A desk that buys from or sells to clients, or arranges their trades, is conducting Broker-Dealer Services under VARA and needs a licence: AED 100,000 application fee, AED 200,000 annual supervision, and paid-up capital of AED 400,000 (with a VARA-licensed custodian) or AED 600,000 otherwise, or the percentage-of-overheads alternative if higher. A desk trading purely its own book is not licensable but needs a VARA No Objection Certificate, with mandatory registration at USD 250 million equivalent of virtual asset investment in any rolling 30-day period.
The classification that decides everything
Three desks that look identical from a Telegram chat are three different regulatory animals. A desk that quotes clients two-way prices and settles against them is dealing as principal with clients: Broker-Dealer Services. A desk that works client orders against exchanges or other desks is dealing as agent: Broker-Dealer Services. A desk that trades only its own balance sheet, with no client on the other side of any trade, is proprietary trading: outside the eight licensed activities, but inside VARA's supervision perimeter through the No Objection Certificate regime, with mandatory registration once virtual asset investment reaches USD 250 million equivalent in any rolling 30-calendar-day period. The classification question is factual, and it is asked trade by trade: a prop desk that starts filling friends' orders has become an unlicensed broker-dealer.
The VARA Broker-Dealer licence
The numbers: application fee AED 100,000, annual supervision AED 200,000, and paid-up capital under the Company Rulebook of AED 400,000 or 15 percent of fixed annual overheads (whichever is higher) where client assets sit with a VARA-licensed custodian, rising to AED 600,000 or 25 percent where they do not. Add net liquid assets of at least 1.2 times monthly operating expenses, insurance, Dubai office space, two Responsible Individuals, a UAE-resident Compliance Officer and an MLRO. The custodian decision matters twice: it lowers the capital tier, and it removes the need for a separate custody entity of your own. Full cost detail is in our VARA licence cost guide.
Client classification and conduct
VARA's Market Conduct Rulebook distinguishes Qualified Investors (individuals with virtual asset knowledge and net assets of AED 3.5 million, with a 50 percent haircut on virtual asset holdings and the primary residence excluded, or income of AED 700,000 plus) from Retail clients, who attract materially heavier protections. Most OTC desks build for Qualified Investor and institutional flow only, and the onboarding stack should enforce that boundary rather than assume it. Anonymity-enhanced cryptocurrencies are prohibited outright.
The venues compared
VARA is the natural home for a Dubai-based desk serving regional flow, and a VARA licence has historically carried default registration with the federal regulator to serve the wider UAE. The ADGM offers FSRA authorisation for dealing as matched or unmatched principal or as agent, attractive for desks wanting a financial free zone environment and common law courts. The federal CMA framework (issued April 2026) licenses Dealing as Principal and Dealing as Agent onshore; its published capital figures conflict across summaries, so budget only against the Prudential Requirements module itself. Where a desk settles in dirham-pegged payment tokens, the CBUAE's Payment Token Services Regulation adds a further layer. Choosing the venue is a clients-and-product decision, not a fee comparison: see our four-regulator comparison.
Desks already trading
Dubai has active OTC flow that predates the regime, and VARA's enforcement toolkit for unlicensed activity is severe: Article 17 of Dubai Law No. 4 of 2022 makes unlicensed activity an offence, with penalties for entities reaching the higher of AED 50 million, 15 percent of revenue or 300 percent of gains. There is a remediation path, and in Neo Legal's experience early voluntary engagement produces materially better outcomes than detection. The first step is a perimeter opinion on what the desk actually does; the second is choosing between licensing, restructuring to genuine prop, or relocating the client-facing leg.
This article is general information as at September 2026 and is not legal advice. Figures are as published in the VARA Regulations and Rulebooks at the review date; CMA capital figures were unconfirmed at the review date and should be checked against the Prudential Requirements module.
