VARA Crypto License in Dubai
If your company specializes in selling, safekeeping, exchanging, or issuing digital assets, make sure to obtain your VARA license in Dubai. This guide will help you gain a better understanding of the benefits and practical steps of getting your licensing in the Emirates, its eligibility requirements, and the costs associated with it.
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Benefits of Obtaining a VARA Crypto License
- First and foremost, the VARA crypto license is known for its strong reputation in the global market. Indeed, it is a trusted and credible authority among investors due to its clear regulatory framework.
- The VARA licensing ensures that your business’s digital-asset-related activities are carried out lawfully and in compliance with the local legal requirements. It will result in building your venture’s trustworthy reputation among the investors in the growing cryptocurrency community.
- With this type of licensing, you will access the Emirates’ market, which remains one of the most prominent and thriving global crypto hubs. As a result, the broader your market network, the more possibilities there are for your venture to grow.
How to Apply for a VARA Crypto License
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Eligibility Requirements
Whether you are already a fintech business owner or are only planning to open your venture, getting a crypto license in Dubai will significantly enhance your access to both the global and the local crypto markets. This licensing safeguards your venture’s asset-related operations and promotes security and compliance with the laws and regulations.
In order to get your VARA license, you will need to have a physical office space in Dubai and operate as a legal entity founded in Dubai or one of its free zones (except for the DIFC). As well, your business must meet the standard for the minimum share capital, which varies depending on the type of crypto activities of your venture. Below is a general guide to current share capital requirements:
- Advisory Services – $27,300 (AED 100,000)
- Broker-Dealer Services – $109,000 (AED 400,000) or fixed annual overheads (15%), depending on whichever is higher
- Custody Services – $163,500 (AED 600,000) or fixed annual overheads (25%)
- Exchange Services – $409,000 (AED 1,500,000) or fixed annual overheads (25%)
- Lending and Borrowing Services – $136,300 (AED 500,000) or fixed annual overheads (25%)
- Virtual Asset Management and Investment Services – $136,300 (AED 500,000) or fixed annual overheads (25%)
- Settlement and VA Transfer Services – $136,300 (AED 500,000) or fixed annual overheads (25%)
These fees must be paid fully and maintained during the entire validity period of your license. Keep in mind that VARA may require higher capital according to the scale and nature of your venture’s activities.
Another key requirement that the venture must follow in order to keep its licensing is maintaining the Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. In the process of application, you will have to present the detailed plan of your business’s activities, the abovementioned protocols, and clear risk-management procedures.
In addition, to meet the regulatory governance requirements, your company must appoint both a Compliance Officer (CO) and a Money Laundering Reporting Officer (MLRO). The CO must be a resident person with either an Emirates ID or an Emirati passport, have at least 5 years of compliance experience, and act as a full-time employee reporting directly to the Board. The MLRO, who may also act as CO if there’s no conflict of interest, must have at least 2 years of AML experience and is responsible for implementing internal AML policies and reporting suspicious transactions. Both roles must be approved by VARA and filled by individuals deemed “Fit and Proper” under the authority’s standards.
Application Steps
If you are planning to obtain the VARA crypto license in Dubai, make sure to follow the general structured guidelines:
- First of all, select a particular jurisdiction that aligns with your business goals.
- The second step is receiving legal consultation. Since the application process involves numerous details and is highly impactful to the success of your business’s growth in the Emirates, it is important that you receive expert counsel. They will ensure that your company meets all the regulatory and compliance requirements.
- Next, our team will assist you by preparing the full package of documents required for submission. This includes working on your detailed business plan, internal security measures, financial projections, personal documentation, and the necessary AML (Anti-Money Laundering) and KYC (Know Your Customer) procedures tailored to your business model..
- Once your documentation is in order, the licensing process begins with an Initial Disclosure Questionnaire (IDQ) submitted to either the Dubai Department of Economy & Tourism (DET) or a relevant Free Zone Authority. At this stage, our team will coordinate the preparation and submission of your business plan, details of your beneficial ownership and senior management, and all supporting documentation required by the regulator. Also, to initiate the review process, you will have to pay an initial part of the application cost. Generally, it varies around 50% of the fee.
- Upon successful review, you will receive an Approval to Incorporate (ATI). This enables you to proceed with company incorporation and complete operational steps such as leasing office space and onboarding employees. Please note, however, that your business is not yet authorized to carry out any Virtual Asset activities at this stage. VARA retains full discretion to decline the ATI if your business falls outside its regulatory perimeter or does not meet its standards.
- Once the ATI is granted, your company becomes eligible to apply for a full VASP License. In this second stage, we will prepare and submit the complete licensing application in line with the guidance provided by VARA. The review may include written feedback, document resubmissions, and meetings or interviews with your key personnel.
- After meeting all licensing requirements, you will pay the remaining balance of the application fee along with the first year’s supervision fee. If VARA is satisfied with your submission, your company will be granted a VASP license, potentially subject to operational conditions or restrictions. As before, final approval is at VARA’s sole discretion, and the license may be denied if the firm fails to meet its regulatory expectations.
Costs Associated with VARA License
As mentioned earlier, the price for the licensing varies depending on the jurisdiction you select and the specific digital-asset-related activities of your venture. You can learn more about the particular expenses associated with obtaining your VARA licensing below.
Breakdown of VARA License Costs
As you plan to apply for your VARA license, it is important to know how much it is going to cost you. There are several key components of the overall price for this service. They include the basic application expenses, implementation of security measures, and consulting and legal costs. Not to mention, your application is not processed until you proceed with the necessary payments.
The core VARA licensing and supervision fees are provided for in Schedule 2 of the Virtual Assets and Related Activities Regulations 2023 and are as follows:
- Application Fee. The base application fee depends on the type of Virtual Asset (VA) Activity:
- Advisory Services/Transfer and Settlement Services: AED 40,000 (9,574.65 EUR) each.
- Exchange/ Custody/ Broker-Dealer/ Lending/ Investment Services: AED 100,000 (23,936.62 EUR ) each.
- License Extension Fee. If you’re applying for more than one VA Activity, an additional License Extension Fee applies to each added activity. This fee is 50% of the lower applicable License Application Fee(s).
- Annual Supervision Fee. VASPs are also subject to an annual supervision fee for each licensed VA Activity.
These estimated costs are those published by VARA and apply to all zones in Dubai, except the DIFC.
Ongoing Fees and Renewals
To maintain your VARA license in good standing, annual supervision fees are required for each licensed Virtual Asset (VA) Activity. These fees are payable in advance and are outlined in VARA’s official fee schedule:
- Advisory Services/Transfer and Settlement Services: AED 80,000 (19,149.30 EUR) each.
- Exchange/ Custody/ Broker-Dealer/ Lending/ Investment Services: AED 200,000 (47,873.24 EUR) each.
Additionally, VARA reserves the right to impose further supervisory fees at its sole discretion—for example, in cases where enhanced oversight is necessary or complaints are filed against a licensed entity. These discretionary fees are determined by VARA based on specific circumstances.
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FAQ
What are the requirements to obtain a VARA crypto license in Dubai?
In order to run your business in Dubai lawfully, you need to receive a license in accordance with the current regulations. The procedure for obtaining this licensing is explained earlier in the guide and includes several important steps. Overall, the key VARA requirements include submitting the detailed plan of your venture’s digital-asset activities, implementing risk-management measures, maintaining a registered local presence in Dubai, meeting the minimum share capital thresholds set by VARA for each type of licensed activity and complying with the AML, KYC, and other local regulatory standards. If you need any additional help with your VARA licensing in the Emirates, our expert team will be happy to assist you.
How much does the VARA crypto license cost in Dubai?
Depending on the type of activities related to digital assets in your venture, your VARA license cost may vary. VARA application fee starts from AED 40,000 (9,574.65 EUR), excluding the further costs associated with the legal and consulting fees and the annual renewal costs, as well as the price for company incorporation itself. The Dubai VARA license cost includes the application price as well as the costs associated with the implementation of security measures and consulting. Make sure to contact our legal experts for the most accurate cost range for your venture.
How long does it take to process the VARA license application?
If you are planning to apply for the licensing, be ready that this journey is going to take time as it involves several important steps. While some applications progress faster than others, there is no guaranteed timeframe, as the precise duration of the process mainly depends on how quickly the VARA authority reviews your documentation. It’s important to ensure full compliance with all requirements to avoid unnecessary delays.
