Skip Navigation
Navigating Dubai’s VARA Framework for Crypto Businesses
Operating a crypto business in the emirate of Dubai means understanding and complying with VARA, the Virtual Assets Regulatory Authority. Established in 2022, VARA oversees virtual asset service providers and regulates virtual assets and related activities under a clear regulatory framework. Its rulebook outlines how VASPs and token issuers must operate within the Dubai International Financial Centre and across cross-border transactions, with a strong focus on consumer protection. A2CO helps businesses navigate this framework with clarity, ensuring your virtual asset service is compliant, licensed, and ready to scale.
The VARA Licensing Process Explained
VARA Licencing Process
VARA has designed a multi-step licensing pathway to ensure responsible market entry and ongoing supervision.
The initial step is for you to submit an Initial Disclosure Questionnaire (IDQ) through the selected commercial licensing authority. This step provides VARA with key information on the proposed business model, founders and activities. Subsequent to the successful review of the IDQ, VARA will issue an Approval to Incorporate (ATI). This permits the applicant to proceed with setting up the legal entity in Dubai.
Full VASP License Application
Once incorporated, the company must complete VARA’s full licensing requirements. The applicant will need to prepare a detailed business plan, governance and compliance policies, AML/CFT procedures and tech governance frameworks and fit and proper documentation for senior management. The applicant needs to have their senior management team compromising suitably qualified individuals and appoint two Responsible Individuals (RI). Each RI shall be a full-time employee of the applicant, a fit and proper person and a resident of the UAE or holder of a UAE passport.
After evaluating the documents submitted, VARA will proceed to then grant a Virtual Asset Service Provider (VASP) license to operate should all documents satisfy the necessary requirements.
Types of VARA Licenses
VARA regulates a range of virtual asset activities, and companies must apply for the license category that aligns with their services. These include:
-
Advisory Services - Guidance or recommendations on virtual assets and related activities.
-
Broker-Dealer Services - Facilitating trades or transactions on behalf of clients.
-
Custody Services - Safekeeping of virtual assets and private keys on behalf of customers.
-
Exchange Services - Operating a platform for buying, selling, or exchanging virtual assets.
-
Lending and Borrowing Services - Offering lending, staking, or borrowing models using virtual assets.
-
VA Management and Investment Services - Managing virtual asset portfolios or investment funds.
-
Transfer and Settlement Services - Moving virtual assets between wallets, exchanges, or platforms.
VARA Licencing Process
VARA has designed a multi-step licensing pathway to ensure responsible market entry and ongoing supervision.
The initial step is for you to submit an Initial Disclosure Questionnaire (IDQ) through the selected commercial licensing authority. This step provides VARA with key information on the proposed business model, founders and activities. Subsequent to the successful review of the IDQ, VARA will issue an Approval to Incorporate (ATI). This permits the applicant to proceed with setting up the legal entity in Dubai.
Full VASP License Application
Once incorporated, the company must complete VARA’s full licensing requirements. The applicant will need to prepare a detailed business plan, governance and compliance policies, AML/CFT procedures and tech governance frameworks and fit and proper documentation for senior management. The applicant needs to have their senior management team compromising suitably qualified individuals and appoint two Responsible Individuals (RI). Each RI shall be a full-time employee of the applicant, a fit and proper person and a resident of the UAE or holder of a UAE passport.
After evaluating the documents submitted, VARA will proceed to then grant a Virtual Asset Service Provider (VASP) license to operate should all documents satisfy the necessary requirements.
Types of VARA Licenses
VARA regulates a range of virtual asset activities, and companies must apply for the license category that aligns with their services. These include:
-
Advisory Services - Guidance or recommendations on virtual assets and related activities.
-
Broker-Dealer Services - Facilitating trades or transactions on behalf of clients.
-
Custody Services - Safekeeping of virtual assets and private keys on behalf of customers.
-
Exchange Services - Operating a platform for buying, selling, or exchanging virtual assets.
-
Lending and Borrowing Services - Offering lending, staking, or borrowing models using virtual assets.
-
VA Management and Investment Services - Managing virtual asset portfolios or investment funds.
-
Transfer and Settlement Services - Moving virtual assets between wallets, exchanges, or platforms.
Token Issuers
VARA regulates two categories of token issuance. The first category regulates Fiat-Referenced Virtual Assets (FRAVs), Asset-Referenced Virtual Assets (ARVAs) and other tokens as may be determined by VARA from time to time which may fall under this category. The issuers of these tokens require a license under VARA before issuance.
The second category of token issuance is that of any virtual assets which do not constitute a category one token issuance or exempt token issuance as detailed below. Category two token issuance does not require a VARA license but all placement or distribution made must be carried out through or by a licensed distributor.
Non-Transferable Virtual Assets and Redeemedable Closed-Loop Virtual Assets are categorised as exempt Virtual Assets. There are no prior requirements relating to these categories. VARA is given the discretion to include any virtual asset it may deem fit to fall under this category.
Prior to issuing a token, all entities issuing a token must prepare a white paper issued in a format and standard as required by VARA. Moreover, VARA specifies the details and information that needs to be included in the white paper.
VA Marketing Regulations
VARA sets out strict requirements for marketing virtual assets in or targeting UAE to ensure transparency, fairness, and investor protection. All promotional content must be clear, accurate, and not misleading, with prominent risk disclosures highlighting volatility, potential loss of capital, and lack of financial safeguards. Aggressive or deceptive tactics such as implying guaranteed returns, creating urgency, or trivialising investment decisions are prohibited, and marketing must always be tailored to the appropriate investor audience.
Entities remain fully accountable for their marketing activities, including those conducted through third-party agencies, and are required to maintain records of all materials for at least eight years, underscoring VARA’s focus on responsible promotion and consumer trust.
Our Services
-
Advisory on VARA licence applications for VASPs and token issuers
-
Support with regulatory compliance under the relevant framework in Dubai
-
Review and structuring of internal policies in line with the necessary requirements
Why Choose A2CO
-
Tailored support for VASPs across all licence categories
-
Clear, actionable advice grounded in Dubai’s regulatory framework
-
Trusted by international crypto firms and startups alike
-
End-to-end assistance from application through post-licence compliance
Frequently Asked Questions
VARA is Dubai’s Virtual Assets Regulatory Authority, created to oversee and license virtual asset activities. It aims to foster innovation while ensuring market integrity and investor protection.
It involves submitting an Initial Disclosure Questionnaire, obtaining Approval to Incorporate, and completing a full VASP license application.
Any business conducting virtual asset services from or within Dubai, including exchanges, custodians, and broker-dealers, must obtain a VARA license.
Yes, all token issuances, public or private require regulatory approval under VARA’s licensing framework.
Yes, but only with VARA’s prior approval. All marketing and promotions must comply with the relevant regulations and laws.
