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Virtual assets, including cryptocurrencies like Bitcoin, Ethereum, and Ripple are gaining momentum as means of payment. They are largely popular in the United Arab Emirates, where a good number of the residents engage in trading-related activities. The government has since put measures in place to coordinate the activities fairly and inclusively.
Introducing the VARA License: what is it?
A VARA (Virtual Assets Regulatory Authority) license in Dubai is an official authorization issued by the Virtual Assets Regulatory Authority (VARA), the governing body responsible for overseeing and regulating virtual asset-related activities in the emirate. This license allows businesses to legally operate within Dubai’s virtual asset ecosystem, ensuring compliance with established regulatory frameworks.
The VARA license is specifically designed for companies engaging in cryptocurrency trading, custody, brokerage, investment services, payments, and token issuance. It establishes a structured regulatory environment aimed at mitigating financial risks, preventing illicit activities such as money laundering, and fostering investor protection and market integrity.
VARA operates under Dubai’s Law No. 4 of 2022, which sets out a legal foundation for virtual asset activities. The licensing process involves comprehensive due diligence, compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, and adherence to international best practices in financial security and data protection.
The VARA framework categorizes virtual asset service providers (VASPs) into different tiers based on their activities, such as exchange operators, custodians, advisory firms, and token issuers. Each category has distinct compliance requirements, capital adequacy standards, and operational guidelines.
A VARA license is mandatory for businesses wishing to engage in virtual asset-related activities within Dubai, and operating without one can result in legal penalties, fines, and business restrictions.
Challenges of Obtaining a VARA License in Dubai & How to Overcome Them
Applying for a Virtual Assets Regulatory Authority (VARA) license in Dubai can be a complex process due to strict compliance requirements and regulatory procedures. Here are some of the key challenges applicants face and how to navigate them effectively:
Stringent Regulatory Compliance
Dubai has implemented strict regulations in line with international anti-money laundering (AML) and counter-terrorism financing (CFT) standards. Businesses must demonstrate full compliance with VARA’s guidelines.
Solution: Work with legal experts to ensure all compliance requirements are met, including AML policies, KYC procedures, and risk management frameworks. Aston VIP offers guidance to ensure businesses align with all necessary regulatory standards.
High Capital Requirements
Depending on the type of virtual asset activity, businesses must meet substantial minimum share capital requirements, which can be financially demanding.
Solution: Plan your financial strategy and explore funding options, such as partnerships or venture capital investments. Aston VIP helps businesses structure their financial plans effectively.
Complex Documentation & Approval Process
The VARA application involves extensive documentation, including business plans, operational policies, and financial reports. Delays in approvals often result from incomplete or incorrect submissions.
Solution: Prepare and review all required documents carefully. Consulting with specialists like Aston VIP ensures that applications are complete and meet VARA’s requirements, reducing the chances of rejection or delays.
Lengthy Application Process
The licensing process can take anywhere from 3 to 9 months, depending on the business model and regulatory reviews. Businesses need to plan their operations accordingly.
Solution: Start the process early and maintain regular communication with VARA. Aston VIP assists businesses in navigating the licensing timeline efficiently, ensuring minimal delays.
Adapting to Changing Regulations
The virtual assets industry is rapidly evolving, and regulations may change over time. Businesses must stay updated to remain compliant.
Solution: Engage with industry experts and regulatory consultants who monitor VARA’s updates. Aston VIP keeps clients informed of any regulatory changes, ensuring they stay ahead of compliance requirements.
Why Choose Aston VIP?
At Aston VIP, we specialize in business setup services, particularly in company formation and VARA licensing in Dubai. Our team of experts provides:
- End-to-end assistance with VARA license applications
- Guidance on regulatory compliance and documentation
- Support in structuring financial and operational frameworks
- Ongoing advisory services to adapt to regulatory updates
Navigating Dubai’s virtual asset regulations can be challenging, but with the right expertise, your business can successfully obtain a VARA license and thrive in the market. Contact Aston VIP today to get started on your licensing journey!
Who needs to obtain a VARA License in Dubai?
A VARA (Virtual Assets Regulatory Authority) license is required for businesses and entities involved in virtual asset-related activities in Dubai. The licensing framework ensures that only regulated and compliant companies operate in the cryptocurrency, blockchain, and digital asset sectors.
Virtual Asset Service Providers (VASPs)
The Financial Action Task Force (FATF) defines VASPs as businesses that facilitate virtual asset transactions. Any company classified as a VASP in Dubai must obtain a VARA license to operate legally.
Entities that require a VARA license:
Cryptocurrency exchanges
Any platform that facilitates the buying, selling, and trading of cryptocurrencies, stablecoins, and tokenized assets must be licensed. This includes:
- Centralized exchanges (CEXs) like Binance or Coinbase (if operating in Dubai)
- Decentralized exchanges (DEXs) that provide liquidity and peer-to-peer trading
- OTC (Over-the-Counter) trading desks that offer direct crypto transactions
Digital wallet providers
Companies that offer crypto storage solutions, including:
- Custodial wallets, where the provider controls private keys
- Non-custodial wallets that allow users to manage their private keys but provide additional services
These businesses need to comply with security standards and anti-money laundering (AML) measures under VARA regulations.
Crypto asset management firms
Businesses involved in the investment, management, or advisory services related to virtual assets must obtain a VARA license. This includes:
- Hedge funds and venture capital firms investing in digital assets
- Portfolio management services specializing in cryptocurrencies
- Wealth management firms providing crypto-related financial advice
Token issuers and Initial Coin Offering (ICO) platforms
Companies that issue, promote, or facilitate the sale of new digital tokens or cryptocurrencies must obtain a VARA license. This includes:
- Security token offerings (STOs)
- Utility token sales
- ICO (Initial Coin Offering) and IDO (Initial DEX Offering) platforms
Virtual asset custody services
Entities that provide secure storage and management of digital assets on behalf of clients require VARA licensing. Custody services often cater to:
- Institutional investors looking for safe storage solutions
- High-net-worth individuals (HNWIs) seeking secure digital asset protection
Crypto payment service providers
Companies that facilitate crypto payment processing and settlements for businesses must be licensed under VARA. This includes:
- Crypto payment gateways (e.g., BitPay, CoinGate)
- Merchants accepting cryptocurrency payments
- Crypto-to-fiat conversion service providers
Virtual asset brokers and dealers
Individuals or firms that act as intermediaries in virtual asset transactions, including:
- Over-the-counter (OTC) crypto brokers
- Market makers who provide liquidity for virtual asset markets
Crypto lending and staking platforms
Platforms that offer crypto-based lending, borrowing, or staking services must register under VARA. This includes:
- Crypto lending platforms that allow users to borrow against digital assets
- Staking-as-a-service providers that enable users to earn rewards by staking their cryptocurrencies
Foreign companies expanding to Dubai
Foreign virtual asset businesses that want to operate in Dubai must obtain a VARA license and establish a local presence either:
- In a Dubai Free Zone (such as Dubai International Financial Centre – DIFC)
- As a Mainland UAE company
Even if a company is licensed in another country, it must still comply with VARA regulations to operate in Dubai.
Startups and entrepreneurs in blockchain & web3
New businesses focused on blockchain technology, DeFi (Decentralized Finance), metaverse projects, and NFT marketplaces also need VARA licensing if their operations involve:
- Issuing or trading digital tokens
- Building decentralized applications (dApps) that involve virtual assets
- Operating Web3 financial services
Who is exempt from a VARA License?
Some blockchain technology companies that do not directly deal with virtual asset transactions may be exempt. Examples include:
- Blockchain development firms that do not handle customer funds
- Educational platforms that provide crypto learning resources
- Technology providers offering blockchain infrastructure services
What is a VARA License Rulebook?
The VARA Rulebook is a set of regulations and guidelines issued by the Virtual Assets Regulatory Authority (VARA) of Dubai to govern the activities of businesses operating in the virtual asset sector. It establishes a comprehensive regulatory framework for cryptocurrency exchanges, digital wallets, asset managers, token issuers, and other virtual asset service providers (VASPs).
The Rulebook ensures transparency, security, and consumer protection while aligning with global anti-money laundering (AML) and counter-terrorism financing (CFT) standards. It includes:
- Compliance requirements for obtaining and maintaining a VARA license
- Operational guidelines for secure and ethical business conduct
- Risk management and security measures for virtual asset transactions
- Penalties and enforcement actions for violations
The rules in the VARA license rulebook lay the legal foundation for regulating virtual asset transactions in Dubai. Following these rules helps to ensure a coordinated, safe, and transparent digitalized economy.
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Categories of the VARA License in Dubai
The choice of a VARA license depends on your business model and the virtual asset services you plan to offer in Dubai. Each license ensures compliance with Dubai’s regulatory framework while promoting transparency and security in the crypto ecosystem.
If you’re looking to enter Dubai’s booming virtual asset market, understanding the different VARA license categories is essential. The Virtual Assets Regulatory Authority (VARA) offers various licensing options depending on the type of business and services provided. Here’s a breakdown of the main categories:
Advisory services license
This VARA license in Dubai is for businesses providing consulting, research, and advisory services related to virtual assets. It applies to firms that:
- Offer investment advice on cryptocurrencies or tokenized assets
- Provide market analysis and research on virtual asset trends
- Help businesses navigate regulatory compliance in the crypto space
Broker-dealer license
This VARA license is required for companies acting as intermediaries in virtual asset transactions. It covers:
- Crypto trading platforms facilitating buying and selling
- Over-the-counter (OTC) brokers offering large-scale crypto trades
- Market makers who provide liquidity to crypto exchanges
Custody services license
For businesses offering secure storage and management of digital assets, this license ensures compliance with strict security measures. It applies to:
- Crypto custodians holding assets on behalf of clients
- Digital wallet providers offering safekeeping solutions
- Institutional vault services for high-value virtual assets
Exchange services license
This license is for companies operating crypto exchanges where users can trade, swap, or convert virtual assets. It applies to:
- Centralized exchanges (CEXs) that facilitate fiat-to-crypto and crypto-to-crypto transactions
- Decentralized exchanges (DEXs) offering peer-to-peer trading without intermediaries
- Token swap platforms that allow users to exchange different cryptocurrencies
Lending and borrowing services license
This category covers businesses offering crypto lending and borrowing services, including:
- Platforms providing loans against virtual assets
- Staking-as-a-service providers where users earn rewards
- Yield-generating services that allow users to earn interest on crypto holdings
NFT marketplace license
If you’re running a marketplace for Non-Fungible Tokens (NFTs), you’ll need this VARA license in Dubai. It applies to:
- NFT trading platforms
- Digital art and collectibles marketplaces
- Metaverse and gaming NFT services
Token issuance license
Businesses looking to launch and distribute new tokens need this license, including:
- Initial Coin Offerings (ICOs)
- Security Token Offerings (STOs)
- Utility token issuances
To obtain a VARA (Virtual Assets Regulatory Authority) license in Dubai, businesses must submit a comprehensive set of documents. These documents ensure compliance with regulatory standards and demonstrate the company’s operational readiness.
Required Documents for a VARA License in Dubai
Company Incorporation Documents
- Certificate of Incorporation
- Memorandum & Articles of Association (MOA/AOA)
- Trade License (if applicable)
- Shareholder Structure and Ownership Details
Business & Operational Documents
- Detailed Business Plan outlining virtual asset activities, revenue model, and market strategy
- Organizational Chart with key management roles
- Proof of physical office presence in Dubai (if required)
Compliance & Regulatory Documents
- Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) Policy
- Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures
- Risk Management Framework
- Information Security & Data Protection Policy
- Internal Audit & Compliance Reports (if applicable)
Financial & Capital Requirements
- Proof of Minimum Share Capital (bank statements or financial guarantees)
- Audited Financial Statements (if available)
- Source of funds declaration for shareholders
Key Personnel Documents
- Passport copies & visa details of shareholders and directors
- Proof of residence (utility bill or tenancy contract)
- CVs & professional background of key personnel
- Police Clearance Certificate (for company directors and key executives)
Technical & Cybersecurity Documents
- IT Security & Data Protection Policy
- System Architecture & Technology Stack Overview
- Cybersecurity Risk Assessment Report
Additional Documents Based on Business Activities
- Tokenomics & Whitepaper (for token issuers and ICO/IDO projects)
- Smart contract audit reports (for blockchain-based platforms)
- Client agreement templates (for exchanges, brokers, and custodians)
Tip: The application process can be complex, and missing documents may lead to delays or rejection. Aston VIP specializes in company formation and VARA licensing, ensuring your application meets all regulatory requirements.
"The VARA Rulebook sets the foundation for a secure, transparent, and regulated virtual asset ecosystem in Dubai, ensuring compliance, consumer protection, and industry growth."
Application process for a VARA License
The VARA licensing process in Dubai involves several steps to ensure that businesses comply with the regulatory framework for virtual assets. Companies looking to operate in the crypto space must meet specific VARA license requirements before they can legally provide services. Here’s a step-by-step breakdown of the process:
Determine the type of license needed
Before starting the VARA licensing process, businesses must identify which category of VARA license suits their operations. This depends on the type of virtual asset services they plan to offer, such as trading, custody, advisory, or token issuance.
Establish a business entity in Dubai
To apply for a VARA license, the business must be legally registered in Dubai. Companies can set up in a Dubai Free Zone or Mainland, depending on their operational needs. A local presence is required for all virtual asset service providers.
Prepare the required documentation
One of the key VARA license requirements is submitting the necessary documents, which typically include:
- A detailed business plan outlining the company’s virtual asset activities
- Proof of company registration and ownership structure
- Compliance policies for anti-money laundering (AML) and know-your-customer (KYC) regulations
- Security measures to protect customer assets and data
Submit the license application to VARA
Once the documents are ready, the application is submitted to VARA for review. The authority will assess whether the business meets the necessary compliance and operational standards.
Regulatory review and approval
VARA conducts due diligence, evaluating the company’s financial stability, risk management policies, and adherence to local and international regulatory frameworks. This stage may include interviews or additional document requests.
Obtain final approval and pay fees
After successfully meeting all VARA license requirements, the business receives final approval and must pay the licensing fees. The cost varies depending on the type of virtual asset services provided.
Ongoing compliance and supervision
Even after obtaining a VARA license, businesses must comply with ongoing regulatory requirements. This includes regular audits, reporting obligations, and maintaining updated AML/KYC policies.
The VARA licensing process ensures that only compliant and secure businesses operate in Dubai’s virtual asset market. Companies must stay up to date with regulatory changes to maintain their license and avoid penalties.
The cost of obtaining a Virtual Assets Regulatory Authority (VARA) license in Dubai varies based on the specific virtual asset activities your business intends to conduct. Below is a breakdown of the fees associated with different services:
| Virtual Asset Activity | Application Fee | Annual Supervision Fee | Minimum Share Capital Requirement | Expected Timeline |
| Advisory Services | AED 40,000 | AED 80,000 | AED 100,000 | 3-6 months |
| Broker-Dealer Services | AED 100,000 | AED 200,000 | AED 400,000 or 15% of fixed annual overheads (if using a VARA-licensed custodian); otherwise, AED 600,000 or 25% of fixed annual overheads | 4-7 months |
| Custody Services | AED 100,000 | AED 200,000 | AED 600,000 or 25% of fixed annual overheads | 4-7 months |
| Exchange Services | AED 100,000 | AED 200,000 | AED 800,000 or 15% of fixed annual overheads (if using a VARA-licensed custodian); otherwise, AED 1,500,000 or 25% of fixed annual overheads | 6-9 months |
| Lending and Borrowing Services | AED 100,000 | AED 200,000 | AED 500,000 or 25% of fixed annual overheads | 4-7 months |
| VA Management and Investment Services | AED 100,000 | AED 200,000 | AED 280,000 or 15% of fixed annual overheads (if using a VARA-licensed custodian); otherwise, AED 500,000 or 25% of fixed annual overheads | 3-6 months |
Note: AED 1 = approximately USD 0.27
The timeline varies based on the complexity of the business model, compliance readiness, and regulatory reviews. The process generally includes:
- Pre-Application & Consultation (2-4 weeks) – Initial discussions, eligibility assessment, and documentation preparation.
- Application Submission & Review (6-12 weeks) – VARA assesses the application and compliance with regulations.
- Regulatory Approvals & Additional Requirements (8-16 weeks) – Due diligence, financial assessments, and final approvals.
- License Issuance (2-4 weeks) – Once approved, the business receives its VARA license and can begin operations.
In addition to the application and supervision fees, businesses must meet specific minimum share capital requirements, which vary depending on the type of service offered and whether a VARA-licensed custodian is used. These capital requirements are designed to ensure that companies maintain sufficient financial resources relative to their operational expenses.
It’s important to note that these fees are separate from any other charges that may be imposed by other competent authorities within or outside the UAE.
You should speak with a VARA license consultant to provide updated information regarding the requirements and fees accruing to the registration.
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Validity of the VARA license in Dubai
The VARA license in Dubai is valid for one year from the date of issuance. Businesses must renew their license annually by meeting compliance requirements, submitting updated documents, and paying the necessary renewal fees.
Failure to renew the license on time can result in penalties or suspension of virtual asset activities.
"The VARA license in Dubai is valid for one year and must be renewed annually to ensure compliance and uninterrupted virtual asset operations."
Benefits of getting a VARA license in Dubai
Obtaining a VARA license in Dubai offers several advantages for businesses operating in the virtual asset sector. Here’s why it’s beneficial:
- Regulatory credibility: A VARA license ensures compliance with Dubai’s official regulatory framework, enhancing trust and credibility in the global crypto market.
- Legal protection: Licensed businesses operate legally and securely, reducing risks of regulatory penalties or shutdowns.
- Access to Dubai’s growing crypto market: Dubai is a global hub for blockchain and crypto innovation, offering investment opportunities and a strong digital economy.
- Banking & financial services: Licensed entities may have better access to banking solutions, payment gateways, and financial services within Dubai’s ecosystem.
- Global expansion & investor trust: A VARA license improves reputation, making it easier to attract investors and expand internationally.
- Tax benefits: Dubai offers a business-friendly tax environment, with 0% corporate and personal income tax in many free zones.
- Access to innovation & partnerships: The UAE government supports blockchain, Web3, and crypto startups, providing opportunities for partnerships and growth.
Obtaining a VARA license in Dubai is a strategic move for any virtual asset business looking to operate legally, gain credibility, and tap into the region’s fast-growing digital economy. You leverage it to tap into the burgeoning market and build a solid base for your virtual asset services.
