailed about what must be covered. For instance, VARA’s Compliance & Risk Management Rulebook provides guidance on enterprise risk frameworks and AML programs that VASPs must implement.
Estimated compliance framework costs
Preparing the required compliance framework isn’t just time-consuming – it is expensive. Firms need to budget for consultancy, systems, and talent to meet VARA’s criteria. Based on current industry estimates in Dubai, the cost of developing and implementing the full suite of compliance and policy frameworks typically ranges from AED 500,000 to AED 600,000 for a smaller setup. This range can cover engaging a legal consultancy to produce custom-tailored policies, purchasing or subscribing to compliance software (for transaction monitoring, blockchain analytics, etc.), and hiring key personnel (such as an experienced Compliance Officer).
Contact Aston VIP for more information.
For larger operations, or those aiming to be an exchange or custodian (which face higher scrutiny), compliance setup costs can be even higher – easily exceeding these figures. Consider that you may need to integrate Travel Rule solutions (for cross-border crypto transfers), enhanced cybersecurity infrastructure, and perhaps obtain ISO certifications or third-party audits to satisfy VARA’s expectations. All of these add to the cost.
It’s important to note that these compliance costs are front-loaded – you’ll incur much of them during the preparation and application phase. However, maintaining compliance is an ongoing expense as well (annual audits, software maintenance, staff salaries, etc. which we’ll touch on under ongoing obligations).
Despite the high cost, investing in a strong compliance framework is non-negotiable. VARA will closely review your submitted policies and may reject or delay your application if they find gaps. Many applicants engage Dubai-based companies like Aston VIP who have experience with VARA to ensure all documentation is up to mark. This is often money well spent, as advisors who have navigated the VARA process can preempt common regulatory feedback and tailor your framework to local expectations.
In summary, budget at least AED 500- 600.000 AED (for small single-service firms) purely for the compliance setup and policy framework. Ensure this budget covers both documentation and the implementation of required systems. This is a core part of the licensing journey in Dubai’s regulatory environment.
Tip
Start working on your compliance documents early. It can take months to produce a full set of manuals and policies. VARA will ask for these as part of the application pack (especially in Stage 2 of the process). Having them ready or in advanced draft form by the time you get initial approval will speed up your licensing. Some firms opt for a gap analysis – hiring a consultant to review existing policies (if any) against VARA’s rulebook and then bridging the gaps.
Comprehensive cost breakdown
By company size and licence type
Obtaining a VARA licence involves several cost components. These costs will vary depending on the size of your company, the licence category, and the number of regulated activities you pursue. Below, we break down the major cost elements and how they scale:
1. VARA licensing fees
VARA imposes certain fees for the licence itself, which are standard for all applicants:
This is a one-time fee paid when you submit your licence application. The fee is per activity you apply for. According to the VARA schedule of fees, the application fee is AED 40,000 for activities classified as smaller scope (Advisory, and VA Transfer/Settlement) and AED 100,000 for most other activities (Broker-Dealer, Custody, Exchange, Lending, Management). If you apply for multiple activities at once, you pay the full fee for one activity and a reduced extension fee for each additional activity (50% of the lower application fee). For example, if you apply for both an Exchange and Advisory licence together, you’d pay AED 100,000 (Exchange) + AED 20,000 (which is 50% of the 40k for Advisory as an additional activity).
Annual supervision fee
Think of this as the annual “license fee” to keep the licence active. It is also charged per activity. Currently, VARA’s annual supervision fees are AED 80,000 for Advisory or Transfer & Settlement services, and AED 200,000 for each of the other activities. This fee is due upon receiving the licence (covering your first year) and then annually for renewals. So a company licensed as an exchange and broker would pay AED 200k + AED 200k = AED 400k per year in supervision fees to VARA, whereas a pure advisory firm would pay AED 80k per year.
At Stage 1 of the application (Approval to Incorporate), VARA typically requires 50% of the licence application fee to be paid. This amount (e.g. AED 50k if your full fee is 100k) is often collected by the relevant Department of Economy & Tourism or free zone when you submit initial documents. The remainder is paid at Stage 2 upon final licence approval. Essentially, you pay the application fee in two halves across the process.
Capital deposit/guarantee
While not a fee paid to VARA, it’s worth noting that VARA requires demonstrating capital (see next section) which must be held in specific ways. This might involve depositing money in a UAE bank trust account with VARA as beneficiary or providing a bank guarantee for the amount. There could be bank charges for setting up such accounts or guarantees. Some free zones might also ask for a capital deposit certificate. Be prepared for minor costs associated with locking up capital (opportunity cost of funds and any bank service fees).
Summary of VARA fees (per activity)
These fees are fixed by regulation, so they won’t change based on company size – they depend purely on the licence type.
AED 40k application
AED 80k annual
AED 100k application
AED 200k annual
2. Paid-Up capital requirements
VARA mandates each licensed VASP to maintain a minimum paid-up capital. This is essentially an amount of money (or assets) that must be unencumbered and reserved to support the business’s operations and liabilities. The required capital acts as a financial buffer, ensuring the company is solvent and can cover risks. Importantly, the required capital varies by licence category and, in some cases, by the scale of operations (overheads).
AED 100,000 (fixed)
Advisory is low-risk, so a relatively low capital requirement.
AED 400,000 if you use a VARA-licensed custodian for client asset custody
AED 600,000 if you custody client assets yourself
or 15%–25% of your fixed annual overheads (15% with external custodian, 25% without)
Essentially, smaller brokerages might use the fixed minimum, but a large brokerage with high expenses might have to hold more (quarter of their overhead).
AED 600,000
or 25% of annual overheads
Custodians must hold at least 600k, possibly more if their operating expenses warrant it.
AED 800,000 if using an external VARA-licensed custodian for assets
AED 1,500,000 if the exchange is self-custody
or 15%–25% of overheads (15% with external custody, 25% without)
This reflects the higher risk and scale of running an exchange – if you’re handling customer funds directly, VARA expects a hefty capital buffer of at least AED 1.5 million.
AED 500,000
or 25% of overheads
AED 500,000
or 25% of overheads
This category is considered similar in risk to lending/borrowing in terms of capital.
AED 280,000 if using an external custodian
AED 500,000 if self-custody of assets
or 15%–25% of overheads (15% with external custody, 25% otherwise)
These capital amounts are not fees; they remain with the company but usually must be kept as a cash reserve (for example, in a UAE bank account where VARA has a lien or beneficiary status). VARA may ask for proof of deposit of this capital as a condition for licence issuance.
If you are a small startup with minimal overhead expenses, the fixed AED amounts will likely be the binding requirement. For instance, a small crypto advisory firm might have monthly overheads of, say, AED 50k (annual 600k); 25% of that is 150k, which is above the fixed 100k – in that case, they’d actually need 150k as capital (because the rule is the higher of the fixed amount or percentage). But if their overheads are lower, they stick to 100k. A larger company with offices, many staff, etc., will likely hit the overhead percentage threshold, meaning they must inject more capital as they grow.
Also note that if your company undertakes multiple activities, you may need to cumulatively hold the sum of the required capital for each activity. VARA hasn’t explicitly stated that you can “reuse” the same capital for two regulated activities, so the prudent approach is to assume requirements stack. For example, if you’re getting a licence for both Exchange (self-custody) and Custody services, you might need AED 1,500,000 + 600,000 = 2,100,000 total paid-up capital to cover both, unless VARA advises otherwise. This is a key reason why multi-service providers need to be well-capitalised.
From a cost perspective, paid-up capital is money that could otherwise be used for operations, so it’s a form of cost (opportunity cost) to the business. However, it remains your asset. Still, having to lock USD 500,000+ (around AED 1.8 million) in capital for an exchange, for example, means only companies with sufficient funding can pursue those licences.
For planning, a small VASP (single activity) might only need AED 100k–500k in capital (depending on activity), whereas a larger multi-activity firm should be prepared to inject several million dirhams of capital to meet all requirements. This in part explains the statement that licensing costs start at around USD 500,000 and increase with regulatory requirements – for many companies, a big portion of that is the paid-up capital that must be set aside.
3. Company incorporation and infrastructure costs
In order to be licensed, you must also have a legal entity in Dubai (mainland or an approved free zone). There are costs associated with setting up and maintaining the company itself, separate from VARA’s fees:
Free zone setup costs
Many VARA applicants incorporate in the Dubai World Trade Centre (DWTC) free zone, which works closely with VARA. The free zone (or Department of Economy for mainland) will charge fees for business registration, trade licence issuance, and annual renewal. For example, DWTC’s “Digital Asset” free zone packages range roughly from AED 44,500 per year for a proprietary trading or blockchain tech entity, up to AED 78,300 per year for an entity licensed for more intensive activities like Exchange or Custody. These packages often include the trade licence and a certain number of visas for employees. If you choose a different free zone (like Dubai Multi Commodities Centre DMCC or others if they accommodate crypto businesses under SCA or VARA), their fees might differ (DMCC crypto proprietary licence historically was around AED 30k–50k annual plus a refundable deposit).
Office space
Free zones usually require a minimum office or desk space lease as part of the licence package. This can range from flexi-desk (cheaper) to physical offices. Budget a few thousand to tens of thousands of AED annually depending on your space needs. Under VARA, having a real presence is important (especially for exchanges), so plan for an appropriate office as you scale.
Local staff and visas
You will need at least one UAE resident director or authorized representative to liaise with VARA (though not explicitly stated, practically someone on the ground is needed). Also, hiring a Compliance Officer/MLRO who is competent in UAE’s AML rules is often expected – sometimes VARA will interview key personnel during the review. The cost of hiring experienced staff in Dubai (salaries, visa costs, etc.) should be factored. A good compliance officer’s salary can be AED 300k+ annually. VARA may ask for certain roles to be filled before final licensing, meaning you might incur these costs even before you fully launch revenue-generating operations.
Technology and infrastructure
If you’re launching an exchange or custody platform, the tech development (trading engine, wallet tech, cybersecurity measures) is a significant cost. While not a “licensing” cost per se, VARA will evaluate your tech readiness as part of the application (you must submit architecture and security details). Ensuring your systems meet VARA’s standards (for example, having audit logs, surveillance systems for market abuse, etc.) might involve additional investment. Smaller advisory-focused firms might have minimal tech costs, but an exchange platform can run into the hundreds of thousands of dollars in development or vendor contracts.
Professional services
Aside from compliance consulting, you may need legal counsel to review documents, or assistance in business plan writing, etc. Some firms bundle this in the earlier-mentioned compliance cost, but keep a buffer for extra help if needed.
A startup VASP offering a single service (say a crypto advisory or small broker) might incorporate with a free zone package of ~AED 50k, use a flexi-desk, and initially have 1-2 staff – their upfront company-related costs might be on the order of AED 50k–100k (plus the paid-up capital which sits in the bank). A larger company or exchange will likely spend far more: e.g., AED 70k+ on the trade licence, perhaps AED 100k on an office lease, and significant sums on recruiting a team and building technology.
It’s not unreasonable that a serious exchange could burn through over USD 1 million in total setup costs (inclusive of capital, tech, staff, etc.) before ever launching, whereas a modest consulting-type VASP might manage with a few hundred thousand AED in total.
4. Summary: small vs. large setup
To put it all together, let’s contrast two scenarios:
Small setup (e.g. Advisory firm or small broker)
Might incur VARA fees ~AED 140k (40k application + 80k first year supervision + ~20k extension if needed), compliance consulting ~AED 500k, capital AED 100k (advisory) up to 500k (broker) locked but not spent, free zone registration ~AED 50k, other misc. ~AED 50k.
~AED 700k – 900k
Where ~500k of that is spent on services and fees, and the rest sits as capital. In USD, that’s roughly $190k–$245k out-of-pocket plus $27k–$136k in capital that remains in bank.
Large setup (e.g. crypto exchange self-custody)
VARA fees ~AED 300k (maybe 2 activities: exchange + custody: 100k+100k application, 200k+200k annual – though annual supervision is also capitalised going forward), compliance and policies ~AED 600k+ (due to complexity), capital AED 1.5 million (minimum, could be more with overhead %), company setup and infrastructure perhaps AED 300k+ (including premium office, multiple staff before launch, tech costs).
~AED 2.5 – 3 million
With ~1.0m of that actually spent on fees/consultants and ~1.5m parked as capital. In USD, roughly $680k–$820k required, with about $270k+ being expenditure and $410k+ held as capital.
Of course, these are indicative figures – actual costs will vary. But it illustrates that even a “small” VARA-licensed operation likely needs a budget well into six figures (USD), and larger ventures should be prepared to invest seven figures. Starting at around USD $500,000 (AED ~1.8M) is a reasonable minimum benchmark for total budget, scaling upward with additional regulatory requirements and business complexity.
Remember that beyond the monetary costs, there is also a time cost. The VARA licensing process can take several months (often 6–12 months from initial application to final licence, depending on the preparedness of the applicant and VARA’s queries). During this time, capital is tied up and expenses accumulate, so having sufficient working capital to sustain the company through the application period is essential.
Banking for VARA-Licensed businesses in Dubai
Recommended banks
Access to banking services is a critical aspect of running any business – and for crypto companies, it has historically been a pain point globally. In Dubai, having a VARA licence significantly improves your ability to obtain a bank account and related financial services, as banks view regulated entities more favorably.
VARA’s role in banking
While VARA itself is not a bank, its regulatory oversight gives banks comfort that a crypto business is not operating in a legal grey area. In fact, VARA has been actively engaging with banks to bridge the gap between traditional finance and the crypto sector. As a result, a few banks in the UAE have started positioning themselves as crypto-friendly or at least open to licensed VASPs.
Here are some banking options and recommendations for VARA-licensed businesses:
Zand Bank
Zand is the UAE’s first fully digital bank and has made headlines for its crypto-forward approach. It became the first UAE bank to receive VARA’s approval for providing digital asset custody services. This means VARA vetted Zand’s systems and gave a green light for Zand to custody crypto assets for clients – a strong signal of trust. For a VARA-licensed company, Zand is a top choice to consider for opening an account, as they clearly understand the industry. They offer corporate banking and are building institutional-grade crypto custody solutions, which could be complementary if your business needs a secure banking partner to hold fiat and even digital assets. Being a new bank, account opening processes might be more tech-driven and possibly more flexible for startups than some traditional banks.
Mashreq Neo and other local banks
Some established banks in the UAE have started exploring services for crypto companies. For instance, Mashreq Bank has a digital banking arm (NeoBiz) that has reportedly been open to fintech and possibly crypto-related accounts on a case-by-case basis. RakBank (National Bank of Ras Al Khaimah) has shown interest in crypto by facilitating retail crypto trading through exchanges (in a pilot program), indicating a progressive stance. Emirates NBD, one of Dubai’s largest banks, has a knowledge partnership with Dubai’s blockchain initiatives, though publicly it’s cautious on crypto businesses. The key with traditional banks is that having a VARA licence puts you in a different category – you can demonstrate you are fully compliant with local laws. When approaching these banks, presenting your VARA licence (or initial approval) and robust compliance program will be essential.
International banks & EMI providers
Some international banks operating in UAE (like Standard Chartered or Swiss banks with local presence) have global crypto initiatives. Standard Chartered, for example, has a crypto custody subsidiary (Zodia) abroad; while they may not bank local startups, larger VARA-licensed entities might find an inroad with their private banking if sufficiently capitalised. Additionally, UAE has a growing number of Electronic Money Institutions (EMIs) and payment providers regulated by the Central Bank – companies like Wio (an ADGM digital bank), etc. While not specifically catering to crypto, as a VARA licensee you might access their services for day-to-day needs if traditional banks are slow.
VARA’s recommendations
VARA doesn’t officially “recommend” specific banks in public documentation; however, through industry events and closed-door meetings, it’s known that VARA has been in dialogue with certain banks to educate them about the regime. Market participants often learn which banks are currently most receptive by sharing experiences. As of 2024, Zand is clearly at the forefront (given its public VARA-related announcement), and a few others like Mashreq NeoBiz or FAB (First Abu Dhabi Bank’s SME unit) have been mentioned by companies as approachable. Always check the latest, as this space is evolving quickly in the UAE.
Opening account
Even with a VARA licence, be prepared for thorough due diligence by banks. You will need to present your licence, company incorporation documents, detailed business model explanation, information on your customers and volume projections, and your AML/KYC policies (yes, banks will want to see that you have strong AML controls – they may even ask for your VARA submission documents or compliance manual extracts to understand how you prevent illicit flows). Banks in the UAE also often require a minimum balance for corporate accounts (which can range from 50k to 500k AED depending on the bank and account type). Ensure you maintain whatever minimum average balance is required to avoid account fees or closure.
Banking costs
Keep in mind potential costs like account opening fees, annual maintenance fees, incoming/outgoing transfer fees, forex conversion fees, etc. These are generally modest (a few thousand AED or less), but it’s worth comparing. Some banks offer fee waivers for startups or in promotional campaigns.
Multiple accounts
It might be prudent to establish accounts with more than one bank if possible, to diversify risk. For example, some VARA-licensed firms maintain a primary account with a local bank for AED transactions and salaries, and another with an international fintech-friendly platform for USD/EUR international transfers, etc. As the ecosystem matures, we expect more banking options to open up.
In summary
Obtaining a VARA licence will greatly improve your banking prospects in Dubai. Banks that once categorically denied “crypto companies” will at least consider a licensed crypto company. By choosing progressive institutions like Zand or others known to work with VASPs, you can establish reliable banking channels for your operations. Always approach the bank with a professional package of documents and be ready to educate them on your business (don’t assume the first branch manager knows what staking or DeFi is – focus on how you are licensed and compliant). Over time, as VARA licensees grow in number, banking should become steadily easier. Dubai’s vision is to integrate crypto into its economy, and the banking sector is a crucial part of that integration.
Contact Aston VIP if we should help you setup a business bank account
If you need assistance with opening a bank account as a crypto business, check out our detailed guide on opening a company bank account in Dubai which covers requirements and tips for VARA-licensed entities.
Leading legal consultants for VARA licensing: A Comparison
Compare offers of the leading firms
Navigating the VARA licensing process is complex, which is why many businesses turn to legal and compliance consultants for help. Dubai has a growing cadre of experts – from boutique advisory firms to international law practices – that specialise in virtual asset regulation. Below, we compare some of the leading firms and what they offer:
Aston VIP
Full disclosure: Aston VIP (the author of this guide) is itself a specialist in business setup and VARA licensing support in Dubai. We provide end-to-end guidance, from initial structuring to compliance documentation and liaising with VARA. Our strength lies in a holistic approach – not only handling the paperwork but also advising on banking (we maintain contacts with crypto-friendly banks) and on-ground support like PRO services. (We also ensure post-licensing support to keep you compliant year-round.) Our sister company, Scancruit DMCC, can also assist with hiring specialised talent for your crypto businessIf you’re looking for a one-stop partner, we’re here to help set up your crypto company in Dubai with full VARA compliance – feel free to reach out to us for a free consultation
KARM
KARM offers legal advisory for structuring, drafting of bespoke policies, and ensuring your business model adheres to local laws. As a law firm, they bring a legal opinion perspective – which can be crucial if your case has any nuances (e.g., a new type of crypto product that might need interpretation under the law). They have assisted both startups and large entities in the UAE crypto sphere. However, as a high-caliber firm, their fees may be on the higher side. You’re paying for seasoned lawyers who can interface with VARA on complex issues and even help with things like token legal opinions.
Cavenwell 3.0
Cavenwell is a newer entrant, a consultancy firm (part of Cavenwell Group) focusing on Web3 corporate structuring, as evidenced by their contribution on VARA in Mondaq. They position themselves as a specialist in navigating the regulatory side and the company formation side for blockchain businesses. A firm like Cavenwell can help especially with the two-stage application (they’ll ensure your Initial Disclosure Questionnaire and business plan align with what VARA expects). Being a boutique, they might offer more personalised service, guiding first-time founders through every step. Their team includes compliance professionals rather than just lawyers, which can be helpful for the hands-on creation of policies and procedures.
Finjuris Law Firm
Finjuris (UAE) markets itself as a “premier law firm” for VARA consulting. They cover all aspects from legal to corporate setup. Finjuris highlights not just VARA, but also other jurisdictions (like RAK DAO or international crypto licenses), so they can advise on comparative solutions too. In VARA projects, they would typically help prepare all documentation and can also represent clients in communications with VARA if any legal clarifications are needed. A benefit of firms like Finjuris is their broader view – if for some reason VARA isn’t the right route for a client, they can suggest alternatives (like perhaps a DMCC crypto proprietary license which is a different path for those not serving third parties). Their fees are usually modular (they might charge for initial consultation, then separate packages for document prep, etc.). They are a solid choice for small to medium businesses that want a legal team’s assurance throughout the process.
International law firms (e.g. Norton Rose Fulbright, White & Case, DLA Piper, Addleshaw Goddard)
Several global law firms have been active in Dubai’s crypto regulation space. For instance, Norton Rose Fulbright advised the crypto exchange Bybit on its Dubai licensing, and DLA Piper was an advisor to VARA itself in creating the regulatory framework. Addleshaw Goddard published high-level guides on how to apply for a VARA licence. Engaging such firms brings unparalleled expertise and networking – they often can get clarity from the regulator quickly due to their involvement at high levels. However, their services are geared towards large entities (think major exchanges, big tech firms entering crypto, or institutional players) given their fee structures. If you are a well-funded venture aiming for top-tier legal counsel and possibly needing support across multiple jurisdictions, a global firm could be appropriate. They will ensure absolute thoroughness and can handle complex corporate structures or novel products interacting with VARA (like derivatives, etc.). For smaller startups, the cost might be prohibitive and perhaps overkill.
Comparison factors
When choosing a consultant or firm to assist with VARA licensing, consider:
Experience
Have they successfully helped others get a VARA licence? Can they point to case studies or clients (even if unnamed) who went through VARA with their help?
Services included
Some firms will handle everything end-to-end (business setup, policies, VARA forms, banking intro, etc.), others might focus only on the compliance docs and leave you to handle incorporation or vice versa. Make sure you know what’s included.
Get a quote or at least a range. Some charge a flat package fee, others bill hourly (especially big law firms). Ensure the budget aligns with your expectations. Sometimes a slightly higher upfront fee for a very good consultant can save you time (and ongoing costs) by getting the licence faster or avoiding regulatory pitfalls.
A local boutique might give more hands-on support (literally sitting with you to fill forms) whereas an international firm will give high-level strategic advice and polished documentation. Decide which style fits your needs.
Will they continue to advise you after you get the licence? For example, helping with VARA’s periodic reporting or any new rules that come out? This can be valuable, effectively acting as your external compliance advisor until you build your in-house team.
Many businesses actually use a combination – e.g. hiring a specialised compliance consultancy to draft policies and a corporate service provider to handle free zone paperwork. However, there are integrated providers (like our firm, Aston VIP) that can coordinate all these pieces for you.
Initial consultations with most of these firms are often free or low-cost. Speak with a couple to gauge their knowledge and responsiveness. Given the importance of getting the licence, choosing the right advisor is an important decision.
You can learn more about our VARA licensing support services on our VARA licence page, and see how we compare to others in terms of a comprehensive service package.)
Step-by-Step process to obtain a VARA licence
Step-by-Step guide
Now that we’ve covered the groundwork, let’s walk through the process of actually getting the VARA licence. The process is divided into two main stages, as defined by VARA’s procedure:
Stage 1: Approval to Incorporate (ATI)
This stage is essentially about obtaining preliminary approval from VARA that your proposed business is acceptable, after which you set up your company.
Initial Consultation & Disclosure
It can be helpful (though not mandatory) to have an initial meeting or consultation with VARA’s team or attend one of their workshops if available. Many applicants start by informally discussing their plan with VARA or through their consultants to get feedback.
Officially, the first required step is to submit an Initial Disclosure Questionnaire (IDQ). The IDQ is a form that captures the fundamentals of your proposal – information about the founders, the nature of the business, the specific activities (license categories) you seek, and initial risk/compliance considerations.
This is submitted to the relevant authority depending on your intended incorporation: Dubai Economy & Tourism (DET) for a mainland company, or a free zone if you’re going that route. Essentially, DET or the free zone will forward your IDQ to VARA.
Submit Required Document
Along with or after the IDQ, you’ll need to provide a business plan, details of shareholders and senior management (passport copies, CVs, etc.), and possibly preliminary compliance outlines.
At this stage, you don’t need the full policy set, but you should have an articulate business plan highlighting how you will meet VARA’s requirements generally (e.g. mention that you will implement AML policies, have experienced compliance officer, etc.). VARA is checking the suitability of the firm and persons in control.
Submit Required Document
VARA will review the IDQ and documents. They may come back with questions or require a meeting with the founders to discuss the plan. They will evaluate if the proposed activity falls under VARA’s scope and if the applicants appear to have the seriousness and integrity to proceed. If all is good, VARA issues an Approval to Incorporate (ATI). This is essentially a no-objection for you to proceed with setting up the company and preparing for full licensing.
Important: With an ATI, you can incorporate your company (get your trade licence from the free zone or DET) and start building infrastructure, but you CANNOT yet conduct any revenue-generating or public business involving virtual assets. The ATI often comes with conditions like “must incorporate in X free zone under Y activity within 3 months” etc.
Company Incorporation
Using the ATI, you then formally set up the company (if you haven’t already). In many cases, applicants choose to incorporate after ATI to avoid spending on company setup in case ATI was denied.
With ATI in hand, you’d go to the free zone or DET and complete the company registration, get your trade licence (which might state “Under formation – pending VARA final approval” or similar wording). You will also proceed to do things like lease office space, hire initial staff, and “operationalise” your setup as per VARA’s guidance.
They want to see that by the time you come for the final licence, you have an office, local presence, and are nearly ready to launch (just waiting on the VARA final go-ahead).
Timeline
Stage 1 can take a few weeks to a few months. Much depends on the quality of your initial submission. Simple cases (e.g. a well-documented team with a straightforward business model like proprietary trading) might get ATI in 4–6 weeks. More complex ones (say a new exchange with international founders) might involve 2–3 rounds of Q&A and take 3+ months to get ATI.
Stage 2: VASP Licence Application (Full Licence Approval)
Once the company is incorporated and you’ve fulfilled the initial conditions, you move to the substantive licensing stage.
Preparation of Comprehensive Documentation
At this stage, you need to submit the full suite of documents in line with VARA’s VASP Application Rulebook and guidance. This will include:
All those documents we discussed in the compliance section, now is when they must be polished and ready.
E.g. a bank letter showing the paid-up capital is deposited in a UAE bank account.
Board resolutions, organizational chart, roles of key personnel, perhaps employment contracts of the compliance officer and other senior staff to show they are in place.
VARA may require a specific risk assessment document outlining how your business will manage and mitigate risks associated with its activities.
Especially for exchanges or custodians, you might need to provide SOPs (Standard Operating Procedures) for how transactions will be handled, how custody of assets is managed (with security protocols), business continuity plans, etc.
Sometimes VARA’s ATI comes with a list of items to cover in Stage 2. Make sure each is addressed.
Essentially, Stage 2 is where you present VARA with the evidence that
“We have now built what we promised – here are all the blueprints, manuals, and systems demonstrating we are ready to operate in a safe and compliant manner.”
Submission & VARA Review
You will submit the above (usually through an online portal or via the free zone’s coordination channel). VARA will conduct a thorough review. Expect iterative feedback: VARA might come back with questions or required clarifications. They may invite you to meetings or interviews during this review.
For example, the responsible Compliance Officer and maybe CTO could be asked to meet with VARA’s supervision team to walk through the systems and controls. VARA could also require a presentation or demonstration – e.g., showing the interface of your exchange and how KYC is enforced, etc.
Final Payments
At some point before final approval, you’ll need to pay the remaining 50% of the application fee (if you paid half at ATI) and the first year’s annual supervision fee. This payment is required to actually receive the licence.
Final Approval
Licence Issuance: Upon satisfactory review, VARA will issue the VASP Licence. This licence certificate (or electronic equivalent) will specify the name of your entity and the approved activities (e.g. “Licensed by VARA for Providing Exchange Services and Custody Services”).
Conditions
Note that the licence may come with certain conditions or limitations. For instance, VARA might limit your exchange to only professional investors at first, or cap the value of transactions until they are comfortable, etc., depending on your case. They could also require a post-licensing audit within a few months as a condition. Ensure you read any conditions carefully and comply with them to avoid issues.
Go Live (With Caution)
Now you can officially launch your services to the market, but ensure you stick within the scope you’ve been granted. Any expansion of activities or major changes will require VARA’s approval (variations or new licences). Also, you must register with VARA any brand names or trading names you use (and possibly get marketing content approvals – see next section on ongoing compliance).
Timeline
Stage 2 can range widely. Some firms have gotten through Stage 2 in 2–3 months when everything was in order and the scope was limited. Others have taken 6+ months if there were many back-and-forth queries. A lot depends on how novel or risky your business is – a straightforward advisory firm might sail through, whereas a complex exchange might undergo rigorous scrutiny. Being responsive to VARA’s questions and providing complete info the first time goes a long way to speed this up.
Throughout both stages, it helps tremendously to have local advisors or team members who can communicate with VARA in real-time. VARA’s team is known to be approachable – they may even call or email directly for clarifications. Prompt and transparent communication builds trust.
Remember, VARA ultimately wants successful, compliant businesses – if you show commitment to meeting their standards, they will generally guide you on how to get there.
Ongoing Obligations and Staying Compliant Post-Licensing
Here’s what you need to know about staying compliant after obtaining your VARA licence
Congrats, you have your VARA licence – but the journey doesn’t end here. Dubai’s regulatory framework requires licensed VASPs to continually meet compliance obligations and keep up with any new rules.
- Regular Reporting
VARA will mandate periodic reports from your company. This could include quarterly or bi-annual financial reports, compliance reports, and possibly risk assessment updates. For example, you might need to submit audited financial statements annually, and interim reports on key metrics (such as client assets under custody, transaction volumes, etc.).
Additionally, VARA may ask for AML-specific reports – e.g., summary of any suspicious transaction reports (STRs) you filed, or confirmation that no breaches occurred. Be prepared to dedicate resources (your compliance officer and finance team) to compile these reports accurately and on time.
- Annual Audit
Every VARA-licensed entity likely needs an annual external audit of financial statements (this is generally required under UAE company law too). But beyond financials, VARA might also require a compliance audit or inspection. They have the authority to conduct supervisory examinations, which could mean VARA officials visiting your office to review records and systems.
It’s wise to do an internal audit or compliance review ahead of VARA’s check-ins to ensure everything is in order. Also remember to renew your free zone trade licence annually and provide the renewed license copy to VARA as needed, since maintaining the local company is part of compliance.
- Ongoing Capital and Financial Health
The paid-up capital that you maintained for the licence must be maintained continuously. If you incur losses that eat significantly into that capital, you might breach VARA’s prudential requirements. VARA’s rules often require notifying them if your capital falls below the required threshold or if your fixed overheads increase such that you need to top up capital.
Additionally, there’s an “expense-based capital” requirement: firms must maintain liquid assets at least 1.2 times their monthly operating expenses. This means you should always have a buffer of liquidity to sustain operations for a while – a measure to prevent sudden collapses. It’s an obligation to monitor and ensure these financial ratios are met at all times.
- Training and Competency
VARA emphasizes that staff, especially those in compliance, risk, and key management, stay up-to-date. You should conduct regular training sessions on AML, cybersecurity, and regulatory changes.
Keep records of these trainings – VARA may ask for evidence that, for example, your team completed an annual AML refresher or that new hires are properly trained before dealing with clients. VARA might also issue new guidelines from time to time; part of ongoing compliance is integrating those into your policies and training your team accordingly.
- New Regulations and Updates
The crypto sector is fast-moving, and so is regulation. VARA has the power to introduce new rulebooks or adjust existing ones as the landscape evolves. For instance, in August 2022, VARA issued Marketing and Advertising Guidelines that all VASPs had to follow when promoting their services in Dubai (requiring clear risk disclaimers and no misleading statements, with fines up to AED 500k for violations).
As a licensee, you need to keep abreast of such updates. Subscribe to VARA’s announcements or engage with industry associations. When new rules come (for example, rules on stablecoins or staking services if those are introduced in the future), promptly assess if they apply to your business and ensure compliance. VARA often gives a grace period to implement changes – use that time wisely.
- Change Management
If your business is doing well, you might want to expand services or make changes – e.g., add a new token to your exchange, start offering lending in addition to exchange, change a key person like your CEO or Compliance Officer, or even pivot your business model. Be aware that material changes require VARA notification or approval. Adding a new regulated activity definitely means applying for a licence variation (and paying additional fees).
Changing senior management or ownership above certain thresholds likely requires prior VARA approval or at least notification for a fit-and-proper check. Even launching a new product feature might necessitate a conversation with VARA to ensure it doesn’t fall outside your licence scope. Always refer to your licence conditions and VARA’s rules on changes, and when in doubt, communicate with V
- Market Conduct and Consumer Protection
VARA’s regime includes rules on how VASPs must behave in the market – for example, avoiding conflicts of interest, prohibitions on insider trading or market manipulation if you run an exchange, etc. Ensure these are part of your internal policies and that your staff understand them. If you’re an exchange or trading platform, you’ll need surveillance mechanisms to detect and report any market abuse.
If you’re managing assets, there are rules about segregating client assets, proper disclosures, and not making false promises. Non-compliance can lead to investigations and penalties. Remember, VARA can impose fines, and even publicly reprimand or “name and shame” violators if needed – reputationally that could be damaging, so strive for a clean compliance record.
- Licence Renewal
VARA licences are typically valid for one year at a time. Renewal will involve paying the annual supervision fee for the next year (AED 80k/200k per activity) and possibly a renewal form confirming that key information is up to date. It’s mostly administrative if nothing significant has changed in your business and if you’ve been compliant.
However, delay in payment or filing could lapse your licence, so mark your calendar to start the renewal process at least a month or two in advance each year. VARA usually sends renewal notices 90 days before expiry as a reminder (as noted in some guides).
- Coordination with Other Authorities
Aside from VARA, your business might intersect with other regulators. For instance, if you plan to offer security tokens or something that might be seen as financial security, the UAE’s SCA or the financial freezone regulators (like FSRA in ADGM or DFSA in DIFC) could have overlapping jurisdiction. While VARA covers most of Dubai, ensure you’re only operating within Dubai (not targeting customers in Abu Dhabi or elsewhere without appropriate licences there). Also, adhere to Central Bank rules on currency conversions and any applicable consumer protection laws at the federal level.
As a VARA licensee, you’re largely ring-fenced to Dubai’s remit, but large players coordinate with federal bodies as needed (for example, stablecoin issuers might need Central Bank discussion). In July 2023, the UAE introduced a federal licensing regime via the SCA for virtual assets in other emirates – but Dubai (VARA) remains separate under its own law. Just keep aware of the wider regulatory mosaic.
Conclusion and next steps
Unlock the opportunities in one of the world’s most crypto-friendly business hubs.
Obtaining a VARA licence in Dubai is a substantial undertaking, but it unlocks tremendous opportunities in one of the world’s most crypto-friendly business hubs. In this guide, we’ve covered the full journey: from understanding VARA’s regulatory landscape and choosing the right licence category, through budgeting for costs (compliance, capital, fees) and setting up your company, to navigating the application stages and maintaining compliance after launch.
Obtaining a VARA licence in Dubai is a substantial undertaking, but it unlocks tremendous opportunities in one of the world’s most crypto-friendly business hubs. In this guide, we’ve covered the full journey: from understanding VARA’s regulatory landscape and choosing the right licence category, through budgeting for costs (compliance, capital, fees) and setting up your company, to navigating the application stages and maintaining compliance after launch.
Key takeaways
Early planning of your compliance framework, capital, and operational setup will save you time later. Engage experts if needed and don’t cut corners on the application dossier – detail and accuracy are your friends when dealing with regulators.
Recognise that a significant up-front investment is required. Ensure you have the financial resources not just for fees, but for building the infrastructure and team to meet VARA’s expectations. It’s far better to be slightly over-prepared (and overspend a bit on compliance) than under-prepared and face delays or rejections.
Leverage internal links and guides – for instance, review our VARA licence services page or the Crypto Company Setup guide for more insights on company formation. Stay updated with VARA’s own website and publications for any rule changes or announcements.
Whether it’s a bank for your accounts or a legal consultant for your licence, pick partners who understand the crypto industry. Their knowledge will smooth out many hurdles that newcomers might stumble on.
The crypto world evolves quickly. Be ready to adapt your business (and compliance) to new regulations, new technologies, and new market conditions. Dubai is actively encouraging sectors like the metaverse, NFTs, and beyond – VARA’s scope may expand, giving licensed companies like yours a chance to diversify into new virtual asset realms with regulatory clarity.
As a final note, keep in mind that the reward for going through this intensive licensing process is the ability to operate in a world-class environment with the backing of a progressive government.
Dubai offers access to a global talent pool, a cosmopolitan customer base, strong infrastructure, and a timezone that bridges the East and West. With VARA’s licence in hand, you can confidently grow your crypto business and even expand across the region, leveraging Dubai’s reputation.
We hope this guide has demystified the VARA licensing journey and served as a valuable roadmap.
If you’re ready to take the next step, consider consulting with our team at Aston VIP or one of the other experts mentioned – getting experienced guidance can turn a challenging process into a manageable project.
Embarking on your VARA licence application?
Good luck – and welcome to the future of virtual assets in Dubai! With meticulous preparation and the right support, you’ll soon join the ranks of VARA-regulated firms leading the crypto revolution in the UAE.
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