VARA paid-up capital requirements

Paid-up capital is one of the first hard numbers any prospective Dubai VASP needs, and one of the most commonly misread. The headline figures look modest, but the way VARA frames them — as the higher of a fixed amount or a percentage of your cost base, per activity — means the real requirement is often well above the published minimum. This guide sets out the rules in Rule VI.B of the VARA Company Rulebook and what they mean in practice.

What "paid-up capital" means under VARA

Paid-up capital is capital the VASP has actually contributed and committed to the business, ring-fenced for VARA's benefit. It is not a fee and it is not spent — it is a permanent prudential cushion that must be in place before licensing and maintained for as long as the licence is held. It is distinct from, and sits alongside, the ongoing Net Liquid Asset (NLA) requirement; a VASP must satisfy both.

The requirements, activity by activity

Under Rule VI.B.1, the minimum paid-up capital for each VARA virtual-asset activity is as follows. Where two figures appear, the requirement is the higher of the two:

Two patterns are worth noting. First, custody-heavy and exchange activities carry the highest floors, reflecting the client-asset risk they hold. Second, the custody discount: broker-dealer, exchange and management/investment all drop to a lower fixed floor and a 15% (rather than 25%) overheads percentage where custody is performed by a VARA-licensed custodian or a custody arrangement approved by VARA. For many business models, outsourcing custody to a licensed custodian materially reduces the capital you must lock up.

The "higher of" calculation — why the headline number is rarely the answer

For every activity except Advisory, the requirement is expressed as the higher of a fixed AED amount or a percentage of fixed annual overheads. Fixed annual overheads are, broadly, your recurring annual operating costs — salaries, rent, technology, professional fees and the like — stripped of genuinely variable expenses.

The practical consequence: the fixed AED figure is a floor, not the answer. A lean start-up may sit at the floor, but a VASP with a substantial cost base will be driven by the percentage. For example, an exchange (without licensed custody) with AED 8 million of fixed annual overheads would need AED 2 million — 25% of overheads — not the AED 1.5 million headline. Capital therefore scales with the size and cost of the operation, and it moves as your overheads move.

Multiple activities — capital is additive, not shared

A common and expensive misconception is that a single capital pool covers a multi-licence VASP. Rule VI.B.2 is explicit: where a VASP is licensed for more than one activity, it must hold the required paid-up capital for each activity separately, calculate fixed annual overheads per activity, and ensure all paid-up capital is "mutually exclusive and collectively exhaustive." In plain terms, the same dirham cannot do double duty across two activities — the requirements stack.

How the capital must be held

It is not enough to have the capital on your balance sheet. Under Rule VI.B.3, paid-up capital must be held in one of the following forms:

• a trust account with a licensed bank in the UAE, with VARA stated as the beneficiary;
• a surety bond furnished by a surety company authorised in the UAE, with no end date and naming VARA as beneficiary; or
• any other manner that VARA may specify.

The trust-account and surety-bond mechanics matter at the application stage: arranging a UAE trust account with VARA as beneficiary, or an open-ended surety bond, takes lead time and banking relationships that are best started early.

Keeping it in place — monthly reconciliation

Paid-up capital is a continuing obligation. VARA requires VASPs to reconcile paid-up capital on a monthly basis, and because the requirement is partly a function of fixed annual overheads, it must be revisited as the business grows. A VASP whose overheads have risen since licensing can quietly fall below requirement without a single deliberate decision — which is exactly the kind of drift VARA's ongoing supervision is designed to catch.

Where it fits in the wider prudential picture

Paid-up capital is one pillar of VARA's prudential regime, not the whole of it. It works together with the Net Liquid Asset requirement, the firm's risk and governance framework, and the broader obligations every licensee carries — including a robust AML/CFT Business Risk Assessment. Capital adequacy is assessed in the round, and a thin capital position is often read as a signal of wider weakness.

What we do

Neo Legal models paid-up capital across single and multi-activity VARA applications, structures the custody arrangements that unlock the lower floors, and helps arrange the trust-account or surety-bond mechanics VARA requires — so the capital question is answered correctly before it becomes a conditions-of-licence problem. Our team includes counsel who have worked inside the VARA framework.

This article is general information on VARA's paid-up capital requirements as at June 2026 and is not legal or financial advice. Figures are drawn from Rule VI.B of the VARA Company Rulebook; always confirm the current rulebook position for your specific activities. Defined terms have the meanings given in the VARA rulebooks.