Obtaining a VARA license is the gateway to legally operating a virtual asset business in Dubai. The process is structured, transparent, and designed to ensure only businesses with strong governance, operational readiness, and compliance infrastructure can serve Dubai's market.
Submit the Initial Disclosure Questionnaire (IDQ) through the relevant Free Zone Authority or Dubai Economy & Tourism (DET). The IDQ must be accompanied by a comprehensive Regulatory Business Plan detailing: virtual asset activities to be conducted, governance structure, risk management framework, AML/CFT policies and procedures, technology architecture and cybersecurity measures, business continuity and disaster recovery plans, and financial projections with capital adequacy demonstrations.
After receiving Initial Approval, complete the remaining requirements: hire and accredit key personnel (CEO, CFO, Compliance Officer, and Money Laundering Reporting Officer must pass VARA's eligibility review), finalize operational systems and technology infrastructure, pass cybersecurity and technology assessments, demonstrate adequate capital reserves, and implement client asset segregation procedures.
| Activity | Min. Capital | Auth. Fee |
|---|---|---|
| VA Exchange Services | AED 15M (~$4.1M) | AED 100,000 |
| Custody Services | AED 10M (~$2.7M) | AED 75,000 |
| Broker-Dealer Services | AED 5M (~$1.4M) | AED 75,000 |
| Payment/Transfer Services | AED 2M (~$545K) | AED 40,000 |
| Advisory Services | AED 1M (~$272K) | AED 40,000 |
VARA requires formal accreditation of specific roles: the CEO and CFO must have 5-10 years of experience in financial or technology industries, clean criminal records, and pass VARA's eligibility review. The Money Laundering Reporting Officer (MLRO) must hold CAMS (Certified Anti-Money Laundering Specialist) or equivalent qualification. Senior management faces personal enforcement liability for non-compliance.
The full licensing process typically takes four to seven months from IDQ submission to Full VASP License. Initial consultations with VARA are free. Many businesses use a two-track approach: establish a Free Zone company (DMCC, DAFZA, DWTC, IFZA) for operational setup while pursuing VARA licensing in parallel. VARA's sandbox program allows testing with live users before committing to full licensing.
Sources: VARA official, Epic Corporate Services, NeoS Legal, Legarithm. Not legal advice. See Disclaimer.
VARA's sandbox program offers an alternative entry point for businesses that want to test their services before committing to full licensing. Sandbox participants can operate with live users under controlled conditions, with reduced capital requirements and supervised operations. This de-risks the licensing process for both the applicant and VARA. Many successful VASPs — including some major exchanges — used the sandbox as their initial Dubai entry point before scaling to full licensing.
Based on industry analysis, the most common reasons for VARA licensing delays or rejections include: incomplete AML/CFT frameworks that don't meet VARA's detailed requirements, insufficiently qualified personnel (particularly MLROs lacking CAMS certification), technology infrastructure that fails cybersecurity assessments, inadequate business continuity planning, and unrealistic financial projections. Companies that invest in comprehensive pre-application preparation — ideally with UAE-specialized legal counsel — typically complete the process within four to five months rather than the maximum seven.
Receiving a VARA license is not the end of the regulatory journey. Licensed VASPs face ongoing obligations including: annual compliance reviews, regular technology audits, continuous AML/CFT monitoring, quarterly reporting to VARA, maintaining minimum capital adequacy ratios, and ensuring all personnel accreditations remain current. VASPs remain subject to VARA regulations for 10 years after ceasing operations, ensuring long-term accountability.
Beyond VARA's authorization fees (AED 40,000-100,000), companies should budget for: legal advisory fees ($50,000-200,000 depending on complexity), compliance infrastructure (AML/CFT systems, monitoring tools: $30,000-100,000 annually), personnel costs (CAMS-certified MLRO salary: $80,000-150,000, plus compliance team), technology assessment and remediation, office space and Free Zone setup (DMCC from AED 34,000), and ongoing regulatory reporting costs. Total first-year investment for a mid-sized exchange operation typically ranges from $500,000 to $2 million, with annual recurring costs of $200,000-500,000 for compliance, technology, and regulatory fees. These costs are substantial but compare favorably to banking licenses and create a defensible competitive moat against unlicensed operators.
A VARA license increasingly carries international recognition value beyond the UAE. Regulators in Bahrain, Oman, and other GCC jurisdictions view VARA licensing as evidence of compliance maturity. European regulators under MiCA recognize VARA's framework as substantially equivalent for cooperation purposes. For companies planning multi-jurisdictional expansion, a VARA license provides a credible regulatory foundation that can accelerate licensing applications in other jurisdictions. The September 2024 SCA-VARA cooperation agreement further enhances this portability within the UAE — a single VARA license now provides automatic SCA registration, enabling seamless operations across all seven emirates without duplicate licensing requirements.
Companies preparing VARA applications should ensure they have: a comprehensive regulatory business plan with 3-year financial projections, documented AML/CFT policies and procedures, identified and pre-screened key personnel for CAMS and other required certifications, completed technology infrastructure assessments including cybersecurity penetration testing, established Free Zone company formation and banking relationships, engaged UAE-specialized legal counsel experienced in VARA submissions, and allocated sufficient capital reserves to meet both minimum requirements and operational needs during the licensing period.
Market conditions in the virtual asset space evolve rapidly. Companies that delay licensing risk missing competitive windows as new entrants secure VARA authorization and establish market positions. The four-to-seven-month licensing timeline means that businesses should begin the process well before their planned launch date, accounting for potential delays in personnel accreditation, technology assessment remediation, and capital verification. Early engagement with VARA through free initial consultations can identify potential obstacles before they impact timelines.