How to Get a VARA License: The Ultimate Guide for Crypto Businesses

Since the introduction of Dubai’s Virtual Assets Regulatory Authority (VARA), crypto and blockchain businesses have flocked to the territory, looking to take advantage of its streamlined regulatory process, tax benefits, and increased access to funding.

However, while setting up shop in the UAE can remove a lot of the red tape you’re navigating at home, you’ll still need to follow an established process for obtaining your license to ensure all your business activities in the country are legal and transparent.

In this guide, we’ll explore what a VARA license is, the steps you’ll need to obtain one, and how to ensure you have the best experience possible when dealing with this regulatory authority.

What is a VARA License?

VARA stands for Virtual Assets Regulatory Authority. It’s a governmental body established by the government of Dubai in 2022, and is responsible for regulating the provision, exchange, and use of virtual assets like cryptocurrencies, NFTs, and tokens.

A VARA license is the main permit you'll need to operate a crypto business legally in Dubai, and generally stay within UAE cryptocurrency regulation once you’ve set up your business in the territory.

Aside from the necessity of making sure your operations in Dubai are legal, securing a VARA license can have several other important benefits, including:

• Maximizing the level of trust that potential investors and partners have in your brand.

• Greater access to Dubai’s forward-thinking cryptocurrency market, within a progressive regulatory framework that encourages innovation in the virtual asset space and can support you while you expand your services.

• A diverse array of VARA licence categories that are designed for different types of virtual asset businesses, including exchange, broker-dealer, advisory, and custodial services.

• Ongoing guidance and support from the VARA body itself, helping you stay in-step with evolving laws and ensure your whole operation keeps running smoothly.

Does My Crypto Business Qualify for a VARA License?

Like any kind of business regulation, VARA licensing has a few prerequisites your business will have to meet before you can successfully apply for a VARA license in Dubai.

In order to qualify for a VARA license, your crypto entity must:

• Be established in any freezone or mainland Dubai (except for the DIFC).

• Have senior decision makers who pass the authority’s “Fit and Proper” requirements, which covers things like qualifications, industry experience, and financial solvency status.

• Meet the relevant capital requirements, which varies depending on the type of business you’re seeking a VARA license for.

• Adhere to strict operational standards, including cybersecurity practices, AML (Anti-money laundering) compliance, and CFT (Countering the Financing of Terrorism) compliance.

Aside from making sure you can prove your business meets these requirements, you’ll also need to determine the type of VARA license category your business fits into.

The  business categories defined by VARA’s official framework include:

1- Advisory services, which provide financial investment advice on matters related to virtual assets.

2- Broker-dealer services, which are involved in arranging orders of virtual assets.

3- Custodial services, which offer security or guaranteed safekeeping for virtual assets.

4- Exchange services, which operate crypto exchanges or other platforms for users to trade in virtual assets.

5- Lending and borrowing services, which facilitate virtual asset lending and borrowing.

6- Management and investment services, which invest and manage virtual asset portfolios on behalf of their clients.

7- Transfer and settlement services, which cover the transmission, transfer, or settlement of virtual assets from one entity to another.

Finding it hard to navigate VARA requirements and business categories? Our VARA licensing experts can help clear the confusion and guide you through a streamlined application process that suits your unique needs.
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How to Apply for a VARA License in Dubai

Once you’ve established that your crypto business meets the requirements for a VARA license, and the business category it fits into, you can begin the actual process of applying for a license from VARA in Dubai.

Note that while we strongly recommend applying for a VARA license under the guidance of an experienced VARA expert, it still pays to gather the documentation you need and understand the process so there’s no surprises.

Here are the eight steps to apply for a license from VARA in Dubai.

1. Choose Your Zone of Incorporation

The first step in your application process is choosing the zone of incorporation where you want to establish your company. This can be a crypto-friendly freezone such as the Dubai World Trade Centre (DWTC), and Dubai Multi Commodities Centre (DMCC), or the mainland Department of Dubai Economic Development (DED).

If you set up in the Dubai World Trade Centre or Dubai Multi Commodities Centre, you can maintain 100% foreign ownership for your business, gain access to certain tax exemptions, and generally enjoy a more streamlined business setup. On the other hand, your crypto business will have to keep its activities restricted to the free zones or markets outside the UAE, unless you apply for additional licensing.

A DED license, on the other hand, means you can get a no objection certificate from the securities and commodities authority. This means you can provide services throughout the UAE (except for DIFC and ADGM) irrespective of your chosen freezone.

Consulting with VARA license specialists can clarify the nuances of each option and help you find the choice that’s right for you.

2. Reserve the Company Name and Complete the Relevant Documents

Your crypto business will need to be a named entity as part of the application process. Note that your trade or business name can be different from the registered name used for your VARA application.

For the next step, you’ll need to choose a unique name that isn’t already registered in the UAE, and compliant with its naming regulations. Then, submit the naming application to the relevant zone authority you’ve selected to reserve it.

At this stage, it’s also a good idea to start preparing your incorporation documents, like a Memorandum of Association (MoA) and Articles of Association (AoA). You’ll need to set out the shareholder structure, voting rights, and other governance matters clearly in a separate document. You’ll usually require notarization and legalisation for documents pertaining to shareholders, UBOs, directors, parent entities, etc.

3. Finalize Your Office Space

Many free zones have specific office size requirements per visa allocation, and you’ll need to find an office space based on the number of employee visas required to move your business to Dubai.

Research the space requirements for establishing a business in your zone of incorporation, then secure your lease. The documentation proving this lease will be essential at later stages of the VARA licensing process. It’s worth noting that VARA mandates having a closed-door office for all licensed activities.

This step can be a little complex for the uninitiated, so you may want to partner with a corporate services provider who’s familiar with the legal climate of the UAE. At ACX, we provide a range of tailored SCP services to help you get your application done as quickly as possible.

4. Submit the Initial Disclosure Questionnaire (IDQ) to VARA

You’ll receive an IDQ link from the relevant free zone authority once you’ve obtained initial approval from the free zone. 

The Initial Disclosure Questionnaire (IDQ) involves filling out some key information about your business model, the activities you’re going to engage in, your key stakeholders, and financial projections. 

Inaccuracies or sections that are lacking sufficient information can lead to additional questions and significant delays, so take your time with this step and make sure you’re filling in each section thoroughly and accurately to keep the process as efficient as possible.

By collaborating with experienced VARA experts, you’ll be able to make this process much more streamlined, and avoid some of the major stumbling blocks some companies run into.

5. Wait For a Response

Once VARA has received your IDQ application, they’ll carry out a preliminary assessment to understand your business model, ensure that your activity is subject to VARA licensing, and conduct the necessary checks. If there’s any information missing, or there’s certain information that needs further clarification, VARA will contact you explaining the information they need, and how to rectify your IDQ.

Once the IDQ passes the VARA review, the body will send you an invoice for a certain proportion of the application fee, typically 50%. This fee varies depending on the type of business activity you’re applying for, but is always split into one fee for the first business activity on your application, then a smaller one for any additional activity.

6. Receive Your Approval to Incorporate (AtI)

Once you’ve paid your invoice, VARA will grant your application an initial approval. This is just an approval to incorporate your entity in Dubai, and to start preparing and submitting the full application for an operational license from VARA. This doesn’t mean your business can start operating, but does confirm that your business meets VARA’s basic requirements.

Once you have this approval, you can submit it to the authority you’ve selected, such as DED, DMCC, or DWTC. This authority will issue you with a commercial license, which is a commercial license that proves that your entity is incorporated and you are eligible to conduct activities when you receive relevant authorizations from regulators.

7. Complete the Second Part of the Application

Next, VARA will need to see the main set of documents before you get your application over the line. This part of the process is more comprehensive and detailed compared to the first round of documents submitted, and will require you to submit documentation such as:

• Your crypto business’s operational policies and processes relating to compliance, cybersecurity, and governance.

• Appointment of responsible individuals and key personnel, including AML officers, compliance officers, the managing director, and company secretaries.

• Any additional documents VARA may have asked for on a case-by-base basis.

Note that depending on the particulars of your application, VARA officials might request meetings with your senior leadership or other follow-ups as part of finalizing your application.

Once this application is submitted, VARA will work on reviewing the details provided. There’s usually a lot of back-and-forth at this stage while the relevant authorities ask for clarifications, highlight gaps in your application, and ask you to complete them. 

By collaborating with experienced VARA experts, you’ll be able to make this process much more streamlined, and avoid some of the major stumbling blocks some companies run into.

8. Pay the Remaining Application Fees

Once VARA has reviewed your application in full and is satisfied with your compliance, it will issue an invoice for the remaining portion of the application fee.

When this payment is processed, VARA will grant your business a non-operational “In Principal Approval” license with preconditions that must be complied with prior to starting operations, for example opening an approved bank account in the UAE. 

Once these steps are completed, you’ll receive your operational license and achieve full regulatory approval, which is the official green light you need to start carrying out crypto business activities in Dubai.

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What Happens After You Receive Your VARA License

Once your full VARA license has been granted, you’ll be able to start operating in Dubai legally in-line with the business information you shared with the body.

While this is an exciting milestone to hit, there are a few ongoing responsibilities and tasks you’ll need to take care of to maintain your crypto license in Dubai and make the most of your business’s new status.

Some of the key things to prepare for moving forward include:

Compliance obligations, including ongoing AML/CFT monitoring, periodic audits, and making sure your business sticks to Dubai’s customer protection standards.

Paying VARA supervision fees, which can depend on the business category you’re registered as.

Building infrastructure that’s important in the virtual asset space, such as setting up a secure, legal platform that’s easily accessible to customers and clients in Dubai.

Hiring consultants or permanent legal staff, which will give you the benefit of localised regulatory knowledge and Emirati business conventions that you may not be used to. Roles you may want to consider hiring for include Fincrime, MLRO, and customer support specialists.

Engaging with VARA authorities in order to keep in-step with the changing regulatory landscape and minimize the work on your end needed for compliance audits.

Committing to ongoing education to keep your senior leadership and wider workforce informed on the business’s obligations under UAE crypto regulation.

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Simplify VARA Licensing With ACX

Navigating the requirements of getting a license from VARA in Dubai is no easy task, but once you’re able to establish your crypto business in Dubai legally, there’s no limit to the opportunities this flexible and forward-thinking market can offer.

We hope this guide has helped you gain a better understanding of VARA licensing requirements and your next steps for moving your business to Dubai.

For more support with your VARA license, contact us today for bespoke, expert advice and licensing and compliance services, company incorporation, and more.

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VARA Licensing FAQs

What is a VARA License, and why do I need it?

A VARA license provides a vital framework for building trust with investors and customers and demonstrating adherence to strict regulatory standards. This credibility is critical for operating legally in Dubai, attracting capital, and forging strategic partnerships. 

Moreover, the license grants access to Dubai's rapidly expanding digital asset market, and also mitigates legal risks for your business while ensuring operational clarity, and allows you to fully participate in the UAE's progressive virtual asset ecosystem.

Who needs a VARA license in Dubai?

Any business dealing with virtual assets, including cryptocurrency exchanges broker-dealers, NFT platforms, crypto advisory firms, and custodial services, must obtain a VARA license before they start operating in Dubai.

How much does a VARA license cost?

VARA license fees vary depending on the details of your company’s needs, starting at 50,000 AED ($13,613 USD) for the first business activity on your application, and an additional 25,000 AED ($6,086 USD) for each additional activity.

Additional costs may include compliance audits, office leasing, and VARA supervision fees. To get an accurate budget, we recommend discussing the process with your financial advisors and a trusted VARA consultant.

Can I operate internationally with a VARA license?

Yes, it’s possible to operate internationally with a VARA license, but with restrictions. Free zone-based companies can only operate within the free zone and internationally, unless additional licensing is obtained for UAE-wide business activities. Mainland (DED) licenses allow operations across Dubai and the UAE. With a full VARA license, you can get a no objection certificate from the securities and commodities authority, irrespective of the freezone selected.

Note that if the jurisdiction where you want to operate has its own crypto or virtual asset regulations, you’ll need to comply with those regulations as well.

How long does it take to get a VARA license?

The timeframe varies depending on the completeness of your documentation and compliance with VARA’s requirements. The process typically takes anywhere from a few months to a year, and can be longer if there are errors or missing information in the application. For the fastest process possible, we recommend enlisting the help of a professional VARA consultant.

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