A VARA licence in Dubai is required before a business conducts regulated virtual asset activities in or from the emirate, excluding DIFC. The permissions depend on what the business will do: advising clients, arranging trades, operating an exchange and holding client assets involve different requirements.
Before incorporating, establish which activities need authorisation, how the company will operate and what funding it will need. The application fee is one part of that decision. Capital, staff, systems and the cost of operating through the application period also need to be planned.
Does your business need a VARA licence?
The Virtual Assets Regulatory Authority, or VARA, regulates virtual asset activities across Dubai mainland and its free zones, excluding the Dubai International Financial Centre. DIFC has its own regulator, the Dubai Financial Services Authority, or DFSA.
A commercial trade licence establishes the business. It does not, by itself, authorise regulated virtual asset services. A company must hold permission for each regulated activity it intends to conduct.
Start with three questions:
- What will the business do? Describe the services, how transactions work and how the company earns revenue.
- Whose assets will it use or control? Distinguish the company’s own portfolio from client money and virtual assets.
- Where will it operate and serve clients? Consider the operating location, distribution and marketing, alongside the incorporation address.
For example, a business giving investment recommendations on virtual assets has a different licensing scope from a platform executing client orders. A software company does not require a VASP licence simply because its technology uses blockchain, but its actual services must be assessed.
Use VARA’s licensed activities and licence application guidance as the starting point.
Proprietary trading follows a different route
Genuine proprietary trading uses the company’s own funds without providing services to clients. VARA’s published guidance provides for a No Objection Certificate, or NOC, obtained through the commercial licensor.
The regulations require registration when an entity actively invests its own virtual asset portfolio at or above USD 250 million equivalent during any rolling 30-calendar-day period. Registration must take place before reaching that volume or no later than three working days afterwards. Registration does not authorise client services.
Providing liquidity or trading with counterparties can require closer analysis. Using the company’s own funds does not, on its own, establish that the model is unregulated.
Sources: VARA licensing requirements, including proprietary-trader registration and NOC guidance.
Which VARA activity fits your business model?
VARA’s framework covers the following activity categories. These descriptions help orient the decision; the regulatory definitions and proposed operating model determine the application scope.
One business model can involve several activities. A platform that executes orders and holds client assets needs to assess both functions. Each permission brings its own obligations, even where several activities are included in one VASP licence.
Custody requires particular attention to the company structure. The rulebook requires a separate legal entity from group businesses conducting other VA activities. There is a limited exception allowing a custody provider to seek Transfer and Settlement permission, subject to VARA’s conditions. A division within the same company is not a general substitute for this separation.
Sources: VARA activity rulebooks and custody segregation requirements.
Token issuance needs its own classification
A token’s rights, transferability and underlying assets affect its regulatory treatment. Calling it an NFT or utility token does not settle the question.
Category 1 issuance requires a VARA licence. For Category 2, the Issuance Rulebook specifies that the issuer does not need a VARA licence, but placement and distribution must be through or by a Licensed Distributor. VARA’s April 2026 guidance illustrates this distinction and explains that the distributor has its own due diligence and submission obligations.
For a Category 2 project, confirm the current filing and disclosure steps before launch. The issuer’s classification and the distributor’s obligations are separate questions. The business needs to establish who will issue the token, who will distribute it and what each party must complete before placement begins.
Sources: issuance categories, Category 2 issuance example and Licensed Distributor example.
What are the VARA application and annual fees?
The published fees below apply to a single regulated activity. They exclude company establishment, professional fees and operating costs.
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How much paid-up capital does a VARA-licensed business need?
The requirement depends on the activity and, for several categories, fixed annual overheads. A published floor may therefore be lower than the amount the business must actually maintain.
The qualifying custody model uses a VARA-licensed custodian or an alternative approved during licensing. Multi-activity capital requirements must be calculated for each activity under the rulebook’s allocation rules.
Source: Company Rulebook: paid-up capital.
Capital, liquidity and client assets are separate obligations
Paid-up capital must be maintained in the prescribed form: a UAE bank trust account naming VARA as beneficiary, an eligible surety bond, or another method VARA specifies when granting the licence. Do not assume it is freely available to pay salaries or suppliers.
Separately, net liquid assets must be at least 1.2 times monthly operating expenses. This measures qualifying liquid assets after current liabilities. It is not the formula for paid-up capital.
Insurance requirements also apply. Where the business owes virtual assets to clients, the reserve-asset rules require one-to-one backing in the same virtual asset. Client assets are not funding for the company’s operating budget.
Source: Company Rulebook: capital and prudential requirements.
What should the first-year funding budget include?
An Advisory applicant’s published application and annual supervision fees total AED 120,000. Its paid-up capital requirement is AED 100,000. These figures serve different purposes and do not represent the full amount needed to establish and run the business.
Build the budget around the actual operating model:
Use supplier quotes and a hiring plan to put numbers against these items. Record when each expense starts. Some work and costs arise before authorisation, while other commitments depend on the licence conditions and launch date.
Then test the cash-flow forecast against capital and liquidity obligations throughout the period. Avoid counting the same available funds twice. A slower application or launch should not leave the business unable to maintain its required balances.
This approach produces a funding requirement tied to the business, rather than a generic “crypto licence package” price.
How does the VARA application process work?
For new firms, VARA describes two stages: Approval to Incorporate and the full VASP licence application.
Stage 1:
Approval to Incorporate
Submit the Initial Disclosure Questionnaire through Dubai Economy and Tourism for mainland applications, or the relevant Dubai free zone authority. Supporting information includes the business plan, beneficial ownership and senior management details. VARA’s guidance describes an initial payment typically equal to 50% of the application fee.
Approval to Incorporate allows the business to finalise incorporation and operational setup. It does not permit regulated virtual asset activities.
Stage 2:
VASP licence application
Compare the relevant management permissions, fund structure, proposed assets, client classifications and custody model in each jurisdiction. The decision should reflect the intended business and counterparties. An existing regulated entity may need permission changes; a new entity needs the relevant authorisation.
A stablecoin or payment platform
Following that approval, submit the detailed materials VARA requests. These address the proposed business, people, governance, controls and systems. Review can involve further documents, meetings and interviews.
The remaining application fee and first-year supervision fees are payable as part of the process. A licence can include operational conditions; the launch plan must reflect them.
Source: VARA’s two-stage application process.
What should the application file explain?
The documents should give a consistent account of the business. The ownership chart, business plan, forecasts, controls and technology should describe the same activities and operating model.
Prepare to explain:
- Who owns and controls the company, including its ultimate beneficial owners.
- Where the funding comes from and how the business will remain funded.
- Who makes decisions and carries responsibility for compliance.
- How clients are assessed and transactions monitored.
- How money and virtual assets move through the business.
- How systems, access, cybersecurity and outsourced services are controlled.
All applicants must address the four compulsory rulebooks: Company, Compliance and Risk Management, Technology and Information, and Market Conduct. Activity-specific rulebooks add further obligations.
Sources: VARA’s application documentation and compulsory rulebooks.
Who are the Responsible Individuals?
VARA requires two sufficiently senior Responsible Individuals who are accountable for the VASP’s compliance with its legal and regulatory obligations. Each must be a full-time employee, a Fit and Proper Person, a UAE resident or UAE passport holder, and approved by VARA during licensing.
These are responsibilities assigned to qualifying people within the organisation. The requirement does not automatically mean recruiting two additional compliance officers. The business must assess who can hold the responsibilities, the other roles it needs and any restrictions on combining duties.
Budget for the complete organisation. Two Responsible Individuals do not, by themselves, establish that the business has sufficient staff to operate.
Which company structure and premises should you use?
The Company Rulebook requires a legal entity in Dubai in a form approved by a Dubai commercial licensing authority. Confirm the proposed legal form and activity with the relevant authority and VARA before committing to incorporation.
The ownership chain must be clear, including controlling entities, ultimate beneficial owners and decision-making powers. A holding company or overseas parent should be explained consistently across the application and banking documents.
Mainland and free zone options can differ in commercial licence charges, premises, visas and administration. Choosing a free zone does not remove a VARA licensing obligation. Confirm that the proposed activities, legal form and premises are acceptable before signing agreements.
Prepare banking alongside the application
Build a banking file that explains the company’s services, ownership, funding, expected transactions and regulatory position. Identify the account functions needed for operating funds, regulatory capital and, where applicable, client money.
Begin those discussions early enough to understand the bank’s requirements and the documents it will need at each stage. The banking file and VARA application should give the same account of how the business will operate.
See GCG’s UAE business bank account guide for the wider documentation and banking process.
How long does a VARA licence take?
VARA’s published two-stage guidance does not give a fixed processing deadline. The schedule depends on the activities sought, the completeness of the submission, regulatory questions and the work needed to satisfy the proposed conditions.
Build the plan around milestones: activity scope, initial submission, incorporation approval, detailed application, review responses and readiness to operate. Allow for recruiting, banking and systems preparation alongside the application.
A timeline estimate should explain what is already complete and which steps remain. It should not be presented as a guaranteed approval date.
Can you market before receiving the licence?
Approval to Incorporate does not give unrestricted permission to promote regulated services.
Under VARA’s 2024 Marketing Regulations, marketing of VA activities in or targeting the UAE generally must be carried out by a VASP licensed for the relevant activity, or on its behalf with its approval. Defined exceptions and further requirements apply.
Check website claims, campaigns and launch announcements before publication. Do not present an application, an incorporation approval or a proprietary-trading NOC as a VASP licence.
Source: VARA Marketing Regulations 2024.
VARA, DIFC, ADGM or a federal route?
The location and services both matter when choosing a UAE route.
A business planning to serve the wider UAE should establish the applicable registration, distribution and payment rules. The earlier SCA–VARA cooperation agreement described default federal registration for VARA licensees serving the wider UAE. Confirm how the current CMA framework and that coordination mechanism apply to the proposed business, rather than assuming either unrestricted coverage or two full licences in every case.
Sources: DFSA Crypto Token framework, ADGM FSRA, federal coordination announcement and CBUAE Payment Token Services Regulation.
How GCG supports your VARA application
GCG handles Dubai company establishment and VARA application support as one engagement. We begin with what the business will do, who it will serve and whether it will hold or control client assets.
From there, we define the company structure, application work, operating requirements and responsibilities. The agreed scope sets out which materials GCG prepares, what the business needs to provide and where specialist input is required.
GCG brings the company, legal and financial parts of the project together. Professional fees are set out separately from regulator and third-party charges. VARA makes the licensing decision.
Tell us what you are building, whether the company is already established and how far you have progressed. We can then discuss the route and scope the next steps.
