Get Your VARA License in Dubai

Launch Your Crypto Business with a VARA License in Dubai – 2025 Requirements & Process

Dubai is leading the world in digital asset regulation, offering a clear and robust framework for Virtual Asset Service Providers (VASPs) under the Virtual Assets Regulatory Authority (VARA). Whether you’re building an exchange, wallet service, or advisory platform, obtaining a VARA license is now essential for operating virtual assets in or targeting Dubai. At Neo Legal, we guide you through every step of the VARA licensing process from entity setup to regulatory compliance and risk frameworks ensuring your business meets the latest 2025 requirements under Law No. 4 of 2022 and the updated Virtual Assets and Related Activities Regulations.

Why VARA Licensing Matters in 2025

Dubai’s Regulatory Evolution

Dubai has emerged as a global leader in the regulation of virtual assets. With the enactment of Law No. 4 of 2022 Regulating Virtual Assets in the Emirate of Dubai (“Dubai VA Law”), the Dubai Virtual Assets Regulatory Authority (VARA) was established to provide a dedicated framework for overseeing all Virtual Asset Service Providers (VASPs) operating in or targeting the Emirate.

A Unified Licensing Framework for VASPs

In 2023, VARA implemented the Virtual Assets and Related Activities Regulations, which set out a full licensing regime for VASPs. This was further strengthened in 2024–2025 by comprehensive Rulebooks covering company structure, compliance, risk management, technology, and conduct obligations. As of 1 October 2024, the new Marketing Regulations prohibit all marketing of VA Activities in or targeting Dubai unless conducted by, or on behalf of, a VARA-licensed VASP.

Strategic Importance of Licensing

A VARA license is no longer optional for serious operators. Whether you are launching an exchange, a DeFi platform, custody solution, or an NFT marketplace, licensing is a legal requirement — not just a strategic advantage. VARA licensing ensures operational legitimacy, access to institutional partners, marketing privileges, and legal protection against fines or enforcement action.

Global Standards, Local Execution

VARA’s framework is designed to align with FATF standards, international best practices, and risk-based regulation, while providing clarity tailored to Dubai’s virtual asset market. VARA’s 2025 Rulebooks require a high standard of corporate governance, financial integrity, and consumer protection, enforced through clear licensing conditions, audits, and ongoing compliance assessments.

Who Needs a VARA License or Approval in Dubai?

If your business conducts any activity involving Virtual Assets (VAs) in or targeting the Emirate of Dubai, you are required to either obtain a VARA license or receive formal approval, such as a No Objection Certificate (NOC), from the Dubai Virtual Assets Regulatory Authority (VARA).

This includes entities that:

Operate in Dubai (onshore or in designated free zones)

Target Dubai residents with VA-related products, services, or marketing

List, trade, or develop VA platforms or instruments accessible from the UAE

Per the Virtual Assets and Related Activities Regulations 2023, supported by the 2024–2025 Rulebooks and the Marketing Regulations (effective 1 October 2024), the following activities are either licensable or subject to formal VARA oversight through notification or pre-approval.

VARA-Regulated Virtual Asset Activities

Any entity engaged in the following core VA Activities must obtain a full VARA license:

VA Exchange Services

Entities that wish to operate VA Exchange Services must hold a specific exchange license. This enables them to run centralized or decentralized trading platforms, host order books, list and match trades involving spot virtual assets, stablecoins, and tokenized instruments, and facilitate derivatives such as futures, options, and perpetual contracts, subject to leverage restrictions and client classification rules. Exchanges may also incorporate wallet integration and staking mechanisms, provided these align with client risk controls and custody segregation standards.

VA Broker-Dealer Services

For businesses acting as intermediaries, the Broker-Dealer License permits over-the-counter (OTC) trading, agency-based execution, proprietary market-making, and distribution of certain structured products. Broker-dealers must implement client order handling protocols, best execution policies, and maintain clear conflicts of interest management.

VA Custody Services

Custodians of client virtual assets must obtain a VA Custody License, which authorizes the safekeeping of digital assets via hot, cold, or multi-sig wallets, along with escrow functions, reconciliation, and segregation of client funds. Custodians may enter into sub-custody arrangements, subject to compliance with VARA’s outsourcing and cyber-resilience requirements.

VA Lending and Borrowing Services

Entities offering lending, borrowing, or financing services must hold a Lending & Borrowing License, allowing them to issue collateralized loans, support margin trading, and provide yield-generating programs through peer-to-peer or platform-based models. These businesses must classify clients appropriately and disclose risk-return profiles clearly.

VA Management & Investment Services

A VA Investment Management License is required for businesses that offer discretionary portfolio management, tokenized investment fund creation, or operate collective investment schemes. Investment managers must meet disclosure obligations regarding valuation methods, fund structure, and client eligibility.

VA Advisory Services

Where a business provides financial advice or publishes research relating to virtual assets, a VA Advisory License is needed. This covers both manual and automated advisory services, including token analysis, and strategic structuring advice for token issuers or investors.

VA Issuance Services

A VA Issuance License is required for any entity looking to issue or offer new tokens—be they fungible, stablecoins, NFTs with economic value or Real World Assets (RWAs) such as tokenised real estate to the public or a private investor base in Dubai. Issuers must register whitepapers, disclose tokenomics, establish vesting and treasury policies, and meet transparency standards in line with the Market Conduct Rulebook.

2025 VARA Licensing Requirements

Licensing under the Dubai Virtual Assets Regulatory Authority (VARA) is a phased process that ensures Virtual Asset Service Providers (VASPs) are subject to rigorous regulatory scrutiny before and after incorporation. The process is governed by the Virtual Assets and Related Activities Regulations 2023, the Company Rulebook, and sector-specific Rulebooks, and applies to all firms seeking to engage in VA Activities in or from the Emirate of Dubai. The licensing journey consists of two main stages:

Pre-Approval Stage (Prior to Incorporation)

Before a VASP can incorporate or reserve a trade name in Dubai, it must first obtain initial regulatory clearance from VARA. This stage involves a pre-authorization assessment of the business model, key personnel, and risk profile.

Applicants must submit:

  • A completed Initial Disclosure Questionnaire (IDQ), which provides preliminary information on ownership, governance, intended activities, and control functions;
  • A detailed and credible Business Plan, including:
  • The specific Virtual Asset Activities to be conducted;
  • Target market(s) and client base;
  • Proposed product offerings (e.g., exchange, lending, custody);
  • Organizational chart;
  • Technology architecture;
  • Revenue model and financial projections.

This phase allows VARA to assess the applicant’s regulatory footprint, business viability, and risk exposure prior to issuing a No Objection to Incorporate. VARA may request clarifications, meetings with Responsible Individuals, or early-stage controls documentation to support its evaluation.

No legal entity formation, public announcements, or client engagement may occur at this stage until VARA formally issues its Initial Approval to Incorporate.

Post-Incorporation & Final Licensing

Once VARA issues the Initial Approval, the applicant is authorized to incorporate a local legal entity in Dubai in an approved jurisdiction (e.g., Dubai mainland or a designated free zone such as DWTC). The applicant must establish its full operational presence and begin the formal licensing submission process.

This includes:

Appointment of two Responsible Individuals, who must:

  • Be full-time employees;
  • Reside in the UAE or be UAE nationals;
  • Be individually assessed as “Fit and Proper” under Part III of the Company Rulebook;
  • Submission of a complete Licensing Package, including:
  • All relevant policies and procedures (AML/CFT, compliance, custody, risk management, client onboarding, cybersecurity, outsourcing, and governance);

  • Corporate governance documentation, including Board composition, delegation matrices, and organizational charts;
  • Technology risk and resilience plans, as required under the Technology & Information Rulebook;
  • Outsourcing agreements, if applicable, in compliance with Part IV of the Company Rulebook;
  • Internal audit and compliance program details;
  • Confirmation of systems readiness and business continuity plans.

Applicants must also demonstrate implementation readiness, including secure IT infrastructure, preliminary onboarding controls, and staffing plans. At this stage, VARA may conduct supervisory engagement meetings, test the VASP’s compliance capabilities, and impose conditions on the license depending on complexity or risk exposure.

Once all materials are reviewed and any additional requirements satisfied, VARA will issue the final Operational License, authorizing the VASP to commence regulated VA Activities in or from Dubai.

Ongoing Compliance Obligations

Securing a license from the Dubai Virtual Assets Regulatory Authority (VARA) is only the beginning of a VASP’s regulatory responsibilities. Licensed Virtual Asset Service Providers (VASPs) are subject to a wide range of ongoing compliance obligations, governed by the Company Rulebook, Compliance and Risk Management Rulebook, Market Conduct Rulebook, Technology and Information Rulebook, and the specific rulebook applicable to their VA Activity. These obligations are designed to uphold financial integrity, operational resilience, consumer protection, and market confidence within the Emirate’s virtual asset ecosystem.

VASPs must maintain a clear and transparent legal and governance structure at all times. This includes preserving an accurate ownership register, disclosing material changes to shareholders or control entities, and seeking VARA’s prior written approval for any restructuring involving Controlling Entities or Ultimate Beneficial Owners (UBOs). The Board must continue to evaluate its members and Senior Management on an annual basis and ensure their continued status as “Fit and Proper” Persons under Part III of the Company Rulebook. All Board changes, especially involving Responsible Individuals, require notification to and approval by VARA.

Regulated firms are required to operate a fully functional compliance framework that is appropriately staffed, documented, and subject to internal audit. This includes maintaining and implementing policies related to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), risk management, client onboarding, transaction monitoring, sanctions screening, recordkeeping, and suspicious activity reporting. The Compliance and Risk Management Rulebook obliges VASPs to implement a risk-based approach to all activities and conduct periodic Business Risk Assessments in line with FATF principles.

Licensed VASPs must also comply with strict technology and cybersecurity standards, including secure IT infrastructure, incident response plans, data protection measures, and business continuity frameworks. The Technology and Information Rulebook mandates the safeguarding of client data, protection of private keys, and ongoing penetration testing to validate system resilience. Any material cyber incidents, service interruptions, or data breaches must be promptly reported to VARA, and failure to do so may trigger supervisory action.

Client asset protection remains a fundamental obligation. Where custody services are provided, VASPs must segregate client assets from proprietary holdings, reconcile holdings regularly, and ensure that all third-party custodians meet VARA’s due diligence requirements. The Custody Rulebook and Company Rulebook further require VASPs to implement disclosure protocols regarding rehypothecation (if permitted), and to maintain transparent client reporting mechanisms.

Marketing and promotional activities must remain compliant with the Marketing Regulations 2024, which require that all advertising and promotional content be fair, clear, not misleading, and approved (where necessary) by VARA. VASPs are required to retain records of all marketing materials and their distribution for a minimum of eight years. Unauthorized use of influencers, social media channels, or promotional incentives without prior clearance may result in significant penalties.

Finally, VASPs must cooperate fully with VARA in its ongoing supervisory activities. This includes responding to information requests, participating in inspections, maintaining audit trails, and submitting periodic reports on business activity, client volume, financial condition, and risk exposures. Where material breaches or compliance failures are identified, VARA may impose remedial directives, civil penalties, or, in serious cases, suspend or revoke the license.

Penalties for Non-Compliance

Failure to comply with VARA’s licensing terms, operational requirements, or ongoing regulatory obligations can result in significant legal and financial consequences. The Virtual Assets and Related Activities Regulations 2023, as read with the applicable Rulebooks and the Marketing Regulations 2024, provide VARA with broad supervisory and enforcement powers to investigate, sanction, and remediate non-compliance by licensed or unlicensed entities operating in or targeting the Emirate of Dubai.

Under Part IX of the Regulations, VARA may initiate formal investigations or inspections into any VASP suspected of breaching applicable laws, rules, or directives. VASPs are legally obligated to cooperate fully with such investigations, including by providing timely access to documentation, systems, staff, and third-party service providers involved in regulated activities.

Where violations are identified, VARA is empowered to impose a range of enforcement measures, including private or public reprimands, the issuance of binding remedial directives, and the suspension or revocation of a license. In severe cases—such as those involving client asset misappropriation, systemic governance failure, breaches of AML/CFT duties, or non-disclosure of material events—VARA may refer the matter to law enforcement or other UAE regulatory bodies for criminal or civil prosecution.
Of particular note are the Marketing Regulations 2024, which stipulate civil financial penalties of up to AED 10,000,000 for unauthorized or misleading promotions of virtual assets or VA Activities in or targeting Dubai. The regulations strictly prohibit marketing by unlicensed entities, the use of anonymity-enhanced cryptocurrencies, and the promotion of speculative investment schemes without adequate disclaimers and prior VARA approval.

In addition to fines, VARA may impose conditions on a VASP’s license, restrict specific services or product offerings, or require changes in personnel or governance structure. A breach of material outsourcing controls, conflicts of interest rules, or data protection standards can result in the mandatory unwind of business lines or termination of service arrangements. Under the Company Rulebook, VARA also retains the right to declare individuals unfit to hold key roles and ban them from working in regulated VA businesses within the Emirate.

Importantly, VASPs are expected to maintain a culture of proactive compliance. Failure to self-report breaches, implement internal remediation plans, or update policies and procedures as required may be treated as an aggravating factor in enforcement assessments. In contrast, timely self-disclosure, cooperation during investigations, and demonstrable risk controls may serve to mitigate penalties imposed.

In all cases, VARA adopts a risk-based and proportional enforcement approach, balancing deterrence with corrective outcomes to protect the integrity of Dubai’s virtual asset ecosystem.

How Neo Legal Can Help

At Neo Legal, we understand that securing and maintaining a VARA license is not simply an administrative task—it is a strategic and legally complex undertaking that requires deep knowledge of Dubai’s regulatory framework, evolving risk landscape, and international best practices. As a UAE-based legal advisory firm specializing in virtual asset regulation, we provide end-to-end legal and regulatory support for businesses navigating the full lifecycle of VARA authorization and compliance.

We begin by advising clients during the Pre-Approval Phase, assisting with the preparation and submission of the Initial Disclosure Questionnaire (IDQ), structuring the business model to align with VARA’s expectations, and drafting comprehensive business plans that address governance, technology, compliance, and financial viability. Where applicable, we liaise directly with VARA on behalf of our clients and help facilitate pre-licensing consultations and risk-based clarifications.

Once Initial Approval is secured, Neo Legal assists with the incorporation of the Dubai legal entity, ensuring alignment with the licensing structure approved by VARA. We then support the full policy and procedural submission phase, including:

Drafting or reviewing Compliance Manuals, AML/CFT frameworks, Risk Management Policies, Client Onboarding and KYC protocols, and Outsourcing Agreements;
Advising on Board composition, Senior Management appointments, and Fit and Proper assessments;
Ensuring full compliance with the Marketing Regulations 2024, including pre-clearance of promotional content, disclaimers, and influencer use;

Preparing the required internal controls, technology risk programs, and data protection frameworks in line with the Technology and Information Rulebook.

For firms post-licensing, we provide ongoing legal advisory services, including:
Drafting or revising contractual agreements, Terms of Service, or platform disclaimers to reflect regulatory obligations;
Acting as retained legal counsel for Regulatory Reporting, VARA inspections, and Material Event Disclosures;
Conducting mock audits, gap analyses, and Board training on risk culture, fiduciary duties, and enforcement trends;

Advising on token issuance, DAO structuring, and cross-border operations that intersect with Dubai’s regulatory perimeter.

Our clients include virtual asset exchanges, custodians, DeFi platforms, token issuers, and infrastructure providers operating across the MENA region and beyond. Whether you are launching your first product or expanding operations into the UAE, Neo Legal ensures that your structure, strategy, and compliance approach are fit for regulatory purpose from day one.

Contact us today to schedule a confidential consultation or to request a tailored licensing readiness assessment.

Frequently Asked Questions

A VARA license is an official authorization issued by the Dubai Virtual Assets Regulatory Authority allowing entities to carry out regulated Virtual Asset (VA) Activities within or targeting Dubai. This includes activities such as exchange operations, custody, brokerage, issuance, and investment services, governed by the Virtual Assets and Related Activities Regulations 2023.

Any business that conducts Virtual Asset Activities in or from Dubai—or markets such services to UAE residents—must obtain a VARA license. This includes exchanges, token issuers, custodians, lenders, and advisors. Even foreign firms must comply if they target Dubai users.

No. As of 1 October 2024, only VARA-licensed entities may market VA Activities in or targeting Dubai. Unauthorized marketing can result in fines up to AED 10 million, even if the entity is based outside the UAE.

Pre-Approval Phase – Submit an Initial Disclosure Questionnaire (IDQ) and business plan.
Post-Incorporation Phase – Once approved to incorporate, submit governance documents, risk frameworks, and all required policies and procedures for final license issuance.

Timelines vary based on the complexity of the application, but typically it is expected a minimum of 9 months, including the pre-approval phase, incorporation, and final compliance reviews. VARA may request additional documentation or clarification at any stage.

Yes. VARA assesses activities based on their economic function and will determine what license will need to be applied for.

Operating a VA Activity without a license or marketing without approval can result in civil penalties up to AED 10 million, public enforcement notices, and license bans. VARA also reserves the right to refer serious violations for criminal investigation.

Yes, but it must establish a legal entity in Dubai and comply with local licensing and governance requirements. Foreign entities targeting UAE users without a Dubai-based license risk enforcement under the Marketing Regulations 2024 and other VARA rules.

Application Fee (Non-Refundable)
AED 100,000 for the first activity category
AED 50,000 for each additional VA Activity category

Annual Supervision Fee
Payable annually after license issuance. Varies by activity and risk classification.

Activity Type Supervision Fee (AED/year)
Exchange AED 300,000 +
Broker-Dealer AED 200,000 +
Custody AED 200,000 +
Lending & Borrowing AED 200,000 +
Advisory AED 100,000 +
Investment Management AED 200,000 +
Issuance AED 150,000 +

If you would like a quote for Neo legal’s professional costs for handling your VARA license process please contact us.

Minimum 9 months.